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Back Βρίσκεστε εδώ: ΑΡΧΙΚΗ Conference Conference 2018: The Global Impact of Shipping Dr Avgouleas at TheSeaNation Shipping Conference

Dr Avgouleas at TheSeaNation Shipping Conference

AVGOULEAS EM

Καλό σας μεσημέρι. Ευχαριστώ για την πρόσκληση το Ίδρυμα και τον κ. Γιώργο Σκορδίλη. Η τελευταία φορά που ήμουν εδώ ήταν μαζί με έναν πολύ μεγάλο επιστήμονα και Νομπελίστα ο οποίος πέθανε το σαββατοκύριακο, πέρασε στην αθανασία, τον Sir John Sulston, στο συνέδριο που έκανε το Πανεπιστήμιο του Μάντσεστερ με το Ίδρυμα και τον πρόεδρο του Ιδρύματος τον κ. Ευγενίδη πρασινίζοντας την ανθρωπότητα το 2010 όταν δεν μιλούσε κανένας γι’ αυτά τα πράγματα ακόμη. Αποτίω, λοιπόν, από του βήματος αυτού φόρο τιμής ειδικά στην ομιλία του John Sulston, εκείνη τη μνημειώδη ομιλία τον Οκτώβρη του 2010. Θα μιλήσω στα αγγλικά διότι...

ΟΜΙΛΗΤΗΣ: Αιμίλιε, παίρνω την ευκαιρία, και δεν συνηθίζεται αυτό, θα αναρτήσουμε στο Ίδρυμα Ευγενίδου στο πρώτο της ιστοσελίδας μας στη μνήμη του Sulston αυτήν την πραγματικά μνημειώδη ομιλία του. Αξίζει να την ακούσουν τα παιδιά μας. Τίποτα άλλο.

ΑΙΜ. ΑΥΓΟΥΛΕΑΣ: Και για όσους δεν ξέρουν για ποιον μιλάμε, ο John Sulston έλαβε το βραβείο Νόμπελ Ιατρικής και Φυσιολογίας του 2001 διότι ανακάλυψε τη σύνθεση του έλικα του DNA, δηλαδή όλες οι γονιδιακές θεραπείες που έχουμε σήμερα για τα αυτοάνοσα και τις θεραπείες εναντίον του Καρκίνου οφείλονται στην έρευνα του John Sulston ο οποίος πέθανε ένας πολύ ταπεινός και φτωχός επιστήμονας και όχι δισεκατομμυριούχος όπως όλοι οι συνάδελφοί του στον ίδιο τομέα έρευνας.

To begin with, somebody like me who comes from law and finance, from global finance, can easily feel as an intruder in a conference like this given...setting aside my most important property which is my national identity, so I am entitled to speak about shipping and shipping finance because I am Greek above all. But that is not enough. So in thinking about my presentation for this distinguished workshop, I put together things that I assume that I know well, which is global finance, transformation of global finance in Greece.

But the two previous speakers, the Chairman and the previous speaker added a few more things which you can easily find in my presentation.

Greek shipping has to be a competitive global business that also means Greek ship finances. I will show you Greek shipping firms need the right form of finance power shifting to Asia, Greek ship finances on the slide consistent growth which shows to us that we can trust the entrepreneurial skills of Greek ship owners.

The Greeks have to remain competitive. Ship finance is all about risk sharing, risk was not priced properly; nobody wants to really provide cheap loans or cheap funding to shipping companies any longer because they burned their fingers. And what the Chairman said. We became a shipping nation because we always wanted to go further.

And this is what we have, putting all that in the mix and identifying slightly closer the situation that we have with bank finance for shipping.

Today what we have is A, shipping risk was not priced properly, as a result people ... (ΠΡΟΒΛΗΜΑ ΗΧΟΥ) of losing serious money, specifically the German banks. And serious contemporary regulatory restrictions on the kind of long-term lending and long-term finance the shipping firms need.

Why? Because long-term assets are penalised under the Bassle III+ framework and because under the new liquidity measures under Bassle the net-stable funding SEO and the liquidity cover SEO, you need to have 100% cover for anything that you lend out, anything above 5 years becomes extremely expensive, essentially you are borrowing to lend.

