It is well known that competition from North African ports is remarkably increasing.
The factors that most determine the lower competitiveness of Italian ports include: a) lack of homogeneity in labour costs, b) lack of homogeneity in taxation of carriers, c) the burden of excise duties on energy and fuels.
In this context, the Special Economic Zones (SEZs) could become an instrument of great importance for Italian ports and transports because, in someone’s opinion, only the creation of such zones could allow us to face the competition from the Egyptian and Moroccan terminals.
In fact, one could compete on equal terms in the port and back port areas if it were possible to work on the same labour cost and fiscal conditions as those of our direct North African competitors.
Actually the SEZ is an area within a State where special laws are in force whose purpose is to attract new investors by offering them significant advantages in the field of customs duties, direct and/or indirect taxes, funding, social security contributions, etc..
Therefore SEZs represent a potential countermeasure to stimulate the (stagnant) economy of some countries (such as Italy) allowing them to attract new foreign capitals.
Greece has recently shown a particular interest in the setting up of SEZs to develop some depressed areas, with strong potentials, related to the presence of major ports such as Piraeus.
The serious thought being given to the idea of setting up special economic zones with a view to tackling the crisis in Greece is reflected in a number of authoritative proposals that have been made on the matter. These include the Six-Point Growth Plan put forward by the German Government (see Der Spiegel article of 25 May 2012) and the proposal made in September 2012 by the President of the European Parliament, Martin Schulz (which was followed by an identical proposal from the President of the Federation of German Industries (BDI), Hans Peter Keitel), not to confine the special economic zones scheme to specific sectors of the Greek economy but to make the whole of the country ‘a sort of special economic zone within the eurozone’ which would be administered by foreign EU personnel.
It seems that also few Regions in Italy started a similar process.
The initiative taken by the Region of Calabria is significant in this regard, which on May 31 2013 has decided to submit to the Italian Parliament a proposal for a law envisaging the setting up of a SEZ in the industrial-logistics district of the port of Gioia Tauro.
The law proposed by the Council of the Calabria Region provides for a project of aids from which both new enterprises (with more advantages) and companies that are already active in the Port of Gioia Tauro may benefit in different ways.
In particular, the proposal of law grants the new enterprises significant benefits in terms of exemption from the payment of income tax (IRES), regional tax on productive activities (IRAP), customs duties and VAT on import, export, consumption and movement for all products coming in, processed and then exported through the SEZ, as well as in terms of significant reductions of labour costs.
Thus, the proposal of the Calabria Region represents itself a "pilot" project of an internationally competitive tax regime that could give an impulse to real economy, creating the possibility of working within a special regime aimed at attracting investments and increasing exports.
However, all this must obviously comply with the EU rules, including those relating to state aids.
In this context, it is noteworthy to mention the answer given last December 2012 by the EU Commission to the question of the European parliamentarian Ioannis A. Tsoukalas, in which it stated that:
- reforms were being made with a view to improving the business environment and enhancing competiveness;
- Special Economic Zones can be established on the territory of MS and undertakings located therein can receive support, e.g. for new investment, as long as granted according to EU rules, including state aid rules.
- in any case, the implementation of SEZs requires significant administrative capabilities within host governments to ensure adequate regulation and facilitation.At the same time, the risks of tax evasion and transfer pricing that would jeopardise budgetary revenue targets must be minimised.
The most significant statement of the Commission is that «the Commission services are currently undertaking a review of the experience with SEZs».
Therefore, we will have to see whether the initiative of the Calabria Region is followed also by other Italian ports, and specifically whether it is supported by the Italian State and, last but not least, whether it obtains the placet of the Commission.
While waiting for the outcome of the “review” undertaken by the Commission on SEZs, there is no doubt that the setting up of free zones involving the granting of tax incentives or other advantages constituting state aid may only be authorised by the Commission if it contributes to objectives of common interest without unduly distorting competition and trade.
Yet, it is opportune to point out that the Commission has cleared such measures in the past where the design of the schemes was appropriate and their expected positive effects outweighed the likely distortions of competition19.