Newsroom Blog
HEDGE funds can short entire countries and not just single companies, as Britain, Thailand, Indonesia and South Korea all found out the hard way in the 1990s. Now, if recent volatility in credit default swaps is anything to go by, Greece could be due for the same treatment.
The Papandreou administration is reassuring anyone who will listen that sovereign default is out of the question. But markets have priced in the risk and some players are actively betting on such an outcome.
Other than out of patriotism, should Greek shipowners be particularly bothered? Such is the nature of globalised industry that it is possible to rake in the cash even as the domestic economy falls to pieces.
The sector has weathered recent turbulence in the world economy relatively well. True, the Greek-owned fleet lost 2% of its capacity last year, and Bank of Greece figures for January-November point to a 31% fall in gross transport receipts in the country’s services balance, which mostly equates to shipping. But considering just how poor 2009 was for dry bulk, it was actually a pretty credible performance.
It is the big picture that remains most worrying. Social unrest and austerity do not make countries attractive places from which to do business, even if they are home sweet home. The next few months may see troubled times for Europe’s top shipping centre.
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