Annual English Edition

N A F T I K A C H R O N I K A

Everything you wanted toknow about Greek Shipping(and didnt know who to ask)

Commissioner

MariaDamanaki

Our country needs

a real change

Our focus should not be

on what our partners say or do

We need a new, fair and sustainable

model

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Annual EnglishEdition

NAFTIKA CHRONIKA

Everythingyou wanted toknowaboutGreek Shipping(and didnt know who to ask)

Commissioner

MariaDamanaki

Our country needs

a real change

Our focus should not be

on what our partners say or do

We need a new, fairand sustainable

model

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3

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0

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Visit us atStandNo500 D

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08 Editorial

12 2010 the year of the seafarerBy By Efthimios E. Mitropoulos, Secretary-General,International Maritime Organization

16 The Integrated Maritime Policy is one of thekey challenges and priorities of my mandateAn exclusive interview with Commissioner forMaritime Affairs and Fisheries Maria Damanaki

22 Seas and oceans are part of our cultureBy Rodi Kratsa, Vice-president of the EuropeanParliament

26 European Maritime Policy: Motion for aEuropean Parliament resolution on strategicgoals and recommendations for the EU'smaritime transport policy until 2018

34 A new international agenda for shippingpolicy and regulation By Albert Bressand

38 Asian waves over international shippingBy John C. Pachoulis

40 2010-Latest developments in Greek shippingBy George Xiradakis

44 Revisiting the Greek crisis: Did the eurozonetrade without coherence?

48 The recent Greek experience of financialwarfareBy Alkis Corres

52 Is marketing a compass or a pain for shipping?

56 Special report: The shape of things to come

64 Supporting the maritime industry By John Tzoannos

68 IOPCF Oil Spill Cost Data: Empirical Analysisand Debate at the IMO By Christos A. Kontovas, Harilaos N. Psaraftis andNikolaos P. Ventikos

76 Developments at IMOBy Panos Zachariadis

80 Green ShippingBy Emmanouel Papalexis

84 European port policy at crossroadsBy Thanos Pallis

86 People see their holidays as a necessitynowadaysAn interview with Charis Papacharalampous

92 Classifications societies: Entering (and surviving) challenging times

108 Sale and purchase market review for the first quarter of 2010By Takis Efstratiou

114 LPG market overview for Q1 2010By Christos Triantafyllidis

120 Gearing up for the Cyprus PresidencyBy Vassilis Demetriadis

124 Cyprus shipping-National DevelopmentsBy Thomas Kazakos

126 An economist's eye for the shipping guyBy Stavros Tsolakis

130 Evaluation of competence of marine engineers on maintenance sectorBy D. E. Gourgoulis, C.A. Schinas, G. P. Gotzamanis, C.G. Yakinthos

134 Market news

Publications

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Greeks are number one on the sea and that is not only inPiraeus or in the coastal areas of Attica. Shipping does notonly affect those employed in this economic sector either. It concerns

the whole of Greek and European society, who sadly ignore the basic ele-ment that boosts not only our national economy on a local level, but alsoEuropean and international commerce. Shipping is ignored, overlooked and

in many ways looked down on as if it were a minor or even marginal sectorof the European economy and society.

There have been many recent campaigns aimed atattracting young people to the merchant

marine and at informing the public aboutall the possibilities offered by a career inshipping. Despite these efforts, the celebrationsfor both the European Maritime Day by the EU lastMay and by IMO last September have not been

able to match the expectations of the inspired

EDITORIAL

Facing our pastmay be the key for our future

people who instituted them. Despite the com-mendable enthusiasm to inform the public, theyounger generation seems to ignore the impor-tance of the sea or of maritime trade; and all thisin a continent that has always depended on ship-ping for its economic survival.

During a recent conference on BusinessHistory in Athens, lecturers from all thecorners of Europe stressed the impor-tance of studying and teaching Business Historyin this modern competitive environment. All theparticipants were of the opinion that EconomicHistory does not only concern historians but alsoeconomists and other academics who wish tocomprehend the primary sources of History andcombine experience with knowledge.

Younger people should not only be aware of their roots and

past. They should also realise the importance of those

financial sectors that can be counted on to hold the fort in

these hard times. Shipping is one of the few sectors that

quietly go about their business, continuing to bring pros-

perity to Europe.

..10

EDITORIAL

Unfortunately, however, many stu-dents are completely disinterested inHistory. It might be the teaching methodolo-gy, or the fact that many of the History books arenot relevant to the demands and interests of theyounger generation. Many young people thinkthat history is only names and dates and that itdoes not offer them any practical knowledge orskills. They do not understand that History willoffer them valuable insight into modern institu-tions and societies, and that it will teach themabout trends and experiences of the distant past.Perhaps the educational system is at fault here;or perhaps teachers need to follow a more mod-ern methodology.

History refers to the understanding ofwhat a nation is and of how to solvethe problems of the present based onthe knowledge of past, so as to facethe challenges of tomorrow. In particular,Economic History is a course that should betaught throughout Greece and Europe. In ourmodern society, knowledge of how the econo-my works is necessary to all economic sectors.

Greek Economic History is not merely an inter-esting school subject; it is also essential knowl-edge that will help the young to see where wehave excelled as a nation and where we havebeen hindered. Within this school subject, Greekshipping should enjoy a prominent position.

The importance of introducing Economicand Business History in all our Universitiescannot be stressed enough. Nevertheless,throughout Europe, those two University coursesare optional and rarely compulsory. In GreekMerchant Marine Academies, Greek MaritimeHistory is not taught at all! Our future seafarerstotally ignore our roots and traditions.

Many will ask themselves why youngpeople should need to know about theshipping tradition of the islands of Kassos,Andros, Cephallonia or Oinousses. Why should

they know who are the most important busi-nessmen in the shipping sector? Why shouldthey learn about past recessions? It is quite evi-dent that knowledge of the past can act as ourstrength for the future and may be our shield forthe present.

This year European Maritime Day willbe celebrated throughout Europe.Let us hope that the leaders of Europe encour-

aged by their business and academic communi-ties will allow research of these two aspects ofhistory, rather than contribute to their declineand disappearance. Younger people should notonly be aware of their roots and past. Theyshould also realise the importance of thosefinancial sectors that can be counted on to holdthe fort in these hard times. Shipping is one ofthe few sectors that quietly go about their busi-ness, continuing to bring prosperity to Europe. Itis disappointing that most European countriesignore this.

In Greece, some people have complete-ly forgotten legendary personalitiesand the glory of seafaring. With modernteaching methods, well-written books andinspired educationalists, the economic, businessand shipping history of Greece will attract youngpeople to the forgotten sectors of the Greek pros-perity. If we do not comprehend the legendaryand ispirational sea voyage of the Greeks, howwill be able to maintain it in the future?

Ilias Bissias

..14

coordinating measures to resolve the unprece-dented and complex situation that, for more thanfive years, has rendered voyages off the coast ofSomalia a very dangerous venture indeed. I hopethat the implementation of the IMO and industryguidelines, together with the support of the UNSecurity Council and other political and militaryentities, will assist in tackling this modern-dayscourge effectively.

While we appreciate the naval opera-tions undertaken to protect ships, theshipping industry itself must also raise its owndefences by effectively making use of the recom-mended shipping routes (in particular, theInternationally Recommended Transit Corridor forships transiting the Gulf of Aden); and also bymaking use of the reporting mechanisms andtaking all necessary preventive, evasive anddefensive measures. Our concern should, above

all, be for the safety of life at sea and the well-being of the seafarers, fishermen and passengersinvolved and their families. We should, therefore,not rest unless and until all the necessary steps tosuppress and eradicate piracy have been taken.

In this respect, IMO is implementing a count-er-piracy project and has established a specialunit to support the organization's efforts to givefull and effective implementation of the 2009Djibouti Code of Conduct concerning the repres-sion of piracy and armed robbery against ships inthe western Indian Ocean and the Gulf of Aden.

We are also participating fully in otherinternational efforts to combat piracy,such as, for example, the Contact Group on Piracyoff the Coast of Somalia, which was created inJanuary 2009 pursuant to UN Security CouncilResolution 1851 to address technical and legalaspects of the piracy issue.

What is happening at seain the area surroundingSomalia is of great concernto IMO, which has played, andis determined to continue to play,a pivotal part in all efforts aimedat promoting an appropriate,coordinated internationalresponse to this disconcertingsituation. The same applies tothe worrying situation that, forsome time now, has beenobserved in the Gulf of Guinea,where there has also been anunacceptably high level of acts ofpiracy and, more frequently,armed robbery against ships.Whereas the attacks off Somaliaare focused on hijacking of shipsand holding of seafarers for ran-som, the attacks in the Gulf ofGuinea are motivated by theft;

tend to be more violent; and pose a potentialthreat to the security of the energy supply in, andfrom, the region and to the marine environment.IMO, in co operation with the 25 member Statesof the Maritime Organization of West and CentralAfrica, is seeking to address these issues throughcapacity building and developing a regional"coast guard function network" addressing awide range of maritime safety, security and lawenforcement challenges.

