Greek economy kept afloat by shipping trade

MANY of the headlines about the UK and Greek economies have, perhaps understandably, painted a bleak picture of harsh financial realities in both countries.

Clearly the UK Government and the Greek administration face a period of painful fiscal tightening as they balance the books and reassure international investors.

Therefore, in this challenging period, the top performing industries in both countries must help drive recovery forward and safeguard future prosperity.

Taking Greece first (I am in Athens today, leading a City business delegation), it is shipping that has long been the globally-competitive jewel in the Greek crown. It contributed 5.7 per cent of GDP in 2009 and Greece’s fleet totals around 4,000 vessels – more than 16 per cent of the world’s carrying capacity.

Here in the UK, the City’s financial and professional services will be crucial to our economic prospects as part of a wider recovery over the coming years.

At first glance there seem to be little overlap between these two industries. But as an island state with a long seafaring history, it should come as little surprise that the UK is a world leader in maritime-related services.

The City is a one-stop shop for maritime services, able to provide all the specialist financing needs required by ship owners and operators.

In 2009, UK-based banks lent the Greek shipping sector more than $13bn, around a fifth of its total lending requirements, while the UK marine insurance sector pulled in $4.7bn in premiums and an additional $1.6bn in gross P&I premiums and ship-broking income.

It is not just finance that provides the basis for this partnership. Lloyd’s Register classifies 28 per cent of the Greek fleet and the country is currently the fourth largest market for London’s legal community.

But despite our position as the leading provider of maritime services to Greece, we can not afford to be complacent. That is why I am here at the international Posidonia shipping conference in Athens, working to strengthen links with the Greek ship-owning community and ensure key industry figures continue to see London as a second home.

I am also scheduled to hold discussions with the Greek Prime Minister, Finance Minister, and the Minister of Economy, Shipping and Competitiveness.

Even in these difficult times, Greece remains a key partner for the UK with bilateral trade currently worth nearly $3bn each year.

With both ends of this relationship facing significant economic challenges, it is in all our interests that policy makers and practitioners in both countries work together even harder to maximise trading opportunities and open doors to two-way businesses.

Nick Anstee is Lord Mayor of the City of London.