No EU austerity for Greek super-rich

27.06.12 @ 09:44

  1. By Andrew Rettman
  2. Andrew email

BRUSSELS - Greece's left-wing Syriza party will not get any help from EU institutions in its bid to make ship owners pay more tax.

  • Xiradakis: 'When we agree to have one central bank in the world and one single currency, then we can tax shipping' (Photo: John D. Carnessiotis, Athens, Greece)

George Stathakis, a recently elected Syriza MP and an economics professor at the University of Crete, told EUobserver the opposition party will try to curtail tax breaks for Greek-based ship management firms and intermediary companies and to increase tonnage tax on individual vessels.

He said the measures would bring in €700 million to €1 billion extra a year and help clean up the sector.

"Much of the tax evasion in Greece works through these intermediaries ... We need a new framework which will improve the tax receipts of the state," he said.

The 50-or-so Greek families in the shipping business own one in five of all the large cargo vessels in the European fleet.

Their wealth is hard to count because they have diversified into other sectors and many live in tax havens such as Switzerland or the UK. But in 2010 alone they repatriated €15 billion of untaxed income to Greece.

For the European Commission, which in March put forward a new plan "to make sure the tax system is fairer for all Greeks," the status quo on shipping is fine.

The March blueprint, drawn up under the EU's bailout-related budgetary oversight powers, does not mention ship owners on any of its 195 pages.

Commission spokesman Amadeu Tardio said ship owners have not come up in any talks on Greece by EU finance ministers or by the troika, the international lenders behind the bailout.

George Xiradakis, a former banker whose consulting company, XRTC, advises Greek shipping firms, said the reason why is simple.

"If someone wants to impose taxes on ship owners it is very easy for them to move out [of Greece]. If and when we agree to have one central bank in the world and one single currency, then we can tax shipping," he told this website.

He noted the shipping families employ 230,000 people in the country.

He said they give back to Greek society by voluntary donations - one family gave €500 million for a new library. Another one rebuilt an earthquake-struck village.

"They also contribute to the European economy, whether by buying yachts or planes or by paying for the services of British and Swiss banks," he added.

Syriza's Stathakis said the EU is pushing for more taxes on ordinary Greeks instead because "they never believed" the Greek establishment would take on the shipping clans.

For Michel Koutouzis, a Greek-origin expert on money laundering who carries out investigations for EU institutions, the situation is unjust.

"The ship owners have more money in their Swiss bank accounts, which they control through front companies, than the Greek bailout several times over. It's fraud. It's organised crime," he told this website.

"You can't say: 'Well, we can't tax rich people or they'll leave.' This is immoral. If they don't want to pay taxes, we should create new laws to make them pay anyway."

He noted the ship magnates have ties to top politicians at EU-level as well as in Greece.

The richest of them all, the Geneva-based Spiros Latsis, caused a fuss in 2005 when commission chief Jose Manuel Barroso holidayed on his yacht at the same time as overseeing an EU decision on ship cartels.

The commission at the time said the two men are just "friends," but Barroso stepped down from the competition panel to avoid conflict of interest.

"How stupid do they think we are? The reason that people have friends is so that they can help them when a problem comes up," Koutouzis said.

When EUobserver asked Barroso's spokesman, Mark Gray, when the two men last met, he said: "Frankly, no idea. I am struggling to see what relevance a seven-year-old story has to do with Greek ship owners today."