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The effects of crisis compounded

The effects of crisis compounded
The Danish Shipowners' Association said members did not want to see any direct subsidies of their hard-hit industry nor any bending of competition rules.

The Danish Shipowners' Association said members did not want to see any direct subsidies of their hard-hit industry nor any bending of competition rules.

The Danish Shipowners' Association said members did not want to see any direct subsidies of their hard-hit industry nor any bending of competition rules that ban cartel-like activity. The remarks on Monday came after the chairman and founder of privately held French shipping company CMA CGM pleaded for authorities and banks to come to the aid of the biggest players in the European container shipping business.

'Thanks, but no thanks -- that's our response,' the Danish association's spokesman Jan Fritz Hansen said.

'Eliminating some burdens on the industry -- that is fair and square -- but where we draw the line is asking taxpayers for direct support for shipowners,' Hansen said.

CMA CGM's founder and chairman Jacques Saade 'delivered an unexpected attack on European Union regulation of the liner trades which he labelled 'penalising, irrational and unjustified'.'

Regulations set by the European Commission had compounded the effects of the economic crisis and put European shipping companies at a disadvantage to Asian rivals, Saade told French employers' organisation Medef last week, Lloyd's list said.

Brussels penalised shipowners by forbidding them to meet to discuss market conditions, freight rates and surcharges to cover increased fuel costs and port hold-ups, Saade said.

Liner shipping was earlier organised in the form of cartels called liner conferences, but the European Union decided in 2006 to ban the practice and the regulations took effect in 2008.

'The Chinese, the Koreans, the Asians in general are not subject to these regulations and have a freedom that is prejudicial to us in Europe,' Saade said.

The Monday issue of the Financial Times quoted him as saying: 'I call on the competent authorities -- banks and public bodies -- to protect the three big European maritime companies and ensure the survival of the maritime sector in Europe.'

The three big players he referred to were CMA CGM, Denmark's A.P. Moller-Maersk and Switzerland's Mediterranean Shipping Company.

The Europeans compete in world markets with Asian shippers such as South Korea's Hanjin Shipping, China's COSCO and others.

A spokesman for Maersk, whose Maersk Line is the world's biggest container shipping company, declined to comment and said the Danish Shipowners Association spoke for it in such matters.

The association's Hansen said it was important to note that European shippers also competed among themselves within Europe.

'So we do not want a distortion of competition, where the French would get a lot from their state finance system and others wouldn't,' he said.

He said that if Far East shippers were competing unfairly, the European industry should act through trade policy to change the situation.

'We are prepared to look into more trade policy matters if someone is misusing subsidies around the world rather than asking our taxpayers for subsidies,' he said.

In addition to a plunge in freight volumes and rates, some shippers have been squeezed by banks demanding that they put up extra collateral for ships being built because the value of assets has plunged.

Hansen said schemes that could help bridge the financial crisis would be acceptable to Danish shippers.

'It would be alright to look into whether in these bad times you should allow shipowners to keep up their loans without putting more capital into them,' Hansen said.

www.TurkishMaritime.com.tr

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