While the aforementioned three themesoccupy our thoughts and minds, IMO'swork to enhance maritime safety andsecurity, facilitate international maritime traffic,progress legal issues and promote our technicalco-operation activities continue apace. Allinvolved in the industry have a role to play inachieving the IMO objectives of safe, secure andefficient shipping amid clean seas - and Posidoniawill provide an excellent opportunity for them tomake their contribution.

Whereas the attacks off Somalia are focused on hijacking of ships andholding of seafarers for ransom, the attacks in the Gulf of Guinea aremotivated by theft; tend to be more violent; and pose a potentialthreat to the security of the energy supply in, and from, the regionand to the marine environment.

INTL FORA

EXCLUSIVE INTERVIEW

ILIAS BISSIAS INTERVIEWS EUROPEAN COMMISSIONER FOR MARITIME AFFAIRS AND FISHERIES MARIA DAMANAKI

The Integrated Maritime Policy is one of the key challenges

and priorities of my mandate

..16

nal open market can bring. Even intra-EU trans-port is subject to a set of complex administrativeprocedures. The Action Plan on European mar-itime transport space without barriers, which wascommunicated in 2009, aims to reduce and sim-plify these procedures in order to make maritimetransport an attractive option and boost the sec-tor. The Commission is planning to propose adirective on this issue next year. We are currentlyworking on this in collaboration with the otherCommissioners concerned, such as theCommissioner for Transport and for Competition.

How will you manage to complete the frame-work for a common European maritime poli-cy with limited funding? At the time of the establishment of the currentfinancial framework, the Integrated MaritimePolicy (IMP) did not exist as a fully fledged policyand no resources were specifically earmarked tofinance it. However, we have been able to use amargin of flexibility within existing instrumentsto finance certain pilot projects. As the IMP devel-ops, we will need to look at the various fundingoptions. We are planning to propose a regulationin that respect in the course of 2010. However, Iam convinced that the added value and the suc-cess will not come from the size of its funding, butfrom the leverage effect it can bring by creating anew, more complete set of maritime initiativesand internal coherence.

17 ..

What are the main priorities of your policiesfor shipping in the next four years? Do youthink that the EU desires to preserve thestrength of the European shipping industry?Will EU policies take into consideration thespecial conditions of this economic sector incomparison to the rest of the economy? The maritime sector lies at the core of Europeansociety and its economy. A very large share of theEU population relies on it, directly or indirectly. Notonly should the EU aim to maintain this tradition,but it should seek to strengthen its position in theglobal stage. The Integrated Maritime Policy (IMP)contributes to this goal by providing coherencethroughout all our sectoral policies referring toseas and oceans: transport, tourism, fisheries,energy, environment, research, and coastal devel-opment. Driving forward the IMP is one of the keychallenges and priorities of my mandate. In thisway, we will put the maritime sectors and coastalregions, which are traditionally at the periphery, atthe centre of a new, dynamic and inclusive policyfor blue growth and jobs. The main action fieldswe have set for the coming years are: the promo-tion of an Integrated Maritime Governance, thedevelopment of cross-cutting policy tools, and thepromotion of co-operation and dialogue withthird countries that share the same maritimebasins as us.

During his mandate, Commissioner Borg had

proposed the creation of a common maritimetransport space without barriers. Is there stillthe plan for a common market, as regardsshipping services in the EU? Unlike other means of transport, sea transporthas not yet reaped the full benefits that the inter-

The recently appointed European Commissioner for Maritime Affairs and FisheriesMrs Maria Damanaki is a well known Greek politician. In her new capacity, she will promote in cooperation with the Vice President of the Commisision Mr. Siim Kallas the new policies

that will effect the everyday life of the European shipping industry. A hard worker, a good listener and a reasonable negotiator, Mrs Damanaki will face the challenges of our times backed

by her vast knowledge of politics and international affairs.

Blue Growth is about developing the policy tools thatwill allow us to exploit andexpand all the advantages thatthe seas can offer us. Its threemain goals are, (a) to createhigh quality jobs in order totackle growing unemploymentin the maritime sectors, (b) toinvest in innovation in order tofoster scientific and economicdevelopment, and (c) to promote a sustainable form ofdevelopment.

..18

What will be your collaboration with Vice-Presindent Siim Kallas and in which areas areyou planning to co-operate with him? We have an excellent collaboration with Vice-President Kallas, no less within the framework ofthe Steering Group of Commissioners for theIntegrated Maritime Policy. Some of our respon-sibilities are very closely interlinked. This proxim-ity gives us opportunities to co-operate andexamine together different aspects of the sameproblems. This spirit of collaboration lies at thecore of the IMP approach, and the Commission'stradition of collegiality. Obviously, in purelytransport matters, Vice-President Kallas isresponsible for holding talks with the Committeefor Transport. All signs indicate that theCommittee for Transport of the EP will be of greatsupport to the Commission in policy areas suchas maritime transport safety.

Can you elaborate on your aspirations on theso-called Blue Growth policy? In a nutshell, Blue Growth is about developingthe policy tools that will allow us to exploit andexpand all the advantages that the seas can offerus. Its three main goals are, (a) to create highquality jobs in order to tackle growing unem-ployment in the maritime sectors, (b) to invest ininnovation in order to foster scientific and eco-nomic development, and (c) to promote a sus-tainable form of development. To achieve thesegoals and the overarching objective of BlueGrowth, we will deliver a vast array of policy toolsand strategies. For example, by promoting one ofour cross-cutting tools -maritime spatial plan-ning- we can unleash the potential of our seas inorder to develop transport, energy, fisheries andresearch projects in the same sea area and in theframework of an integrated sea basin strategy, as

is being done in the Baltic Sea. The integratedmaritime surveillance system will facilitate theimplementation of all our policies as we are nowtrying to do in the framework of a pilot project forthe Mediterranean. As I see it, Blue Growth is notjust an option. It is a necessity to drive forwardand reinforce all aspects of the maritime sector.

You are a chemical engineer and an experton Greek trade and employee relations.Which is the future of the European ship-building industry? Are there ways of over-coming this current recession? The global recession has hit Europe very hard. TheEuropean shipping industry was no exception.Fortunately, we seem to be walking out of thetunnel, slowly but steadily. I have full confidencethat the European shipping industry, with itslong history and dynamism will come throughthe crisis. The current efforts of the EuropeanCommission to improve and simplify the regula-tory framework will help the process of securingthe competitiveness of the sector, by reducingoperational costs and facilitating long-termplanning and predictability.

We have been informed that you have held dis-cussions with the General Secretary to the IMOMr Mitropoulos. What are your opinions about

I was very glad to meet the General Secretary of the IMO for the firsttime since I was appointed European Commissioner. I consider it asthe beginning of a regular and fruitful co-operation between our twoorganisations. Needless to say that the International MaritimeOrganisation is a major player in the global Maritime Community.

EXCLUSIVE INTERVIEW

the future relations between IMO and EU? I was very glad to meet the General Secretary ofthe IMO for the first time since I was appointedEuropean Commissioner. I consider it as thebeginning of a regular and fruitful co-operationbetween our two organisations. Needless to saythat the International Maritime Organisation is amajor player in the global Maritime Community.We fully support its work, and in fact most of ourcurrent maritime safety is based on measuresintroduced by the IMO. A next step that I want towork on, particularly in the context of the exter-nal dimension of the Integrated Maritime Policyof the EU, is to improve the EU visibility in theIMO. In the meantime, the EU should continue itsactive contribution to the work of thisOrganisation particularly in subjects of highpolitical priority, such as the implementation ofsafety regulations, the training of seafarers, the

reduction of greenhouse gases on a global scaleor the fight against piracy.

What are your suggestions for the strength-ening and the promotion of the EuropeanMaritime Day? The European Maritime Day, which has been tak-ing place in May each year since 2008, providesus with a formidable opportunity to gather allthe stakeholders around the same table to dis-cuss the progress achieved, and the future stagesof all aspects of Maritime Policy. Despite itsyoung age, this event has already provenextremely popular and fruitful. Three years intoits existence and we are now examining ways toimprove not only its visibility but even its organ-isation, so that we can make the most out of it forthe stakeholders and the European citizens ingeneral.

The greek Union of Marine Enterprises hasinsisted that our national legal frameworkshould fully adopt and comply with EURegulation 3577/92 in order to deal with theproblems of passenger shipping. Are you inagreement with this request? This is a complex, ongoing matter, but we canalready say that some of the issues have beensolved, which for me is a positive sign of every-one's collaboration. The Commission will contin-ue to promote the full implementation of theEuropean legislation by finding a balanced solu-tion. The solution needs to take into account theprinciple of freedom to provide services of fullquality and safety and the concern of the Greekauthorities regarding the completeness of mar-itime services with islands and the needs of serv-

ice of general interest.

