Greek Shipping News Cuts
Week 48 - 2008


Greeks address credit crisis with wit and wisdom

---When money, shipping and the current financial crisis are discussed it does not always have to be a solemn occasion, even when weathered veterans are offering pearls of wisdom.
Such was the case when more then 300 members of the Greek shipping community packed the auditorium of the Eugenides Foundation to discuss the impact of the credit crunch on shipping.
The Greek branch of the Institute of Chartered Shipbrokers (ICS) hosted the discussion as part of its annual forum. Once the panel of bankers and owners had concluded that the crisis was here to stay and that owners might see their businesses close due to the actions of their lenders, then came the time for the open-floor discussion.
With the exception of a lively speech by financier George Xiradakis of consulting firm XRTC, the mood was solemn and in line with the serious topic under discussion.
Then owner Spyros Karnessis of European Navigation took the microphone to offer his solution to the pending question where to go from here?
OTW could hear a pin drop in the auditorium in anticipation of his rarely heard views.
Banks, Karnessis said with a trace of mischief in his voice, could just write off 50% of the loans to Greek shipowners and that "would solve a lot of problems", at which point the audience roared with laughter.
Speaker Ted Petropoulos of Petrofin interceded in an attempt to bring some perspective to the suggestion, saying it would be very unfair to ask someone to volunteer a 50% loss on their business.
"Yes," Karnessis answered, "but as long as it is not ours."
In came Captain Vassilis Constantakopoulos.
"Spyros, perhaps we could offer a deal to split profits 50-50 with the banks after the market starts to pick up again?"
Despite the grim outlook, most forum attendees left the auditorium smiling.
Published: 15:05 GMT, 27 Nov 2008 | last updated: 15:05 GMT, 27 Nov 2008

Greek owners should have the financial ability to ride out the crisis
excerpts from Newsfront Newsletter, 28 November 2008
> Greek owners should have the financial ability to ride out the crisis. The majority of them used the good times to upgrade their fleets, but in a conservative manner and will be financially sound.
However, George Provopoulos, head of the Bank of Greece, told a Piraeus Marine Club working luncheon, November 27, the future state of the market depends on the supply of tonnage. He said newbuilding cancellations will help to alleviate pressure on freight rates, until the market finds its new balance. Provopoulos also sees hope in the scrapping of more ageing ships and in the recent decision by the Chinese government to freeze licenses for the establishing of new shipyards, as well as setting stricter criteria for the approval of further expansion with respect to currently operating yards.
Provopoulos said Bank of Greece data reveals loans by domestic banks in September of 2008 were 24% up on the same month of last year. "Should the credit crisis persist for a long time, it is certain that these newbuilding programmes will be influenced," said Provopoulos.
Nevertheless, the crisis that the dry bulk market faces, combined with the recent drop in rates for tankers, pose serious questions also for the country's economy, since shipping is responsible for approx 7% of the domestic GDP.
> As shipping shares continue their roller-coaster ride, US-listed Greek companies Danaos Corp and Paragon Shipping are launching share repurchase programmes. The New York-listed container ship owner Danaos said it will buy up to 1m of its own shares, which at November 25's closing price of $4.42 could see an investment up to $4.42m. Piraeus-based, John Coustas-run Danaos owns 39 container ships and has another 31 on order. Michael Bodouroglou's Nasdaq-listed Paragon plans a $20m share buy-back programme. Paragon says it will retire the shares once it has acquired them from the open market. Bodouroglou, chairman and ceo said: "This share repurchase programme is a testament to our confidence in the long-term prospects of our business. Despite the short-term challenges in the dry bulk market, Paragon is well positioned for the future, with solid revenue and cash flow visibility and the financial strength to both execute on its operating strategy and return value to its shareholders." Paragon shares are trading at around $3.20 each.


