Greece is a country where history, culture and the modern economy are inextricably linked with the sea and shipping. The maritime sector is a major driver of growth, bringing income, wealth and prestige to the nation in spite of the difficult times experienced in recent years. Minister of Maritime Affairs and Insular Policy Ioannis Plakiotakis explains how the new government is helping to sustain and develop this key element of the economy
Greek shipping is already a global leader with a reputation for providing high-quality maritime services. What do you see as the sector’s main challenges going forward?
It is remarkable that in such challenging times, the reputation of the Greek shipping industry has remained virtually unaffected. This is due to the professionalism and adaptability of the industry that, with constant support from the Greek government, managed to respond to the challenges and look with optimism to the future. The government recognizes the contribution of shipping to both the national economy and the social fabric, and we aim to keep up this support through a coherent framework of measures. Right now our main priorities are recovering the Greek registry, enhancing the Greek flag with simplified bureaucracy and high-quality services, upgrading public maritime training for crews, and exploiting the country’s national ports to the benefit of the national economy. We are also focusing on areas that use alternative energy sources and we are open to any innovative idea that supports this. My own ambition is to demonstrate that Greece must play a leading role in forming the shipping agenda at a global level.
You’ve mentioned the ports. How could Greece use its busy ports as development vehicles for the country?
By utilizing the potential of ports, Greece can restart the development process and increase employment. To do this, Greek ports should increase their participation in the international transit trade, in particular through the Eastern Mediterranean Sea. They must also provide high quality services and competitive prices, and adopt modern management and administration practices. Attracting private capital and expertise is also desirable.
What is the situation of the Greek port system right now?
It is in a transitional phase following the reform of the national transportation system. There are 13 ports of international importance: Piraeus, Thessaloniki, Patras, Igoumenitsa, Kavala, Heraklion, Volos, Elefsina, Lavrio, Rafina, Corfu, Alexandroupolis and Evia Island, which operate as public limited companies. In 2016 the Hellenic Republic Asset Development Fund (HRADF) sold 67% of Pireaus Port Authority shares to the COSCO Group (China Ocean Shipping Company), giving the latter the operational rights of the port until 2052. A similar procedure was followed for the second biggest Greek port, Thessaloniki. Ten of the above mentioned ports belong to HRADF. Evaluation studies are completed and we are proceeding in international tendering procedures. We aspire to have the first international tendering procedures for the ports of Alexandroupolis, Igoumenitsa and Heraklion by 2020. Greek legislation regulates the framework for investment in these ten major Greek ports, and creates new opportunities in the sector.
For ship owners, what are the competitive advantages of flying the Greek flag?
The Greek flag is a flag of the European Union, which means among other things, a stable presence in Category Α of the International Maritime Organization (IMO) Council; a simple, operational and coherent legislative framework with competitive operational costs; a dedicated maritime administration supporting Greek ships on a 24/7 basis through the Ministry of Maritime Affairs and Insular Policy, and an extensive network of maritime attachés in the main ports around the globe that remain at the disposal of the Greek ship / crew members 24/7. Besides that, we have numerous bilateral agreements with third countries through which the vessels flying the Greek flag enjoy national/Most Favored Nation treatment in the ports of those countries, and double taxation avoidance agreements on shipping profits.
In the current political and economic scenario, what do you see as potential game-changing challenges?
Emerging and escalating trade protectionism is challenging the efficiency of the shipping sector to serve and facilitate global trade. Our guide should be the acknowledgment that efficient world trade is strongly dependent on a rules-based global trading system. Another challenge is the realistic implementation of the IMO’s initial strategy on the reduction of greenhouse gas emissions from ships. The strategy constitutes an important milestone in IMO’s efforts to achieve the appropriate international solutions for an international industry such as shipping. Over the next years, we look forward to constructive cooperation with other IMO member states and maritime stakeholders in order to realistically implement the strategy, in a way that is appropriate for different ship trades. As far as the Greek government is concerned, we are closely following international developments and adapting our strategy with a view to securing the long-term competitiveness of our maritime industry.
The new government is pushing ahead with major projects such as the approval of a revised master plan for the port of Piraeus. What can you tell us about this and other investments?
A huge investment of €611.8 million planned by the Piraeus Port Authority (PPA) will upgrade the port facilities, create thousands of new jobs and contribute to growth. This project is in the process of being implemented after overcoming significant obstacles, and it opens a new page in the excellent relations between Greece and China. At the same time, the approval of the master plan proves that our country is now friendly to investments that are both visionary and realistic and create real added value. The further development of Piraeus as the center of Greek shipping is a major priority of the Ministry of Maritime Affairs & Insular Policy. A similar procedure was followed for Thessaloniki, which is the second biggest Greek port. In 2017, the HRADF sold 67% of the Thessaloniki Port Authority’s shares to the Southeast Europe Gateway Thessaloniki (SEGT) consortium, giving the latter the operational rights until 2052. Because of its location, Thessaloniki has a strategic position in the European transportation system, serving not only Northern Greece, but also the whole Balkan Peninsula, Central Europe and the states of the Black Sea Economic Cooperation (BSEC). The investment plan is advancing swiftly and upon its completion – along with the supplementary investments in the broader area – the port of Thessaloniki will turn into a trade hub to and from the Balkan countries as well as a transport hub connecting the Balkan countries with the Mediterranean Sea.
