Greek shipping and related activities are a highly extroverted sector. In particular, Greek shipping has traditionally been a dominant force in the Greek economy, effectively addressing challenges both internationally and nationally, Bank of Greece (BoG) governor Yannis Stournaras, told a recent Piraeus Marine Club working luncheon.

He said one of the challenges the industry has recently faced are the restrictions on capital movements imposed mid-2015 which have resulted in a significant reduction of incoming remittances from the second half of 2015, based on data of the domestic banking system. However, Stournaras said “there was no evidence of a corresponding decline in the sector's real economic activity and consequently its contribution to the Greek economy”.

In order to address and remedy this inconsistency, the BoG has developed a model for assessing Greek shipping activity. As of September 2018, the balance of payments accounts for maritime transport have been used retrospectively since January 2015, both from international databases and from administrative sources related to shipping. Purpose of this model is to provide a coherent statistical framework for estimating balance of payments data related to maritime activity.

Based on data from the BoG model, in the second quarter of 2019 Greece operated more than 3,000 vessels with a total capacity of 202.6m dwt. The average age of these ships is almost 10 years. About 20% of these ships fly the Greek flag and an additional 25% other EU flags. Between 2015 and the second quarter of 2019, available data reveals there is a continuous increase in both the number and capacity of vessels operated from Greece.

“Shipping receipts were and are necessary to cover a large part of the country's external financing needs,” said Stournaras. According to the BoG, revenues from shipping in 2015-2018 exceeded - on average - over Euro 12bn annually, about 6.8% of GDP, representing 37% of total balance of service receipts. During the same period, net receipts (minus payments) were - on average - around Euro 6bn a year and covered about 32% of the goods balance deficit.

“The upward trend in maritime transport receipts in 2017 and 2018 continued into 2019 and available data for the first seven months of 2019 shows maritime transport receipts increased 7%,” said the BoG governor. He said that during the crisis, it was important to support the shipping community in the Greek economy through voluntary contributions. The relevant synergy between the Greek state and the maritime community, after two annual extensions, lasted five years (2014-2018). At the end of its term, a new covenant was concluded in February 2019, which provides for an indefinite voluntary payment by the shipping community of 10% of dividends imported into Greece. The amount paid will be a minimum of Euro 40m per year. Greek-owned shipping and the wider maritime cluster can play a decisive role in the recovery of the Greek economy, contributing to GDP growth both directly and indirectly.

Stournaras also referred to the role shipping people can play in filling the investment gap through their investments in the Greek economy in sectors related to shipping, such as shipyards, or beyond. This investment activity can be further enhanced, in particular after the recent lifting of restrictions on capital movements, and given the low return on investment in the global economy in general.

“The attraction of commercially managing more ships in Greece, as well as the expansion of maritime cluster services, including shipyards, could increase the contribution of shipping to the GDP and enhance the extroversion of the Greek economy. It is a unique achievement for a country the size of Greece to be a world leader in shipping,” said Stournaras.

– Filed: 2019-10-25