Coral Sea master acquitted
---SSG-GOTEBORG. Kristo Laptalo, the Croatian master of the Coral Sea has by a Greek appellate felony court been acquitted from all charges of drug smuggling. Laptalo, who by a lower court was sentenced to 14 years in jail and EUR 200,000 in fines, is now free to travel home after 17 months in jail.
In its verdict, the previous court claimed that Laptalo was guilty as he as master is responsible and should have know what was in the cargo.
Lapato has all this time been supported by international shipping organisations that have completely rejected the evidence and sharply criticised the procedures in the lower court. The appellate court came to its decision to completely free Laptalo after a half-day trial and 20 minutes of deliberation.

Top ships strong but under pressure
---Fairplay International Shipping Weekly - Companies 27 Nov 2008, Company shorts

China signs Greek port deal, vows more investment
---By Daniel Flynn and Renee Maltezou
ATHENS, Nov 25 (Reuters) - Chinese President Hu Jintao vowed to increase maritime investment in Greece on Tuesday after the signing of a 3.4 billion euro ($4.4 billion) deal to run the country's largest port, despite protests from dockers.
Hu and Greek Prime Minister Costas Karamanlis witnessed the signing of the contract by state-controlled China Ocean Shipping Company (Cosco) to operate the container port of Piraeus (OLP) for 35 years, part of Greece's privatisation agenda.
"Our priorities are to widen our economic cooperation ... to strengthen maritime cooperation and investments," the Chinese leader told journalists, during a three-day state visit.
Greece controls one fifth of the world's merchant fleet. Its ship owners have profited from a huge boom in demand for iron ore, oil and grain from China in recent years, and they are the largest clients for Chinese shipbuilding yards.
Until a collapse in freight rates earlier this year, the boom helped Greece's economy grow by 4 percent a year for a decade.
"The agreement between OLP and Cosco signals a new important chapter," said Greek Prime Minister Costas Karamanlis. "Greek ports can become transit points for Chinese goods to the EU and southeast Europe, as well as the Mediterranean."
Several hundred dockworkers, carrying a banner reading "Cosco Go Home" and waving black flags, marched past the Greek parliament before the signing, saying the deal would mean job losses and tougher labour conditions.
"They must not sell the ports. OLP is a profitable business ... it doesn't make sense," said Manolis Gemeliaris, 54, an engineer at the port. "When Cosco comes, we will lose our jobs."
The Chinese company has insisted that it will create 1,000 new jobs at the port for Greek workers and more than double its capacity by 2015.
Hu, who toured the ancient temples of the Acropolis in central Athens with his wife on Tuesday, has insisted during his visit that China's economy is still experiencing "significant growth" and he would cooperate with international efforts to tackle the global economic downturn.
However, the World Bank said in a report published Tuesday that China's economic growth would slow to 7.5 percent next year, its lowest rate since 1990, despite a 4 trillion yuan ($586 billion) stimulus package.
Despite the opposition of Greece's restive unions, the conservative government is pressing ahead with privatisations and has put loss-making Olympic Airlines on the block.
The ruling New Democracy party, whose parliamentary majority was cut to one seat this month by the expulsion of a rebel deputy, has fallen behind in opinion polls for the first time since winning power in 2004 amid discontent at its economic policies. Many analysts expect an early election next year, ahead of a 2011 deadline. (Editing by Richard Williams)
Source:, * Reuters, Tuesday November 25 2008