What is the general climate towards Greecein the EU, at the moment? Do you think that the EU wants to punish orhelp Greece? Greece is going through one of the most difficultphases in its recent history. Our European partnersrecognise that, and want to support us throughthis crisis. In that sense, there is absolutely nodoubt that the European Union wants to helpGreece. However, I think our focus should not beon what our partners say or do. Our main concern,as a nation, should be to go beyond the urgentmeasures which the government has had to take.Our country needs a real change. We not onlyhave to face the financial deficit but the generaldeficit in our perspective. We need a new, fair, andsustainable development model.

..20

Greece is going through one of the most difficult phases in its recenthistory. Our European partners recognise that, and want to supportus through this crisis.

EXCLUSIVE INTERVIEW

As every year, the European Maritime Day will be celebrated on the

20 May giving visibility to the sea and the maritime sector and raise

awareness of their importance among European citizens. For Europe,

shipping has been one of the key stepping stones to economic

growth and prosperity throughout its history. Maritime transport

services are essential in helping the European economy and

European companies to compete globally. Moreover, shipping and

all related maritime industries are an important source of revenues

and jobs in Europe. Seas and oceans are also part of our culture and

important perspective of our future as well.

..22

Seas and oceans arepart of our culture

BY RODI KRATSA

Vice-President of the European Parliament

EUROPEAN MARITIME DAY

A llow me to remind you that the EuropeanMaritime Day was established, followingmy proposal which dates three years back, joint-ly by the European Council, the EuropeanParliament and European Commission in 2008 aspart of the EU intergraded maritime policy.Through this initiative, we are aiming to raiseawareness of the importance of the Europeanmaritime sector for the European economy aswell as to highlight its fundamental role for theeconomic development, social and territorialcohesion, competitiveness and more jobs. In par-allel, we ought to bring out the environmentalthreats deriving from the land and particularlythe coast activities but also from the maritimeactivities and commit for the promotion of a har-monic sustainable maritime development.

In my capacity of Vice-President of theEuropean Parliament, I had the honor to repre-sent our Institution last year in May 2009, at thecelebration that it was held in Rome with highlevel speakers included Commission PresidentMr. Jose Manuel Barroso, as well as around 30ministers from EU Member States andMediterranean countries. I also participated inthe first celebration that was held in Athens inHellenic Parliament.

This year the Maritime European Worldwill meet again in Gijon of Spain on 18-21May 2010 for the celebration of the EuropeanMaritime Day, where innovation for sustainablegrowth of maritime sectors and coastal regionswill be in the heart of the discussions. I will havethe privilege this year to represent the EuropeanParliament and to highlight the importance weattach to the content and activities of theEuropean Maritime Day. Actually, we are discussing in the EuropeanParliament about the strategic goals of the EU'smaritime transport policy until 2018. EuropeanMaritime Day is established in the framework ofthe coordinated European maritime policy. Thismessage has to be clear and to reach local the

citizens. European citizens are increasingly awareof the importance of our common maritime her-itage and future and driving force.

We cannot forget that 22 of the EuropeanUnion's 27 Member States are coastal or islandStates, that over two thirds of the Union boun-daries are maritime and that the maritime spacesunder the jurisdiction of its Member States arelarger than their terrestrial territory.

Our Integrated Maritime Policy reflects aclear vision of how to address the chal-lenges of maritime prosperity, sustainabili-ty and security and is intimately tied to the fightagainst climate change and to recovering theeconomic competitiveness of Europe.

Furthermore, the current framework of theeconomic and financial crisis, the European mar-itime transport is expected to play a role of greatimportance as part of the European economyand as a driving force behind economic integra-tion: maritime transport in the Member States isexpected to increase from 3.8 billion tonnes in2006 to 5.3 billion tonnes in 2018. That meansthat in ten years time the infrastructure, includ-ing ports, its links to the hinterland, and theshipping industry have to be able to handle, at

least, 1.6 billion tonnes more than at present.Passenger traffic, including ferries and cruiseships, will also grow. Territorial continuity,regional cohesion and quality standards for seapassengers will have to be ensured.

Let me underline that European MaritimeDay will be celebrated across Europethrough the organization of events in local level:from Le Havre to Gdynia and from Turku to Trieste.Also, we encourage all the European regions,ports, cities and other maritime stakeholders tojoin in the celebrations and to work together sothat European Maritime Day can serve in thefuture as the focal date launching a 'maritimeweek' of conferences, festivities, networking,best practice exchange and benchmarking activ-ities throughout the EU. It is extremely encourag-ing that all involved cities, regions and organisa-tions have taken ownership of EuropeanMaritime Day by organising their events in paral-lel to the central European conference, thusbringing a wide variety of maritime issues to thepublic's attention and participation acrossEurope.In Greece, a country with historical pres-ent and future in maritime, several events will beheld as well.

23 ..

From left: Joe BORG, Commissioner for Maritime Affais, Altero MATTEOLI, Minister of Infrastructures and Transportof the Republic of Italy, Jose-Manuel Barroso, President of the European Commision and Rodi Kratsa, Vice-President of the European Parliament at the celebration of the European Maritime Day in Rome (May 2009)

..24

Joint Tripartite Declaration

Establishing a ''European Maritime Day"Strasbourg 20th May 2008

Recalling that Europe is a Maritime Continent with almost 70,000 km of coastline,

Recalling that 22 of the European Union's 27 Member States are coastal or island States,

Recalling that the maritime regions of the European Union account for some 40% of its GDP and of its population,

Recalling that over two thirds of the Union's boundaries are maritime and that the maritime spaces under the jurisdiction of its Member States are larger than their terrestrial territory,

Recalling the economic importance of, and synergies between sectors as diverse as shipbuilding and shipping, portsand fisheries, offshore energy, tourism, environment and maritime heritage,

Recalling that Europe must enhance its capacity to deal with the major challenges it faces such as globalisation, climate change, energy sustainability and environmental pressures on the coasts and seas,

Recalling the importance of coastal regions, islands and the outermost regions and the relevance of regional andlocal authorities in shaping and implementing the future European maritime policy,

Recalling the importance of a healthy marine environment both for the sustainability of economic activities on theseas and for the quality of life in coastal regions,

Mindful of the common heritage and the common responsibility of Europeans for the oceans and seas,

Recalling the vastness of the world's oceans and the role which the EU can play in preserving them as a resource forthe future of mankind,

Underlining the necessity to increase awareness and visibility of the importance of the oceans, of a vibrant maritimeeconomy and of the rich

European maritime heritage the benefits of which should be celebrated each year.

The European Parliament. the Council of the European Union and the European Commission

Approve the establishment of a "European Maritime Dau" to be celebrated May 20th each year, around whichawareness raising and networking activities will be organised.

..26

The European Parliament,1. Welcomes the communication on the EU's

maritime transport policy until 2018;2. Stresses the importance of the maritime

transport sector to the European economy,not only as a carrier of passengers, rawmaterials, goods and energy products butalso as the core of a wider cluster of mar-itime activities such as the naval industry,logistics, research, tourism, fisheries andaquaculture, and education;

3. Emphasises that EU maritime policy shouldtake account of the fact that the maritimetransport industry faces competition notonly within the Union but also, and aboveall, globally; emphasises, also, the impor-tance of the growth of maritime transport,as part of the wider transport sector, bothwithin and outside the EU;

4. Hopes that EU maritime policies will hence-forth be designed within the framework ofa 'single European sea' and, consequently,

calls on the Commission to develop aEuropean maritime transport policy as partof a common maritime area;

The market5. Urges the Commission to continue to com-

bat abuses of flags of convenience;6. Urges Member States, therefore, to encour-

age the use of their flags and to supporttheir maritime clusters on shore, for exam-ple by providing fiscal facilities such as atonnage tax system for ships as well as fis-cal facilities for seafarers and ship owners;

7. Considers that, like any sector of the econo-my, the maritime sector must in principlebe governed by the rules on State aid,although State aid may exceptionally bepermitted for specific cases provided that itis made available temporarily and in atransparent and comprehensible manner;

8. Considers that the guidelines on State aid toshipping, which expire in 2011, must be

retained and extended, since they havecontributed substantially towards main-taining the international competitiveness ofEuropean shipping, towards its ability suc-cessfully to overcome the often unfair com-petition from third countries, and towardsmaintaining itsleading position worldwide, and havetherefore helped to support the economiesof Member States;

9. Calls on the Commission to submit thepromised new rules on State aid for mar-itime transport in 2010, and further consid-ers that the Commission should submit theguidelines on State aid to sea ports asquickly as possible;

