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Wealthy Shipowners To Bail Out Greek Economy

The owners of Greece's wealthy shipping industry, under fire over low tax bills amid recession and austerity, have agreed to help bailout the sinking economy.

The Hellenic Shipowners Association signed the agreement with Prime Minister Antonis Samaras, which the government says will bring in about 140m euros (£120m) a year to state coffers.

According to a government statement, 441 shipping companies with 2,769 ships will make voluntary payments over a three-year period.

Mr Samaras said: "The agreement for your voluntary participation in the state budget with 90% of the fleet sailing under a Greek flag, and 65% of the fleet sailing under a foreign flag, is truly moving."

The government estimates that the contribution is worth about 75m euros (£64m) for the rest of 2013 and up to 140m euros in a full year.

The Merchant Marine Ministry said in a statement: "The signing of the agreement confirms the willingness of the shipping community to voluntarily contribute, for three years, to the national efforts in stabilising the country's economy."

Greek shipowners are leaders in their sector internationally and control about 15% of the world's merchant fleet, but only about a third of their fleet sails under the Greek flag.

Greece is going through a sixth year of continuous recession amid brutal austerity cuts and pressure for more jobs to be slashed in the public sector.

This has sharpened resentment against the shipowners because ships registered under foreign flags generate profits in low-tax regimes, and in Greece the shipping sector benefits from special tax advantages.

Earlier this year, the shipowners were forced to accept a tax imposed on vessels sailing under foreign flags.

Greece's merchant marine sector accounts for more than 48% of the country's balance of payments, topping the list between 2009 and 2011, and followed by tourism.

The announcement of the voluntary payments comes after the Greek parliament approved on Wednesday a package of further reforms putting thousands of jobs in the public sector at risk.

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