Ports, OA debated in Parliament
---Abandoning reforms would be an immense strategic mistake, Prime Minister Costas Karamanlis warned on Friday, replying to a tabled question in Parliament by Radical Left Coalition (SYRIZA) deputy Fotis Kouvelis regarding ailing national carrier Olympic Airways (OA) and the country's major ports.
"We are carrying on with reforms at a more intensive pace. Abandonment of reforms -- and indeed at this stage -- would constitute an immense strategic mistake at the expense of the country. And we will not make that mistake," Karamanlis said.
Particularly regarding the container port of Piraeus, Karamanlis stressed the contract for a concession of its container terminal to Cosco Pacific Ltd, signed earlier in the week during Chinese President Hu Jintao's visit in Greece, was of decisive importance.
"It is the biggest and perhaps the only investment of such a magnitude to take place internationally amidst the global financial crisis," Karamanlis stressed.
The 35-year contract, he added, marked a new chapter in bilateral cooperation with a major economic power, enhances Greece's political standing, strengthens the Greek economy in sectors that are hard-hit in this present juncture, and was a landmark in Greece's evolution into a bridge between East and West, Karamanlis underlined, adding that Greece has only benefits to gain from it.
"The start that was made with the ports will have continuity and prospects for our country," he said.
Regarding OA, Karamanlis pointed to European Commission vice-president and Transport Commissioner Antonio Tajani's recent statement, namely, that the Greek government's plan for OA could serve as a model for other European airlines, adding that the benefits to Greek taxpayers would exceed 500 million euros annually.
"Whoever truly cares about solid policies for social protection assumes the cost for generating the necessary resources," Karamanlis said. "Preservation of the past and seeking a better future do not go hand in hand. The exercise of a real social policy demands, first of all, responsible and bold decisions. Everyone is obliged to make his choices," the premier added.
Kouvelis said that OA and the ports of Piraeus and Thessaloniki were of strategic importance, and that the country's gateways in the air and sea could not be handed over to private concerns. He criticised the government of selling off a state asset at the ports "without provision of efficient terms of supervision ..." and of allowing the creation of a monopoly when, in other European ports, there are more than two service providers.
Referring to debt-ridden OA, Kouvelis said the government was going ahead with an "easy solution of privatisation", without keeping in mind the fact that Greece is a major tourism destination; that expatriate Greeks prefer OA to other airlines; that OA has devoted passengers and is one of the safest airlines worldwide.

Genmar to appeal magic pipe convictions
---Thursday, 27 November 2008. A US federal court has convicted General Maritime Management Portugal, a subsidiary of US-based tanker company General Maritime (Genmar) and two of its engineer officers of oil record book offences. Genmar says its will appeal against the convictions. The company and the chief and first engineers of the aframax tanker Genmar were found guilty by a jury in Corpus Christi, Texas, on two counts of violating the Act to Prevent Pollution from Ships and 18 USC 1001.
On the first count, the jury found that the two vessel officers violated the Act to Prevent Pollution from Ships by failing to maintain an accurate oil record book for the Genmar Defiance. On the second count, the jury found that the two vessel officers violated 18 USC 1001 by presenting a materially false oil record book for the Genmar Defiance to the U.S. Coast Guard on November 28, 2007. On each count, the jury held GMM Portugal vicariously liable for the acts of the two vessel officers, as it determined these crew members were acting within the scope of their employment and for the benefit of GMM Portugal when they presented the oil record book to the US Coast Guard with entries that they knew to be false. GMM Portugal and the two vessel officers are scheduled to be sentenced on February 10, 2009. Genmar says it believes that GMM Portugal faces a maximum fine of US$1m and a maximum term of probation of five years.