10. Emphasises, in this context, that State aidshould be used exclusively to supportEuropean maritime sectors that are com-mitted to social standards, the promotion ofjobs and the training of personnel inEurope, and to ensure the global competi-

Motion for a European Parliament Resolutionon strategic goals and recommendations

for the EU's maritime transport policy until 2018(2009/2095(INI))

EUROPEAN MARITIME DAY

BY PETER VAN DALEN, MEP

27 ..

tiveness of European shipping;11. Calls on Member States speedily to sign,

ratify and implement the UN Convention onContracts for the International Carriage ofGoods Wholly or Partly by Sea, known as the'Rotterdam Rules', establishing the newmaritime liability system;

12. Calls on the Commission to give greater con-sideration to maritime transport and itslandbased structures during the forthcom-ing revision of the Community guidelines forthe development of the trans-Europeantransport network, in particular the multi-modal linking of European sea ports withthe hinterland;

13. Welcomes the Commission's proposal for adirective on reporting formalities for shipsarriving in or departing from ports of theMember States of the Community(COM(2009)0011), in order to simplify,reduce and eliminate administrative proce-dures for European short sea shipping; callson the Commission to continue to supportshort sea shipping with a view to substan-tially increasing the performance capacitiesof maritime transport within the Union;

Social aspects14. Welcomes initiatives by Member States and

the Commission to make maritime occupa-tions more attractive to young EU citizens;emphasises the need to provide lifelonglearning and retraining for seafarers at alllevels, on shore and on board, with a view tostrengthening the professional qualifica-tions and skills of the workforce; advocatesalso that more information on the sector beprovided at schools and that more trainee-ships be made available;

15. Calls on Member States, within the scope ofinternational conventions such as the STCWConvention and the ILO 2006 MaritimeLabour Convention, to improve and mod-ernise existing training programmes with a

view to further qualitative development ofmaritime colleges;

16. Stresses that seafarers from third countriesmust comply with satisfactory trainingrequirements in accordance with the STCWConvention and calls on ship owners andnational inspectorates to guarantee andenforce this, where necessary with the assis-tance of the European Maritime SafetyAgency (EMSA); reiterates its request forrapid ratification by Member States of theILO 2006 Maritime Labour Convention andearly adoption of the Commission's propos-al, based on the industry agreement, forincorporating key elements of theConvention into EU law;

17. Calls on Member States to encourage theuse of EU seafarers in their own fleets and tocreate sufficient facilities to prevent themigration of seafarers outside the Union;

18. Welcomes the Commission's suggestionthat Member States should promote coop-eration between European maritime institu-tions, and encourages Member States toharmonise their respective curricula andtraining schemes in order to promote anddevelop high levels of qualification andadvanced skills among EU seafarers;

19. Emphasises that the social dimension andthe working conditions of EU seafarers areclosely linked to the competitiveness of theEuropean fleet, and that it is necessary tofacilitate labour mobility in the maritimeindustries throughout Europe and to ensurea fully functioning internal market withoutbarriers and without unjustified restrictionson the provision of services;

20. Encourages the exchange of good practicesin relation to employment conditions andsocial standards, as well as an improvementin living conditions on board vessels, partic-ularly through the development of informa-tion and communication technologies, bet-ter access to healthcare, better safety stan-

dards and training to enable seafarers tocope with the risks inherent in their jobs;

21. Stresses that inspections must be specificand risk-based and must not generate any-superfluous regulatory pressure on theindustry;

22. Hopes that the capacity of technologicaldevelopments to compensate for the declin-ing availability of seafarers will be investi-gated, but warns against introducinguntried technology too hastily;

23. Calls on maritime port authorities toimprove facilities for seafarers on ships wait-ing at anchor in roadsteads, including facili-ties for easier transportation from ship toshore and vice versa;

The environment24. Acknowledges that considerable progress

must be made on reducing emissions of sul-phur oxides and nitrogen oxides, particu-lates (PM10) and CO2, and that this is neces-sary within the framework of the EU climateprotection goals; stresses that the sector cancontribute to the fight against harmfulemissions and climate change and thatpublic and private investments in researchand development will be of particular inter-est in this regard;

25. Stresses that emissions reductions must beagreed rapidly and implemented with bind-ing force via the International MaritimeOrganisation (IMO) in order to limit dispari-ties in competitive conditions, but that thismust not prevent the Union from taking ini-tiatives aimed at further reductions by thefleets of its Member States, thereby encour-aging the other continents to become com-petitive in this area; draws attention here tothe major disparities between short andlong-distance sea shipping, which must beconsidered when reaching agreements inthe IMO;

26. Calls on Member States to make more use -

..28

where possible in conjunction with neigh-bouring countries - of the option of desig-nating maritime emission control areas,particularly for nitrogen oxides; emphasisesthat the establishment of further maritimeemission control areas must not lead to dis-tortion of competition within Europe;

27. Supports measures that encourage modalshifts towards maritime transport with aview to easing congestion on major roads;invites the Union and Member States tocreate logistics platforms at ports, which areessential for developing intermodality andstrengthening territorial cohesion; stressesthat international and EU rules must nothinder the efforts undertaken by nationalauthorities in this regard; hopes to see therapid and extensive introduction, within theframework of the Union for theMediterranean, of 'motorways of the sea',which will help to reduce both pollutionand congestion in land networks;

28. Supports in principle the amendments toAnnex VI of the MARPOL Convention toreduce sulphur oxide and nitrogen oxideemissions from ships, adopted by the IMOin October 2008; is concerned, however,about a possible shift back from short seatransport to road haulage as a result of theintroduction of the 0.1% sulphur limit,envisaged as of 2015, in the sulphur emis-sion control areas in the North Sea and theBaltic Sea; calls on the Commission, there-fore, to submit a relevant impact assess-ment to Parliament as swiftly as possibleand by the end of 2010 at the latest;

29. Considers that all modes of transport,including maritime transport, must gradu-ally internalise their external costs; believesthat the introduction of this principle willgenerate funds that can subsequently beused primarily for efforts to encourageinnovation;

30. Calls on the Commission and Member

States also to work on alternative instru-ments such as the introduction of a levy onbunker fuel, preferably geared to the quali-ty and environmental performance of thefuel, or the concept of 'green ports', whereclean vessels are dealt with more quicklyand/or pay reduced harbour dues;

31. Calls on Member States to work within theIMO to set and implement appropriate andglobally applicable environmental standards;

32. Notes in this connection the breakthroughin inland shipping technology which hasmade it possible to reduce emissions fromexisting ships' engines substantially andthe possible use of liquid natural gas as afuel; calls on the Commission to investigatewhether these techniques can also be usedin seagoing vessels and how their imple-mentation might be accelerated;

33. Deplores the fact that the CopenhagenClimate Summit did not succeed in reach-ing any conclusions with regard to reducingemissions from seagoing vessels, butstresses that intensive efforts must contin-ue, both in the post-Kyoto process and inthe IMO, to agree global measures to bringabout such reductions; invites MemberStates to make every effort to ensure thatthe IMO receives a mandate for the nextinternational climate negotiations, withquantifiable reduction targets for maritimetransport;

34. Calls on the Union to lead this process atglobal level, notably in the IMO, with a viewto reducing emissions from the maritimesector;

35. Stresses the importance in European portsof interoperable technical facilities for thesupply of electricity from shore to ship,which can considerably reduce pollution;calls on the Commission to ascertain inwhich ports these facilities can be utilisedefficiently;

36. Stresses that, as part of its research and

development policy, the Commission mustgive priority to innovation in the area ofrenewable technologies for use on vessels,such as solar and wind technologies;

37. Calls on the Commission to examine thepotential for reducing and monitoring pol-lution by using intelligent technologies inthe transport sector, notably Galileo;

38. Stresses the need to promote paper-freeport and customs operations and to easecooperation at ports between the variousservice providers and consumers throughthe use of intelligent transport systems andnetworks such as SafeSeaNet and e-Custom, with a view to speeding up portoperations and reducing pollution;

Safety39. Appreciates the adoption of the Third

Maritime Safety Package, and calls onMember States to implement the packagespeedily;

40. Advocates stringent checks on shipbuilding,including on the quality of steel used andon vessel design and maintenance, as pro-vided for inter alia in the amended legisla-tion on classification societies;

41. Supports the change of course in the ParisMemorandum of Understanding (MoU) onPort State Control, which entails replacingregular inspections with risk-based inspec-tions, so that precisely those vessels whichdisplay numerous shortcomings are tackledeffectively;

42. Calls on Member States and ship owners toseek to be placed on the Paris MoU 'whitelist'; calls on Slovakia, in particular, to makean extra effort in this regard;

43. Calls on national inspectorates and othernational authorities to cooperate moreclosely in exchanging data on vessels andtheir cargoes, so as to reduce regulatorypressure but increase the effectiveness ofinspections; calls for the rapid introduction