As a result, all European corporate lending that is sourced from banks, clusters around the 5 years bend rack, and of course the securitisation’s market has been revived and revamped but it is so vis-a-vis standardised products and it is very hard to see how you can standardise shipping bonds with ships as collateral. They do not fit the long-term value models.

And of course as we all know, apart from all the other evils that have befallen our country in the past ten years and the other evils that befell our country in the previous 20 years that led to the collapse in the past 10 years, we have suffered a massive fall in public and private investment and of course total diminition of the capital stock of the country, the capital assets.

And here is an industry that is inherently risky but it is also an industry where the Greek nation has an inherent competitive advantage. Can you combine the two and how can you do that, especially shipping, even though may be a guide by some as an unappealing career, even though I wonder why. In general, it is a steady source of employment and a very stable career path for the Greek you which suffers from record unemployment levels right now.

So, how can we combine the needs of the country with the needs of the national shipping industry for more finance? So, the first thing that you do if you have studied basic Economics is looking at the economic theory. And there are two theories in Economics and endogenous Growth Theory which says that you invest, if you invest in human capital innovation, knowledge, you can significantly contribute to economic growth and shipping these days is not just ships, it is also human capital innovation knowledge, strategic trade theory.

And if we take, obviously I have not, I am not going to expose the model, but if we take subsidies out of the strategic trade theory game and we add stable source of funding, the results are the same, steady growth in the country’s GDP and obviously economies of scale all over the place.

How do you do that? Well, the first thing that I said is that global finance undergoes radical transformation through ... technology and democratisation of access to finance. So, basically you need to move to mixed financing models which combine a state actor that will take a strategic small equity stake.

You need some kind of a national development bank that will take the residual risk and then you start discussing with the global bond markets and your local crowd funders who of course, because we talk about shipping, they will not get benefits, they will not get shares, their tokens will equal preference shares which means a fixed pay-off year in and year out.

Now, what are the benefits of that? First of all, let’s look at the challenges. Should we trust the shipping industry given also that many people question the corporate government’s practices? Well, why not? If we move away from the 70s, the famous ship loans, or θαλασσοδάνεια, and the first case that you learn when you study contract law in Britain is the famous Kolokotronis Case which is a θαλασσοδάνειο, so, if we move away from that period, Greek shipping was financed on the basis of social networks. And was entrepreneurial activity shared by either the ship owner’s village or the remote family or his employees and so on. Half of my own family became ship owners by being captains once upon a time in the Trakos Corporation. So one wonders what we mean by corporate governments.

Because if we mean sharing risks and sharing benefits, this family-oriented closed structure of governing Greek shipping companies has paid dividence throughout the centuries for the Greek economy and Greek society which is what concerns me, one of the goals of the model is to move away from the big massive global capital markets where shipping asset always competes with another asset and you are always going to face a problem in international trade and that at the same time some fad, some bubble that will make the competing asset more interesting and better priced.

So, is there a way about that, is there a way, the way is of course to create a mixed funding system that is going to be much more pluralistic than today. Can you entrust public money to the Greek ship owners?

Well, constant growth in the face of massive adversity. Why not? If you can fix the government’s framework in a way that works for all stake-holders, why you cannot trust them? Because the Wall Street Journal says so? It is a totally different model of funding, totally unsuitable for this high risk, high reward extreme high volatility industry.

Let’s move on, transparency. Well, do private equity funds have lots of transparency? The rational of... from buying a listed from taking it private is exactly in order to avoid transparency and scrutiny from the capital markets because that creates volatility and impedes long-time investment and long-time investment programmes and plans.

So, there is a way, and I believe it can work provided that all stake holders including the government of the day can understand that the country needs rapid replenishment of its capital asset stock and the best way to do that is to become a partner or encourage a Greek ... to become a partner in ship finance operations as was the case between the 1770s when the first Greek fleets conquered the Aegean and the Mediterranean because of the Russian-Turkish wars, until the late 1970s. Thank you very much.

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