Greece Takes Measures against Fuel Smuggling
---11/25/2008 (
By Ioannis Michaletos*
The following exclusive report from Athens, by longtime contributor Ioannis Michaletos, analyzes new Greek government initiatives in countering pervasive fuel smuggling- and how deeply entrenched this practice is with other kinds of organized crime in Greece and the Balkans.
With annual revenues generated from illegal fuel smuggling in Greece reaching a staggering 3 billion euros, the trade has numerous ramifications, including the degradation of competition in the domestic market, the expansion of illegal activities in neighboring countries and the intrusion of organized crime syndicates in the energy sector.
Operation Poseidon
The action plan was developed by the Greek ministry of national economy, which is in dire need of capital. The plan involves techniques centered on the monitoring of the fuel trade in the country, so as to isolate instances of smuggling as they occur.
The financing of this project (further information, in Greek, can be found here) will be jointly shared by this Greek ministry and by the European Union. Further, according to information that is not yet verified, the Greek National Intelligence Service (NIS) will also provide know-how regarding the electronic monitoring of the smuggling networks.
Finally, the important port of Piraeus near Athens will in the near future get a Command & Control Center, from where the movements of every ship carrying fuel within the port zone can be monitored 24 hours a day.
This center will also be able to merge all electronic information being gathered via sensors in all vessels and fuel transport vehicles across the entire Greek territory. Sensors will be also placed in the taps of every unit that either carries or stores fuel. Thus, every time a transaction takes place, the center will be able to verify the quantity of the commodity that was either extracted or pumped in.
The Backlash
Fuel smuggling is an activity that spans a variety of sectors, like the ports communities, crime syndicates and of course, the legal energy sector. Therefore the recent measures by the Greek administration have already started to arouse certain backlashes from those with vested interests.
Information has been provided by industry and political experts that indicate concern from some in the political opposition- influential figures who have much to lose in case a crackdown begins on a wider scale. The fragile political climate in Athens, and the possibility of yet another general election by early spring tends to confirm the above assessments.
On the other hand, the determination of the government to gain considerable and much needed taxes in light of the world economic crisis, and the pressure by multinationals that are aghast by the present situation in Greece, are factors indicative of a likely vigorous execution of the law enforcement crackdown on smuggling.
A Shadow Trade
Greece, being a major shipping country, is also one of the main markets for contraband shipping fuel. According to existing regulations, the oil for ships must cost one-third the price of home heating oil.
Now, what is actually happening is the fake transfer of oil to ships that in reality gets into the housing and automotive oil market, providing huge profit margins for the smugglers.
There several methods used by smugglers, who have developed a sophisticated criminal infrastructure to sustain their activities. First, they construct a series of illegal depots, near the main ports and metropolitan centers, where the shipping oil they purchase can be stored. Afterwards, they use chemical variants to destroy the substance that differentiate marine oil from housing oil. The final stage is the transfer of the product to the market, thus making a great profit by avoiding taxes.
A second popular method of smuggling fuel is the purchase of excess amount of oil by maritime companies, or by the owners of individual boats. The oil is then transferred on shore via small oil tankers, and placed in the illegal depots; from there it finds its way onto the legal market.
All in all, there are countless methods for clever smugglers to find to divert fuel resources for illicit profit. And they are apt students when it comes to innovation and evasion of the authorities. In this case, the involvement of state officials and energy managers is paramount.
Regional Ramifications
Corruption in the Greek fuel market is also entangled with the wider Southeastern European one, creating a web of shadowy interrelated crime groups in the region. In countries such as Albania, Montenegro, and others; the smugglers create front companies that officially import fuel from Greece- fuel that never actually reaches them, but which is instead kept in Greece to supply the domestic market.
According to reports created by the Greek ministry of national economy, such exports are non-existent and in many cases the fuel shipment is either changed with another commodity (i.e., from oil to water) or mixed heavily with other substances, and a significant quantity again remain in Greece. The involvement of customs official seems certain, since all export shipments are routinely checked, though very few smuggling cases have ever been revealed.
Since Southeastern Europe is characterized by a corrupted public sector and lax financial controls, the Greek smugglers have great interest to expand in these states. Further, Greek-owned front companies are being used to conduct illegal trade between Balkan states, and there are indications that they have expanded their activities in the Black Sea states as well.
The annual turnover of this activity has not been assessed by any organization, but it is estimated that it numbers hundreds of millions of euros per annum.
The Nexus of Energy Smuggling and Organized Crime
The existence of a business climate in the region that hinders lawful investments and competition means heavy costs for local economies, despite the huge earnings of the small number of people involved in smuggling.
Panos Kostakos, an analyst on international organized crime networks and academic at Bath University in England provides several clues on the overall situation regarding fuel smuggling and its wider impact.
From the foregoing, it becomes clear that fuel smuggling is a little-mentioned but very lucrative part of the larger Greek, and Balkan organized crime sphere of activities, and that it has necessary relations with legitimate businessmen, politicians and state agencies. Further, though it is an illegal activity, fuel smuggling carries none of the social stigma with it that results in a public outcry- such as murder, arson, drugs or prostitution trafficking, etc. It is relatively easy for fuel smugglers to slip under the radar.
*Frequent contributor Ioannis Michaletos is a Balkan security analyst for the RIEAS Institute in Athens, Greece. He is also Southeastern European Coordinator and Editor for the World Security Network Foundation.