..30

of an integrated information managementsystem through the use and improvementof resources already available, especiallySafeSeaNet; calls on the Commission to putin place as soon as possible an EU-widecross-border and cross-sectoral surveillancesystem;

44. Is aware of the danger of piracy on the highseas, notably in the Horn of Africa area andthe waters off the coast of Somalia, andcalls on all ship owners to cooperate withgovernment initiatives to protect themagainst piracy, along the lines of the EU'ssuccessful first naval operation, Atalanta;calls on the Commission and MemberStates to strengthen cooperation amongthemselves and within the United Nationsin order to protect seafarers, fishermen andpassengers as well as the fleet;

45. Notes that the global approach to combatingpiracy cannot be limited to an internationalnaval force but should form part of a com-prehensive plan aimed at promoting peaceand development in the area concerned; isaware, too, of the need for full and correctimplementation by ships of the self-protec-tion measures adopted by shipping organi-sations, through the Best ManagementPractices approved by the IMO;

Miscellaneous46. Stresses that shipping is a global industry

and that agreements ought, for preference,to be concluded on a global scale; considersthe IMO to be the most appropriate forumfor this; calls on Member States to makemore effort to ratify and implement quicklyIMO conventions which they have signed;

47. Acknowledges fully, moreover, the Union'srole in the transposition of internationalrules into EU law and in the implementa-tion of and support for maritime policy, forexample by EMSA;

48. Underlines the need to speed up the mod-

ernisation and expansion of port infrastruc-ture capacities in anticipation of the expect-ed rise in the volume of goods transportedby sea; points out that this will require hugeinvestments, which will have to complywith transparent and fair financing rules inorder to ensure fair competition amongEuropean ports; calls on the Commission toensure that the regulatory framework iscoherent in this regard;

49. Calls on the Commission to consider itscommunication on the EU's maritimetransport policy until 2018 and this resolu-tion as the basis for the forthcoming reviewof the Transport White Paper;

50. Calls for a policy that promotes connectionsbetween ports and inland areas (dry portsand logistics platforms) in regions sufferingfrom congestion, this policy to be incorpo-rated into the TEN-T review;

51. Underlines the economic and strategicimportance of shipbuilding, which makes itpossible to develop and use the new tech-nologies applicable to vessels and to pre-serve crucial European skills that are need-ed to build new generations of vessels; callsfor measures to support innovation,research and development, and training,with a view to developing a competitiveand innovative European shipbuildingindustry;

52. Requests that it be obligatory in port mod-ernisation and expansion projects to equippassenger terminals and new passengerships with facilities for people with reducedmobility;

53. Welcomes the initiative to develop a cam-paign to promote best practices amongpassenger transport and cruise ship opera-tors in relation to passengers' rights;

54. Calls on the Commission to take intoaccount during the current TEN-T reviewthe recommendations for the EU's mar-itime transport policy until 2018, notably

those concerning efficient integration of the'motorways of the sea' and inland water-way transport, as well as the network ofports of European interest as integratingnodes;

55. Calls on the Commission to draft a compa-rable strategy for European inland water-way transport and to coordinate it with thepresent strategy, in order to promote thedevelopment of an optimised transportchain linking maritime freight transportand goods transport on inland waterways;

56. Calls on the Commission to submit withoutdelay its promised roadmap, providingessential details to supplement its commu-nication;

57. Instructs its President to forward this reso-lution to the Council and the Commission.

Summary of the rapporteur's point of viewThe rapporteur is favourably impressed by theCommunication from the Commission. As thedocument deals with numerous subjects, hisreport is confined to a few priority points. The rap-porteur primarily considers that the importance ofthe maritime sector cannot be stressed too much.Europe's maritime sector makes a clear and vitalcontribution both to the Community's internaleconomy and to Europe's transport system. Theinterests of the European maritime transport sec-tor must therefore be assigned high priority inestablishing general European transport policy. Itmust be realised that the European maritime sec-tor mainly operates and competes on a globalmarket.This global market also means that policy needs tobe made to measure for maritime transport. Therisk of reflagging, with all its adverse conse-quences for the environment, the quality of ship-ping and the maritime cluster, must not be under-estimated. The rapporteur therefore considers thatthe Member States should do their utmost toencourage the (existing) use of their flags, for

..32

example by providing tax facilities for tonnagetaxation and fiscal facilities for seafarers and shipowners. The rapporteur looks forward to the newrules on State aid which the Commission haspromised. He calls on the Commission to submitthem in 2010.As regards employment and working conditions,the rapporteur considers that maritime occupa-tions should become more attractive for young EUcitizens. Particularly if maritime transport is togrow as expected, demand for crew members willonly increase. It is therefore important that young

people of all ages should receive informationabout the sector. It is also necessary to hold outattractive career prospects to seafarers, both at seaand on shore. At the same time, it must not bemade impossible for ship owners to hire third-country nationals for their maritime transportoperations, although of course it is important thatsuch employees meet the training requirementsand have the requisite professional qualifications.The rapporteur also considers that the legislationadopted in the ILO must be supported, ratified andadequately enforced worldwide to keep the work-ing conditions of all seafarers up to scratch. Themaritime transport sector faces major challengeswith regard to the environment. The primary taskis to improve the environmental performance ofseagoing ships substantially, and emissions ofSOx, NOx, particulates (PM10) and CO2 must bereduced. In this connection it is very importantthat agreements on the subject should be reached

at global level in order to combat the risk of reflag-ging to non-participating countries. The rappor-teur advocates the development of emission con-trol areas in European waters. To this end, he callson the Member States, where possible withneighbouring countries, to designate such areas,particularly with the aim of limiting NOx emis-sions. The Commission and Member States mustalso devise alternative measures to improve envi-ronmental performance. These might include alevy on bunker fuel geared to the quality and envi-ronmental performance of the fuel used, and the

concept of Green Ports. Under such a'bonus/penalty' system, cleaner vessels would bedealt with in port more quickly than more pollut-ing vessels and/or would receive a discount ontheir harbour dues. The rapporteur also has highhopes of the technological development of seago-ing ships. In recent years, inland waterway vesselshave made great progress in their environmentalperformance thanks to the development of newfuels and better engines. The Commission shouldinvestigate whether these technological develop-ments can also be applied to maritime shipping.Finally, the rapporteur considers that electricitysupply facilities should be established in sea portsto reduce emissions in ports.In the field of safety, the rapporteur is very curiousabout the practical details of the Third MaritimeSafety Package. Member States are thereforecalled upon to implement the package quicklyand correctly. The rapporteur also takes a

favourable view of the decision by the Paris MOUto switch to risk-based inspections. This will pre-vent unnecessary inspections, increase the effec-tiveness of monitoring and reduce the red tape forthose subject to inspections.Lastly, on the closely related subject of security, therapporteur wishes to express his unconditional sup-port for the Atalanta mission which is protectingseagoing vessels against piracy around the Horn ofAfrica. Ship owners ought, in addition, to take upthe security options available from Atalanta andother international cooperation bodies against pira-

cy. As soon as possible, arrangements must also beagreed for appropriate trials of pirates who havebeen caught. The fact that in some cases appre-hended pirates are currently released because theycannot be tried anywhere is hard to accept.Finally, as maritime transport operates on a glob-al market, primary legislative responsibility restswith the IMO. Within the IMO, the European Unionshould play a proactive role with a view to secur-ing the drafting and ratification of new rules. TheEU also, of course, plays a very important role intransposing IMO rules into the EU acquis andimplementing them.Particularly at the implementation stage, EMSAshould play the role appropriate to it. Inspectionsand supervision should be performed at MemberState level in close consultation with the ParisMOU. The rapporteur also looks forward to theRoad Map for Maritime Policy until 2018 whichthe Commission has promised to submit.

While shipping has been an essential component of economic and international life since its

origin, we are at the dawn of a new era. A new international policy agenda is emerging

which needs to be addressed at the highest level by key governments and regulators world-

wide, with major implications for the maritime industry. To identify and contribute to this

agenda, the Center for Energy, Marine Transportation and Public Policy (CEMTPP) at

Columbia University in New York has put in place an ambitious programme. The Onassis

Public Benefit Foundation, the Maria Tsakos Foundation and Peter John Goulandris have

greatly encouraged this pace-setting effort.

