Money & Business

Greek Boating Industry Warns of Potential Austerity Effects

By / Jul 29, 2015 (Stockbyte/Thinkstock)

A group representing boatmakers in Greece says that a plan to tackle the country’s financial problems by imposing a luxury tax could be a fatal blow for a traditional industry.

Greece’s financial standing remains shaky—and that’s causing choppy waters for the country’s boatmaking industry.

Being on the Mediterranean Sea, the country’s boating industry is just as significant as its coastline. But according to the Greek Boat Builders’ Association, the country’s latest attempts at austerity could be the death knell for the strongly traditional industry. Owners of recreational boats already pay a luxury tax. Now, Greece is considering extending that tax to include boats larger than 16.4 feet. Increasing the luxury tax from 10 percent to 13 percent is another option being considered.

The trade group warns that the proposed actions could have a dire effect. George Kranitis, who leads the trade group, has dealt with the industry’s challenges personally. His shipyard, which once employed 35 people and sold hundreds of boats each year, shrank significantly because of the recession.

In response to the plans on the table, Kranitis told The Associated Press: “We’re being destroyed. I can’t understand what these people in government are thinking.”

Some, such as George Vernicos, head of the Greek Tourism Federation—who owns a yachting business—say that the effect of an added tax wouldn’t raise revenue but would simply discourage people from buying boats in Greece.

“I don’t believe they will have any income from this because even if someone would like to buy something, he would prefer to go to Italy or to another country to buy it,” Vernicos told the AP.

Tourism Could Feel Pressure, Too

The added pressure from the financial-austerity push—which is causing revolts in Prime Minister Alexis Tsipras’ political party—could eventually hurt tourism as well.

The Greek tourism industry, which raised $15.1 billion in revenue for the country last year, according to Voice of America, is going strong right now, but a further trimming of the budget could have a negative long-term effect, say industry groups.

“Our heavy industry in this country is tourism,” Constantine Michalos, head of the Athens Chamber of Commerce, explained to VOA. “So, what we need to do on both sides is to understand which are the structural reforms which are positive for the economy, sustainable by the Greek people, so that our partners can hope that at the end of the day, the dues from Greece will be paid in full.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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