Athens, 24 November 2008
Mr. K. Papoulias:
Ladies and Gentlemen, it is a great pleasure to welcome the President of China Mr. Hu Jintao, his wife and the Chinese delegation to Athens today. And I would like to congratulate them on the very successful Beijing Olympic Games.
First of all, I would like to stress that our relationship is not just a relationship of friendship and cooperation, but something more. It is a strategic relationship.
This state visit in such a short amount of time after our own visit to Beijing is a precise indication of the dynamic in our bilateral relations.
Our discussions covered issues of international and bilateral interest.
We discussed the ongoing crisis in the Middle East, which has been tormenting humanity for more than a century having a high cost in human lives and causing great suffering and enormous material damage.
We hope that the change in leadership in the United States will contribute to a new, more fruitful policy that will bring a new dynamic to cooperation policies.
I mentioned the role of the European Union on the world stage and I stressed my belief that it will continue to play an even more dynamic, more meaningful role, becoming a force for stability around the world and for a more human-centered approach to problems.
We also supported the entry of Western Balkan countries into the European Union on condition that they fulfill the necessary conditions.
We talked about the international economic crisis, its causes, and the need for a new economic context that will not result in the same circumstances which bred this crisis.
We will continue our discussion with our friend, the President, tonight over dinner.
We give him a warm welcome to our country and wish him a pleasant stay.
Dear friends journalists,
Ladies and Gentlemen,
As Mr. President said, we had a friendly and constructive discussion earlier. We exchanged views on issues of bilateral relations and international regional issues of common interest, and reached common conclusions.
Both sides agree that since the establishment of diplomatic relations 36 years ago, our bilateral relations have been developing normally. Particularly in 2006, the two countries established a comprehensive strategic partnership. Bilateral cooperation across sectors has developed considerably, and we are particularly satisfied with this.
During our discussion, we also exchanged views about the current financial crisis. Both sides agreed that in this crucial juncture, states around the world should bolster their coordination and their close relationship in order to address this crisis.
Both sides agree that our two countries are at an important stage in their development, at a time when the international political and economic situation is complex and variable. Our two countries should strengthen their cooperation in all these sectors.
In particular:
1) We should strengthen our friendship and the policy of mutual trust between the two countries, maintaining contacts, strengthening dialogue and cooperation between governments, parliaments, and political parties.
2) We should open up new areas of cooperation and strengthen our cooperation in traditional fields. At the same time, we should encourage communication and reciprocal business investments, upgrade the quality and level of our cooperation in the shipping sector, and promote our bilateral cooperation in emerging sectors, such as energy, environmental protection, tourism, etc. We should also pave the way to cooperation in new areas.
4) We should intensify our cooperation at multilateral level and jointly promote smooth development.
I would like to reiterate that China pays particular importance to our bilateral relations and it is willing to continuously promote, together with the Greek side, the continuous strategic partnership between Greece and China and upgrade it to the mutual benefit of our peoples.
In closing, I would like to thank Mr. President, the Greek government, and the Greek people once again for their warm and friendly welcome. Thank you.

The Ship Management Conference - February 2009, Athens, Greece
Throughout the 2 days the agenda will discuss the latest challenges and developments in this rapidly changing and growing sector of the industry.
Speakers Included:
Andreas Droussiotis, CEO, Bernhard Schulte Shipmanagement
Jans Morten Eskilt, Chairman, OSM Group
Efstathios Gourdomichalis, Managing Director, G Bros Maritime
Harry Vafias, Founder, President and Chief Executive Officer, StealthGas INC
Philippos Philis, Managing Director, Lemissoler Shipping Group
To get additional information on the program, the price and the discount, please contact directly Justyna Korfanty of ACI on +44 207 981 2503 or send her an email at
More info:
Source: Email Announcement