..34

INTL FORA

T he first reason for the growingimportance of marine transportationis, quite simply, the further progress andtransformation in economic globalisationpatterns. The re-organisation of manufactur-ing and commerce around global supply chainscentred on China and the Far East is reflected in ahuge maritime conveyor belt that sees mineralores and raw material converge upon Asia, withmillions of container boxes every year carryingthe transformed products from Asia to the rest ofthe world. One feature of this trade is the increas-ingly asymmetrical nature of its geographic locusin the East. Another is its surprising resistance tothe economic slowdown in the West as thegrowth of Asia continues unabated. The importance of shipping for 21st century gov-ernments and regulators is grounded in at leasttwo more considerations. The externalities asso-ciated with shipping are now reaching wellbeyond the shipping sector, presenting policy-makers with challenges to be addressed inbroader arenas than used to be the case. A goodexample is sulphur emissions. Considerable

A new international agenda for shipping policy and regulation

BY ALBERT

BRESSAND1

..36

progress has been made to reduce emissions ofSOx from on-shore sources, to the extent that, ina couple of years, the majority of the sulphuroxide in the European air mass will come fromsea-based sources. Obviously, this is bringingsea-based emissions to the attention of policy-makers and agencies that had hardly heard ofshipping just a few years ago. Even if less striking, a similar process has begunregarding the emission of greenhouse gases byships. In this case, what matters is not local pol-lutants but the contribution to the global carbonequation. Whereas the contribution of shippingcan still be considered limited, marine trans-portation as a whole has a carbon footprint high-er than that of Germany. Moreover, the sector'semissions under business-as-usual are projectedto increase by 150% to 250% by 2050 (com-pared to 2007 levels). Furthermore, not only are sea-based emissionsincreasing more rapidly but, together with airtransportation, shipping happens to be amongthe small number of industries to which main-stream regulators are now turning their atten-tion. As a result, the age when ship owners coulddeal with a relatively limited number of regulato-ry and policy arenas is now over, which is a trib-ute both to the achievements of the industry andto the natural tendency by regulators and gov-ernments to gradually extend their reach fromthe familiar to the less familiar. 21st century policymakers have to confront anew set of issues and challenges that are globalin nature and go beyond simpler forms of inter-dependence between various countries' policies.The only such issue in the previous century wasthe risk of nuclear annihilation, and even then

only a relatively small number of countries werereally involved. By contrast, climate change brings to the table anew type of issue for which national action onlymakes sense within a tightly co-ordinated globalsystem. This means that shipping will be lookedupon not simply in terms of its technical contri-bution to such challenges, but also regarding itsrole in addressing climate change at the globallevel (see negotiations under way in the UN con-text on a global tax on bunker fuels that wouldbe a central resource for the proposed GlobalAdaptation Fund). Indeed, a major challenge for the shippingindustry in the 2010s is whether it will be per-ceived as a provider of global solutions or merelyas a source of global problems. How the industryinteracts with the full array of regulators and pol-icymakers -and not just with those with which itis more familiar- will be essential in shaping thisperception.

Columbia University intends to be the Ivy LeagueAmerican University that helps both the shippingindustry and policymakers with the transition tothis era. To that effect, CEMTPP has convened agroup of distinguished scholars and has organ-ised interactions with policymakers and industryleaders. As we speak, this work is being translatedinto Scenarios for Marine Transportation in the year2030 that will put the growing governance chal-lenge in the broader perspective of economic,technological and political transformation. We lookforward to interacting with the global Posidoniacommunity on these essential matters.

1. The author is Aristotle Onassis Professor in the Practice of international and Public affairs and Executive Director of theCenter for Energy, Marine Transportation and Public Policy atSIPA, Columbia University, New York

By contrast, climate change brings to the table a new type of issue forwhich national action only makes sense within a tightly co-ordinatedglobal system. This means that shipping will be looked upon not simply interms of its technical contribution to such challenges, but also regardingits role in addressing climate change at the global level (see negotiationsunder way in the UN context on a global tax on bunker fuels that wouldbe a central resource for the proposed Global Adaptation Fund).

INTL FORA

..38

MARKET

BY JOHN C. PACHOULIS, General Manager Megachart Inc.

President "Hellenic Shipbrokers Association"

Asian waves overinternational

shipping

It is common knowledge that

world trade in general and the

shipping engine in particular

have depended on Asian markets,

which continued to positively

support and promote internation-

al trade thanks to their develop-

ment programmes, from the ini-

tial financial crisis up to present-

day recovery.

CChina's growth, according to its govern-ment's moderate target-setting, had beenexpected to reach a level of 8% this year.

It now seems it will surpass the 10% mark,boosted by the country's huge internal marketand competition among local steel mills, whichhas been driving product prices up. Consequently,the respective freights for capers have beenhigher than anticipated.

Last year, the remarkable and positivefact was the increase of imports of ironore. In excess of importing the expected andplanned quantities of about 380 million tons,China in fact imported nearly 515 million tons.This was amongst the main reasons whichresulted in the smooth recovery of the shippingmarket from the 773 points of Baltic Dry Indices(BDI) in January 2009 to over 3,000 points inDecember. Points fluctuated from 1,500 to 4,660during the year, contrary to predictions by someanalysts who insisted that the market was aboutto collapse.

This speedy recovery of the market exempli-fied that shipping, being an industry that servesinternational trade, had the strength, agility andpotential to overcome the deep economic crisis.Please bear in mind that world trade lost some13% of its volume during 2009 and has beenpredicted to rise approximately 5% in 2010.

39 ..

Meanwhile, the developed economies grow at a moderate pace of 1.3% -1.5% despite an uneven recovery and fragile growth conditions. Fortunately,Asian markets are delivering to the developed world more than it buys.

Freightwise, the continuous demand of raw materials mainlyfrom the Chinese market allowed the shipowning world to be optimistic,despite a great number of newbuildings which will be delivered by 2012. Atthe end of 2009, the world's bulk carrier fleet was standing at 448.5 milliondwt and the order book was for another 258 million dwt representing closeto 58 percent of the existing fleet. The expected oversupply will probably be balanced by the expected increaseddemand, as the economic crisis is expected to decline by the time the major-ity of the newbuildings will be delivered. Obviously, older tonnage will bescrapped as well, as the average scrapping age of bulkers is nowadays 30years, representing just 4.4% of the world's bulk carriers fleet. In the mean-time, 15% of them represents vessels over 25 years and 25% over 20 years. Itis obvious that with the new deliveries, the average age of vessels being ledto scrapyards will be younger than the over-30-year norm of today, providedthat the scrap prices will remain at acceptable levels.

In the meantime, global economic prospects for 2009-2010began showing considerable improvement compared to the pre-dictions of 16 months ago. The fall in GDP is slowly decreasing and the pro-mising growth forecasts for the Asian, South American and other developingcountries are proving to be correct. Last year's industrial production seems tobe less dramatic than expected. China is leading again with an impressivegrowth rate of over 16% followed by India at over 9% and Vietnam at 7 %. As nearly half of the world's bulk carrier fleet is connected to the demands ofthe steel industry, it is easy to understand that the raw materials for the pro-

duction of steel are boosting the shipping market. Coal is another importantfactor affecting the dry bulk market. Coal was the leading Chinese import andincreased by nearly 170% during 2009. This is in comparison to 2008, whenimports nearly reached the 100m tons mark. Australia, South Africa, USA,Russia, Venezuela, Indonesia, Colombia and -in recent years- Vietnam are themain sources of this commodity. Although demand by traditional buyers,such as Japan and Europe, has substantially decreased, production has beenoffset by demand from India and China, which has had a positive effect oninternational shipping markets. Grain and sugar trading is steady, withexporting countries seasonally increasing the demand for transportation,especially in the Atlantic, the Mediterranean and the West Coast of Canadaand the USA.

Under the present trade conditions, we can predict that theshipping market will be stable throughout 2010. We might besubjected to the usual fluctuations, which we have been experiencing duringthe past few years. Shipping is also dependent upon reactions by the interna-tional financial and banking institutions, which may assist by implementingstimulus packages, in order to fight the economic crisis.

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During the past years the Greek owned fleethas been increasing both in terms of numbersof ships and in its deadweight capacity mainlyattributed to the fact of the large orderbook placedby shipowners. In more detail, in 2010 there were a total of 3,996of all kinds and sizes of Greek owned vessels with atotal deadweight capacity of 258.1m representing14.9% of the world fleet in terms of dwt capacity.The average age of the Greek owned fleet is 11,6years while world fleet average age is 12.9 years(Table 1.).The Greek fleet orderbook numbers 645 vessels oftotal capacity 54.1m dwt while Greek shipownerscontrol 20.9% of world tankers fleet and 18.1% ofworld dry cargo fleet in terms of dwt capacity.It is interesting to note that although total worldorderbook which includes 8.677 vessels (all cargocarrying types and sizes) or 28% of the currentworld fleet, the Greek orderbook makes up for justover 14% of this (Table 2.).In addition to increased Greek newbuilding order-ing there is also considerable amount of Greekactivity in the S&P market (15.3% of the world-wide activity) since this segment still proves to bethe "backbone" of Greek shipping (Table 3.).