How are you planning to enhance the attractiveness of the Greek registry?
The existing legislative framework for the registration of ocean-going vessels on the Greek register enjoys high ranking within the national legal order, as it is encoded in Article 107 of the Greek Constitution, and it guarantees the necessary stable legal environment for shipping investments. Maritime operations are also subject to a stable taxation regime. Digitization, optimization and promotion of electronic procedures to further facilitate ship and company registration is among the prime priorities for the Ministry of Maritime Affairs & Insular Policy.
How important is the human element to improving the competitiveness of Greek shipping?
The expertise and professionalism of Greek seafarers contribute to the competitiveness of sector, and the preservation and expansion of those features is also a main priority for Greece, as part of our commitment to human capital. Investing in training is a necessary requirement so that shipping can remain competitive in the global stage and the main driver of growth for Greece.
Is the government investing in training?
The modernization of maritime education is a high priority for this government, as well as the revival of the Greek seafaring tradition. The maritime know-how we possess as a nation must be preserved and there must be a sufficient number of highly trained officers. At the same time, the maritime profession, even in the lower crews, can be a way out of the high unemployment that exists in our country. In this context, a holistic plan is needed to address the weaknesses of the existing maritime education system. At the same time, we should not demonize private nautical training. Neighboring countries such as Cyprus or Bulgaria that lack our own maritime tradition and know-how, have established private Maritime Academies, and it is regrettable that Greeks choose to study there, as in Greece the Maritime Academies accept a limited number of applications and lag behind in the number of teachers and infrastructure. We have recently inaugurated the Executive Training Center of Merchant Navy (KESEN) in Macedonia, which started operating immediately, and we are renovating most of the premises of the Merchant Marine Academy of Aspropyrgos, which were damaged by the recent earthquake.
What is the government’s insular policy, considering Greece’s numerous islands and ongoing efforts to improve connectivity?
The main strategic action of the Ministry of Maritime and Insular Policy is the continuous and uninterrupted connection of the islands to the mainland. The ministry favors public service contracts awarded to maritime transport companies to meet the needs of Greece’s small and remote islands. The ministry has increased the financial resources to cover the additional operating costs of vessels from January 1, 2020 that will be awarded public contracts due to usage of new fuel types with reduced sulfur content. These contracts will be financed through a four-year Public Investment Program with €540 million in order to award multi-year contracts.
What is the new National Island Strategy (NIS 2027)?
It is based on the wider policy triangle of Maritime Economy, Blue Growth and Insularity. The New Strategy has a clear territorial dimension that includes the 18,7% of total (land) surface, and at the same time a strong social dimension focusing on the 15,1% of the Greek population that inhabits the islands. Maritime, coastal and island economies represent over 25% of national GDP. In early September we presented the main pillars of our Ministry’s development program for the islands, which incorporates a new Funding Mechanism/ Scheme for mobilizing private small investments and will offer funding tools (blended financing, loan guarantee, grants, credit guarantee and more). There will also be a pilot program financed by national and European funds to promote public investments in circular economy solutions on water management, such as seawater desalination, waste management, restoration of cultural/ touristic assets of public interest in the islands, and small-scale public works on infrastructure.
Cruise ship tourism is a growing phenomenon. What is Greece’s position on this, and on maritime tourism in general?
The Ministry of Maritime Affairs and Insular Policy aims to overcome any obstacle hindering the development of healthy entrepreneurship and competitiveness in the maritime tourism industry. As such, the work of the National Coordinating Cruise Committee will be intensified in order to achieve an immediate promotion of measures and incentives concerning infrastructure and superstructure, shipping logistics, operation of archaeological sites, traffic regulations, passport controls, navigation, waste management, water airports, home-porting targeted development, and environmental protection, so as to maximize the benefits for the Greek economy. As for the yachting sector, our priority is to introduce legislative provisions to regulate the sector. The digitization of mooring services and those provided to maritime companies of pleasure yachts, the implementation of the e-charter party application, the reduction of formalities surrounding yachts’ arrivals and departures and the acceleration and simplification of yachts’ professional registration procedure will lead to yachting’s qualitative and quantitative development.
What is the relationship between Greece and Germany in terms of maritime transportation?
Relations between the Greeks and the Germans in shipping are much older than anyone assumes, and I strongly believe that they can be further strengthened in the years to come as Greek shipping creates significant opportunities for closer cooperation in the sector. Both the Hellenic and the German parties should examine investment prospects in port development, operation and combined transport in Greece, taking into consideration the important advantages of the Greek ports.