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Greek Ferry Firms Facing Dire Straits, Sinking Fast

Some Greek ferry operators are at risk of being forced out of business in the months ahead, the daily newspaper Kathimerini reported, citing an annual report released Aug. 13. According to the study, prepared by XRTC, the coastal shipping sector is under strong pressure from many negative factors for a fourth straight year, sinking under the weight of the lingering Greek recession and economic crisis.
Operators are faced with a serious drop in business, approaching 15% for vehicles and 25% in passenger traffic on some route for the 2009-11 period during which harsh austerity measures were imposed on the order of international lenders, and business is even worse this year with a drop-off in tourism, they said.
The problem is being exacerbated by the high cost of fuel, which represents more than 50% of the ferries’ daily operating costs, as the government has put heavy levies on gasoline and diesel in a bid to boost revenues, but it has backfired with so many Greeks cutting back on fuel that one-fourth of the service stations in the country have closed, and businesses – such as ferries – that use large amounts are being crippled.
The government has also delayed paying subsidies for unprofitable routes, for up to eight months and is set to put a moratorium on paying all bills or expenditures except for salaries and pensions, including holding off on returning tax refunds that many businesses depend on to keep their liquidity and to buy more fuel.
Probems in Greece’s banking sector are adding to the woes. “With the country’s biggest banks choked of liquidity and using auxiliary capital, it is easily understood that additional liquidity problems arise for ferry operators, with credit becoming increasingly scarce,” XRTC’s report noted.
(Sources: Kathimerini, ANSA)

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