ECONOMY

Cruise protectionism deprives Greece of half a billion euros

The Greek economy loses out on as much as 500 million euros per year due to the existing institutional framework regarding the cruise sector. The country’s legislation forbids ships that are not under a European-Union flag from boarding or disembarking at Greek ports or islands. This ban excludes the major cruise companies that are active in Europe, giving away significant amounts of possible revenues to competitors, such as the ports of Istanbul, Venice and Genoa. Despite the present adverse global conditions, Greece was the second most popular destination in Europe for taking a cruise last year after Italy, with about 4.3 million visitors, according to a report presented during the recent conference of the European Cruise Council. Its subject was the contribution of the cruise sector to the European economy. «Had it not been for the obstacle of the institutional framework, our country would have been on top in Europe, some distance ahead of Italy, enjoying the huge financial benefits,» said Greek cruise industry sources. They are emphatically in favor of lifting of the existing protectionism. On the other hand, any thoughts by the state regarding changing the law would come up against a strong reaction from the Panhellenic Seamen’s Federation (PNO), which would consider any such move by the state to put an end to the protectionism as «cause for war.» The unionists of PNO believe that the liberalization of the cruise ship sector would deal a heavy blow to Greek seafarers, so they seem set for a hard battle. Italy accounted for 23 percent of visitors in 2008, ahead of Greece with 19.6 percent and Spain with 16.6 percent. Yet despite its popularity, the cruise industry in Greece has followed a diametrically opposite course to that of Greek-owned shipping, which is shining across the globe. In 2009, with the exception of Louis Cruises, which operates seven Greek-flagged cruise ships in the Aegean, there are no Greek cruise companies. The status of protectionism that does not allow non-EU firms to perform cruises around Greece is a prohibitive measure for cruise ships wishing to visit Greece. The countries that benefit most from that are Italy, Spain and Portugal. Other findings in the report presented at the conference show that cruise passengers who visit the main ports spend an average of 106 euros per person, while, at smaller ports, their spending amounts to 57 euros per person. In 2008, cruise passengers spent a total of 2.7 billion euros, which is 65 percent higher than three years earlier. The total value of goods and services has risen by 69 percent since 2005, which amounts to 32 billion euros. Magnet Europe acts like a magnet in attracting cruise ships from North America, which, combined with the European cruise fleets, have led to a substantial rise in the number of passengers on cruises who board at European ports: a rise of 68 percent as of 2005, which amounts to 4.7 million passengers. The European cruise industry has contributed 14.2 billion euros in direct revenues, while cruise companies spend 5.1 billion euros on services, procurements and equipment. European Cruise Council (ECC) President David Dingle argued that «despite the existing financial difficulties and challenges, the ECC expects further growth in Europe. Of course, the growth rate will not be rapid, but with the operation of new cruise ships within 2009 that will mostly perform trips in Europe, we believe that passenger growth will continue.» Over the course of 2008, some 21.7 million passengers visited a European port. The number of cruise ships operating in Europe increased by 35 percent in 2008 compared with 2005, which amounts to 192 ships. In 2008, there were 42 cruise companies operating that were based in Europe and controlled 129 ships with a total capacity of 116,000 regular cabins. Europe has the leading position in the construction of cruise ships and in 2008 the cruise industry spent some 5.2 billion euros on the construction, repair and maintenance of cruisers. In Europe, the cruise industry provided employment to 311,512 people, which is 66 percent higher than in 2005. A typical cruise in Europe includes at least four destinations on any given route. Today the cruise sector is controlled by giant American-owned companies that have bought out the largest European ones. Royal Caribbean and Carnival control the biggest portion of the global market and operate cruises in Greece as well.