The current situation in the global andGreek ship financing scenei. The Global shipping finance market The 30 largest Global shipping banks' lendingcapacity at the end of 2008 reached the amount of$370bn. This total exposure was mainly offered by

30 shipping banks with a total loan portfolio ofalmost 90% of the total. These totals do notinclude the contribution of Far Eastern and MiddleEastern banks which do not make their figuresavailable (Table 4.).In 2009 we witnessed a severe drop in fresh lend-ing as well as a significant reduction of loan com-mitments. Global lending has been reduced main-

ly as a result of: Newbuilding cancellations eliminating bank

commitments Reductions of committed facilities for new-

buildings Utilization of the natural run off of the loan

book via repayments, vessel sales, pre-pay-ments

..40

ANALYSIS

2010 - Latest developmentsin Greek Shipping

BY GEORGE XIRADAKIS, Managing Director of XRTC Ltd Business Consultants

8.677 490 28% 826 69,8 14%

World N/B Orders 2010 Greek N/B Orders 2010

No of Capacity % world No Capacity % world

Vsls (mil.dwt) fleet dwt of Vsls (mil.dwt) fleet dwt

Source: Greek Statistical Bureau

Table 1.

Table 2.

Source: Lloyd's Register of Shipping - Fairplay

Source: Clarkson's Shipping Intelligence

Table 3. S & P movements of second-hand vessels

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Greek 171 227 308 344 300 228 242 369 171 167

Worldwide 797 757 956 1319 1658 1281 1490 1987 1300 1093

% Greek 21.5% 30.0% 32.2% 26.1% 18.1% 17.8% 16.2% 18.6% 13.2% 15.3%

41 ..

Marked slowdown in fresh lending.It is also worth noting that Global shipping vol-umes for syndicated loans for 2009 fell from $87bnin the corresponding figures for 2008 to $32bn(Table 5.).

ii. Asian shipping finance market It is known that Japan, Korea and China account for82% of shipbuilding industry. It was thereforemore than expected and Asian banks would accel-erate a dramatic shift in the centre of ship finance.According to Marine Money source the state sup-port of Asian countries is changing the Asian shipfinancing environment.

India: The Indian National Shipowners' Associationrepeatedly asked the government to set up a Rs100bn ($2bn) fund that will provide shipownersloans at competitive rates and encourage them toacquire vessels from domestic shipyardsMalaysia: The government has allocated an addi-tional RM 2bn ($542m) from its 2009 budget to aRM 1bn shipping fund, managed by BankPembangunan and a shipping venture fund GlobalMaritime Ventures.Taiwan: Shipowners can take advantage of newtonnage tax system and reduce tax burden by asmuch as 90%S.Korea: Korea Asset Management and KoreaDevelopment Bank have launched distress funds ofup to 6 trillion won ($4.8bn) for ship acquisition.Korea Asset Management will raise the moneyfrom local financial institutions and private equityinvestors.China: The total shipping portfolio of Chinesebanks is estimated at RMB 600bn-700bn ($88bn-102bn).

It is worth noticing the role of Chinese in shippingfinance. This is a very crucial field which is viewedas the last fort. Their banks will play an importantrole worldwide as China has both cash andappetite to support Shipping industry.Chinese Shipping growth that has overtaken theGreek one and the Banks' cash flow are the ingre-dients that will assist Chinese banks to penetratethe Shipping Finance sector. Two years ago theChinese banks capabilities were limited intoChinese yards financing and in internal Chineseshipping financing.

Source: Marine Money

Table 4.

Table 5. Global shipping volume vs. new money

Source: Marine Money

Table 6. Banks financing evolution of greek shipping

Source: Petrofin

..42

ANALYSIS

There are some foreign shipping companiesincluding some Greek ones that managed to enterinto relations with Export-Import Bank of China,Bank of China and Industrial & Commercial Bankof China in relation to the financing of shipbuildingvessels in China. The specific bank became slowlyslowly more international with its participation insyndicated loans arranged by foreign banks fornon Chinese companies. Therefore, the bank man-aged to build gradually its know-how whichtogether with the young people forming the coreof the banking executives that will finance theindustry.Some of the Greek shipowners who have placednewbuilding orders in Chinese yards include: JohnAngelikoussis, Villy Panagiotidis, Dinos Martinos,Tomazos company, Victor Restis, GeorgeEconomou, Nikolas Tsakos, Basil Papachristidis,Latsis Group, Andrew Martinos, GregoryKallimanopoulos, Evangelos Marinakis, HarisVafias, Nikos Fistes and Diamantis Lemos.

iii. The Greek shipping finance market The Greek ship lending portfolio of drawn andcommitted amounts at the end of 2009 was$67.02bn while the number of banks involved inGreek shipping finance amounted to 39. Thesenumbers show the reduction of the total portfoliocompared to 2008 figures for the same reasonsidentified above. The number of banks has beenalso reduced from 41 to 39 due to mergers andacquisitions (Table 6.).Although Greek banks involved in the financing ofGreek shipping are arithmetically more than ofthose of different nationalities, they are out-weighed in terms of commitment size by theGerman banksGreek banks' commitment to Greek shippingfinance is of almost 24% ($16 billion) of the glob-al commitment. In contrast German banks havethe largest commitment with a total of $19.3bn,an impressive participation of 29% followed byU.K banks with a total of $16.4bn and 24% partic-ipation (Table 7.).

iv. The Banks financing Greek shipping The banks involved in the financing of Greek ship-ping are presented in Table 8 per nationality.

Table 7. Banks nationality financing greek shipping

Table 8. Banks involved financing greek shipping

Source: Petrofin

NATIONAL BANK OF GREECEEMPORIKI BANKALPHA BANKMARFIN EGNATIAPIRAEUS BANKEFG EUROBANKFIRST BUSINESS BANKASPISAEGEAN BALTIC BANKBANK OF CYPRUSAGRICULTURAL BANK OF GREECEPROTON

GREEK BANKS

NORDEA BANKDEN NORSKE BANK

NORWEGIAN BANKS

CALYONBNP PARIBASNATIXIS

FRENCH BANKS

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It is my belief that this is what is reflected inthe outcome of this hearing. To the detrimentof those who have anticipated this hearing to

be a "public trial" of Greece, the presentations ofthe high level speakers but also the majority of

the interventions of the MEPs that took the flooron the 14th of April, did not focus on puttingblames but on showing the way ahead, high-lighting the lessons that can be learned and theway to deal with the inefficiencies and weak-nesses of the European Monetary Union that arehidden behind the Greek case. The Greek government's and above all the Greekcitizens' gigantic and overwhelming efforts toimplement extremely severe measures andachieve fiscal consolidation in the shortest time-frames have been widely recognized and sup-ported by almost every speaker and participant.Commissioner Olli Rehn has stated his convictionthat Greece is now back on the right track ofmeeting its deficit reduction targets, whereas MrRadermacher, Director General of Eurostat, hasconfirmed the substantial improvement of Greekstatistic data. Even on the problematic issue ofthe swaps' use and their controversial roleregarding the national accounting reports, theCommission's representatives were rather reluc-tant to point fingers against only one memberstate, stating at the same time the communitylegislation loopholes existing until 2008.

What was rather common view expressed by themajority of those who intervened was thatGreece is just a symptom of a weakness thataffects Eurozone in its core. The events that fol-lowed the hearing, with extreme speculationpressures led from the markets and internationalrating agencies towards other countries like Spainand Portugal as well as high risk of spill overeffects to euro's stability, have already proventhat. And what I find really encouraging was therather common view expressed on how to pro-ceed not through "punishing or condemning onemember state" but through the strengthening ofeconomic coordination, reinforcing and adaptingEuropean tools on crisis prevention and manage-ment and implementing efficient supervisoryrules that can combat speculation againstnational economies and the single currency. In that sense the European Parliament has -through this hearing - vigorously assumed its roleas a democratic accountable European institu-tion, ready to debate on European solutions toEuropean problems and to commit to the so longdebated and hardly demonstrated in the last fewmonths principle of European solidarity.

After several weeks of divergentscenarios and rumours on the socalled "Greek crisis" the decision ofthe European Parliament to hold ahearing under the auspices of itsEconomic and Monetary AffairsCommittee had one and clear inten-tion: to end the endless circle ofunreliable rumours severely dama-ging not only the Greek economybut also eurozone's credibility alto-gether and to provide European citi-zens and their representatives withliable and integrated responses.

The latest news reports concerningthe Greek economy are grave.Unfortunately, as things stand, thebail-out mechanism is the lastchance for Greece, before it has todeal directly with its creditors. Ifwe fail this time, there will be nomore bail-out mechanisms; therewill be no more money to borrow.

Revisiting the Greek crisis:Did the eurozone trade without coherence?

