“Cypriot shipping remains in Cyprus and continues to support the national economy,” is the slogan of the people involved in the industry, one of the bastions of the country’s recovery fight. The Director General of the Cyprus Shipping Chamber Thomas Kazakos told IBNA that a carefully drawn and executed action plan ensured that the shipping sector managed to overcome initial operating challenges and carry on business unaffected.
Right from the beginning, after the first botched Eurogroup meeting on Cyprus on 15 March, the shipping industry turned into crisis management mode. As Mr Kazakos explained, the Chamber assumed action in coordination with the relevant authorities in order to lawfully and transparently secure sufficient liquidity for operations to continue as normal. He stressed that all obligations towards ship debts, suppliers and seafarers were covered in full by shipping companies in Cyprus, refuting reports of liquidity problems published by this agency. The fact that the Chamber kept companies updated on a daily basis also contributed to avoiding any sign of panic.
Following the reopening of the banks at the end of March, the Shipping Chamber entered Phase 2 of the action plan, the damage limitation stage. It entailed a thorough review of the shipping companies’ exposure to the banking controls. According to the organisation’s Director General, only ten out of approximately 60 large shipping companies were banking with the two banks affected.
The next phase consisted of efforts to limit the companies’ exposure to these banking restrictions, in collaboration with Cyprus’s central bank and other authorities. By the middle of July it had become fully apparent that these efforts had born fruit, as outstanding challenges had been tackled. In any case, Mr Kazakos noted, shipping companies deal mostly with specialised ship finance banks, which regrettably are absent from Cyprus.
“Shipping proved one of the sectors most prepared to deal with the consequences of the Eurogroup decisions. We may have a low-profile, but we definitely know how to handle a crisis due to our global reach and accumulative experience,” commented Mr Kazakos. He added that Cyprus is rightfully one of the top shipping countries in Europe and in the world, as it has worked long and hard to upgrade its highly competitive tonnage tax system and has the only EU approved open registry for ships by non-Europeans.
Mr Kazakos also shared his optimism about the future of the Cyprus economy in general: “Cyprus is the safest place to invest, as the tsunami has come and gone. The European pilot test with the island’s banks may have been applied in the most violent way possible, but it also produced an opportunity that should not be wasted. There are some institutional changes that would not have been implemented otherwise.”
As for shipping, he sees even better days ahead. “In 2012 shipping contributed 7% to Cyprus’s GDP, with no state funding whatsoever. We have made three policy requests that could add to that performance,” said Mr Kazakos. He was referring to suggestions for renewed efforts to lift the Turkish embargo on Cypriot ships as part of the anticipated October talks, for a more assertive promotion of the Cypriot registry and for the political upgrade of shipping through the appointment of a Shipping minister. “All suggestions have been heeded by the government, so we are hopeful,” said Thomas Kazakos.