Europe is progressing along the course of integration. Since Europe’s post-war leaders decided to establish the initial institutions of the European Union in the 1950s, aimed at creating a lasting peace throughout the continent, considerable progress has been made towards bringing Europeans together.
Sailing under a European flag seems therefore the natural choice for European ship owners in the early 21st century to show loyalty and commitment to the European Union and to allow its policy-makers to represent Europe’s interests in the international maritime bodies.
Furthermore, the EU has given incentives for European ship owners to use the flags of EU member states. For a number of years now, most EU member states are aware of the tonnage tax scheme, which substantially reduces the tax burden of ship owners to strengthen their competitiveness in the world. According to the Community Guidelines on State Aid to maritime transport of 2004, ship owners are entitled to benefit from that scheme if they have at least 60% of their tonnage under EU flags.
Finally, the EU is an economic powerhouse. Its 28 member states generate 25% of the GDP in the world and most countries are looking into close trade relationships with the EU. Sailing under EU flags demonstrates strength and represents a strong reputation. In some essential cases, countries like China or Brazil grant special privileges to ships under EU flags or specifically under Portugues flag. For instance, as expressed in the “Agreement on maritime transport between the European Union and the People’s Republic of China” port fees are reduced.