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Greece's long 'bank holiday' not impacting shipowner operations so far

Greece's long 'bank holiday' not impacting shipowner operations so far
On 29 June Greek banks and the country's stock exchange remained shut and will do so for at least a week said the government as it imposed capital controls amid fears of a Greek debt default and exit from the Euro.

The banking system was shut down after Prime Minister, Alexis Tsipras, June 27 called for a referendum to be held on July 5, which will ask the Greek people to approve or reject a package of measures suggested by the country’s creditors.

Among the measures sought by the Eurogroup is a hike in vessel tax and the abolition of outdated taxes.

But the capital controls now imposed do not seem to be directly affecting shipping companies’ operations as many in the industry have been preparing for such a situation for sometime, and transactions like charter payments and S&P disbursements, are already handled through bank accounts outside Greece. Indeed, shipping is a dollarised industry, with both income and expenditure in the US currency.

Shipping people say arrangements are being used to provide cash for local needs, such as the payment of staff, with wages transferred to employees’ accounts but they will unfortunately be unable to withdraw them.

None of the country's representative shipping bodies had commented on the situation other than say “no comment”.

George Paleokrassas, head of the Athens office of Watson Farley & Williams, believes Greek shipowners have a plan B in the event of the country leaving the eurozone. “In almost all cases, Greek shipping companies are talking about plan B and have an alternative jurisdiction to which they could move if they cannot operate in Greece,” he said.

Indeed, a number of Cyprus-based ship management companies are said to be planning visits to Greece in over the summer in a bid to woo Greek owners to set-up in Limassol.