N.X.44

EUROPEAN POLICY

BY ANNI PODIMATAMember of the European ParliamentVice-President of the Committee on Industry, Research and Energy, Member of the Committee on Economicand Monetary Affairs, Member of the Special Committee on the Financial,Economic and Social Crisis

Three well respected, skilled and experienced Greek Membersof the European Parliament explain the reasons behind theagony for our countrys financial future as well as the anxietiesfor Europe and its survival as we know it today.

BY THEODOROS SKYLAKAKIS

MEPCommittee on the Environment, Public Health and Food Safety

n 2009, Greece was in the unenviable posi-tion of being the country with the secondlargest deficit in the world, the third largest

public debt in the world and the largest publicdebt owed to foreign creditors. It also had a hugeproblem in terms of its competitiveness. No othercountry in the world had such a lethal combina-tion. Thus, the more the markets scrutinised oursituation -and we made that easier in the waywe handled our international image over the lastfew months- the more worried they became.

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Obviously, we cannot solve the Greek problemthrough more public expenditure. A Keynesiansolution cannot solve the Greek equation,because we don't have money to spend any-more. So we must find an answer despite theunavoidable recession.

The IMF's usual solutions are not easilyapplied to the Greek economy (e.g. we can'tdevalue), so we need to put forward our ownsolutions. That is why I have asked my party topropose a wider political agreement on thebasis of some necessary and important structur-al reforms such as:

1. A concrete and fully elaborated plan on fur-ther reducing public expenditures andincreasing taxes (and a long-term commit-ment to decrease taxes to businesses whenwe get over the acute phase of the crisis).

2. A ten-year moratorium on hiring in the pub-lic sector.

3. Increase of the retirement age to 66 years,with no exceptions.

4. Complete liberalisation of working hours forsmall enterprises.

5. More flexible labour relations for all newstaff.

Nowadays, Greece cannot choose between pleasantand unpleasant measures. Unfortunately, the choicefor our country is between being unpleasant andeffective and (less) unpleasant and ineffective. TheGreek political system will regain the confidence ofthe public only if it shows courage by recognising itsresponsibilities and carrying out its duty towards thecountry and the Greek people.

The Greek political system willregain the confidence of thepublic only if it shows courageby recognising its responsibili-ties and carrying out its dutytowards the country and theGreek people.

Lacking central economic governance, theeurozone traded without coherence, whilesixteen member states developed at a one-

two-three speed scale rate, resulted in a viciouscircle of fragile, terrifying interdependency. TheGreek problem is a eurozone problem; and theeurozone problem is a global economy problem. Due to this, the EU is rushing to develop an eco-nomic governance system. When asked by me,the Commissioner Mr. Olli Rehn answered that"The setting up of the economic governance ofthe eurozone is a number-one priority."However, he avoided to breach the subject of aprovisional timetable for the establishment ofsuch a system. After an economic governancehas been developed, will we see the prospect ofa unified European model development. Therewon't be a case of "investing in a single mem-ber-state any more." The era of "investing inEurope" is rising.

Within this context, shipping will be of primaryimportance for a coherent European develop-ment. Continuous EU partnership is required, inorder to strengthen co-operation with itsSouthern Mediterranean partners on the optimi-sation of national support schemes and thedevelopment of common positions on regulatoryissues in the energy field. These are some of the issues I clearly pointed outwhen expressing my viewpoint on the Union forthe Mediterranean, which can only be achievedthrough the exchange of best practice and tech-nological progress from initiatives and partner-ships such as the Barcelona Process, theEuropean Neighbourhood Policy, the Euro-Maghreb Energy Community Treaty, or the MED-ENEC Project on Energy Efficiency in theConstruction Sector. Energy production is becoming increasinglyimportant in the Mediterranean area, while newkey players are emerging as far as supply anddemand are concerned. The Mediterranean hasenormous and largely untapped potential in thefield of renewable energies such as solar energy,wind energy and hydropower. This dramaticchange that is upon the Mediterranean countrieswill transform the energy market and will lead tofurther innovation in processes, technologiesand, perhaps most importantly, financial aspects. Shipping can benefit to a great extent by provid-ing accessibility and transferability of energy tothe Mediterranean world by linking source anddestination. I am certain that we have to be verykeen on this issue in the near future, as it willdetermine European energy policies at the microlevel and international energy policies at themacro level.

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BY NIKI TZAVELA

Vice-Chair Delegation for relations with the

United States Member Committee on Industry, Research

and Energy (Coordinator) Delegation to the EU-Turkey

Joint Parliamentary Committee

EUROPEAN POLICY

The Greek crisis has revealed allEU weaknesses and has con-firmed that the only achievementof the European Union -i.e. theeuro- has not been a solid one.

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ECONOMY

Greece is a small country by any standards amounting

to under 3% of the eurozone's GDP. Like many other

EU members it has had to live with the shortcomings

of an ill designed euro which has led it to accumulated

deficit, as a result of inability to manage its economy

individually via the classic tools of interest rate and

currency adjustment. Other country members have

fallen in the same trap, ending up with excessive debt

service costs.

BY DR. ALKIS JOHN CORRES, Chairman of the HellenicAssociation of Maritime Economists

The Recent Greek Experience of Financial Warfare

T This situation which has been developing forsome time has been identified as an oppor-tunity for attack. There is no secret that the dollarhas been a chronic problem for the last threeadministrations of the US and that the euro hasbeen its principal headache after manifestationsby other big international trade players that theywould prefer to keep their accumulated externaltrade balances in euro, rather than in dollars.

It was natural that the shortcomings inthe design of the euro would be seen as anopportunity to end competition between thetwo currencies. The dollar side also had the expe-rience of the "Asian tigers" saga eleven yearsago which has taught many a lesson to its finan-cial warfare generals, while the euro side wastotally inexperienced in that type of action and -as it turns out - unable to put together any worthtalking about defence. So, the case was set andGreece has been chosen as the eurozone's weak-est link due to its relatively big external deficitfinancing requirements, but also due to the pres-ence of a suitable political scene, i.e. a newlyelected government with a strong mandate torestore the country's proper function.

During the last eight weeks, or so, theentire arsenal has been put to work,starting as before in Asia, from the rating agen-cies which, one after another, have downgradedGreece's rating, ultimately declaring its bonds as"junk". The ball from the agencies went to WallStreet's hedge funds which have seen an oppor-tunity in playing along by betting on Greece'sinability to escape from the financial strangle-hold. Bets of all sort have been placed withintent to profit from this country's eventual fail-ure to roll over its debt and its subsequent bank-ruptcy, and these were followed by numberlesspress reports, expert opinions and leaks intendedto make the bets placed successful. Experiencetells us that once this defamation spiral starts towork, it does not stop until it reaches the bitter -for the country, not for those who placed thebest - end.

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tical use if the euro had gone under in the meantime,following similar requests for assistance from of othereurozone members in debt rollover trouble, adding upto trillions of euros. Under the existing regime, one ortwo big country bailouts would be sufficient to put paidto the common EU currency.

What can the EU do then? In a recently held pub-lic opinion survey in a maritime website, the majority ofopinion givers held that the best way out would be afederal - like structure in the EU, bringing together allsurplus and deficit making eurozone members andissuing its own Eurobonds and ensuring that the princi-ple of European solidarity actually works. It is widelyrecognized that the absence of such a mechanism hasresulted in the present situation. There is now evidencethat the common sense of the survey respondents isvindicated, albeit with a surprising twist. In an unusual, yet positive, display of initiative the EUhas agreed to the establishment of a mega rescue pack-age of around one trillion US dollars aspiring to stabilizethe world markets and to protect the euro from theconsequences of the so called "Greek" crisis which hasrisked repeat the global financial freeze the world hadexperienced back in 2008 as a result of the "toxic"bonds' crisis. In addition, and perhaps more important-ly, the European Central Bank has agreed to a moreactive role in the secondary bonds' market throughbuying eurozone member governments' debt. Allwould be well, if the salvation recipe had retained itsEuropean flavor. Many observers have expressed sur-prise though at the announcement that the IMF wouldbe a permanent participant in negotiations betweeneurozone country members and the two EU institu-tions, namely the ECB and the EU Commission. If youwant my personal opinion, this is something that willcreate more problems in future than it will resolve.Despite the above developments, the situation inGreece will continue giving rise to concerns as thesmooth progression of the Greek package of 110 billioneuros rests on the assumption that the burdensomepackage of IMF inspiration will finally fly. Time willshow. The good thing is that Europe has finally awakento the inherent vulnerability of its present status and tothe urgent need for progress as a means of retainingwhat it has achieved so far. Halleluiah.

The eurozone bosses finally have woken up and realized that, what appeared to bean unfortunate development in relation to one of its members, was in fact an all out attack ontheir euro. With the characteristic inefficiency of multilateral negotiations and long resistancefrom Germany, they have finally managed to assume, together with the IMF which has beenasked to join - in for unknown reasons, an amount which would give comfort to Greece whosespread had reached 1,000 points rendering the servicing of its debt ex