The Impact on Trade in Greece during pandemic.
Introduction
The shipping industry which accounts for the 90% of the trade for ensuring the steady supply of food, medicines and fuel across the world, has been facing challenges due to this pandemic as well.
There has been a decline in the calling of Chinese ports by 17%. There has been a 151,000 TEU capacity reduction because of 61 cancellation on the Asia-Europe trade route. The biggest impact of cancellations has been on Maserk, because of it’s wide exposure to container shipping and port terminals.
This company alone accounts for the 30% of the annual shipping volume in China. Los Angeles ports have seen 50 blank sailings, while the ships who never completed their journey, have been rescheduled.
Synopsis
The port is a harbinger for how the Covid episode on the planet's second biggest economy and the biggest exporter could hinder the world economy. From Singapore to Rotterdam (Europe’s largest and the world’s biggest port), there has been a sharp fall in the activity of ports.
The latest slowdown has led to a decrease in the freight prices of China-US West coast by 10%, which is a sign of weak demand according to the shipping consultancy freightos. Port workers have also been worrying about the virus which could arrive from the vessels that come from abroad.
To avoid the closure of any port the international chamber of shipping has been taking certain preventive measures.
Data and analysis on trade
All the major ports across the world have adopted a 14 day quarantine period for vessels arriving or transitioning from China (Coronavirus outbreak: Measures and preventive actions by ports, 2020). But recently, according to the port call data from the marine time analytics and insight specialist Windward, the activity levels at the Chinese ports have begun to recover from the early March.
But the seriousness of pandemic now in the US and the European countries, the shipping industry will have to contend with the falling demand there.
The stock markets don’t appear in a good condition as well. London's FTSE 100 offer list fell over 3% and there have been different decreases in the European business sectors too.
The monthly report from US Labour Department found that while there have been an addition of 273000 jobs in February, the jobless rate fell back to near a 50-year low of 3.5% (BBC News, 2020).
Shares in the travel companies again have seen some steep falls. The banks have taken a certain amount of hit as well, as the investors are anticipating that the interest rates might cut, in order to make borrowing cheaper for the consumers as well as companies, for the economy to remain afloat.
Energy firms have been kept under the pressure as well, as the oil producers need to keep the oil supply in check as the oil prices have been tumbling more than 8% after the collapse of a major proposal. The gold prices on the other hand have gone down. Gold has shed about 22% after reaching an all-time high of $2875.50 on Feb 27, 2020 (Gold price gains as coronavirus fears deepen after US travel ban, 2020).
While the corona pandemic has taken a huge toll on the world, it has affected the Eurozone the most. The composite PMI (purchasing managers index), combining the manufacturing and the service sector, has fallen to 31.6 from 51.6, which has resulted in the contraction of the activities.
Italy, one of the major economies of the Europe has been hit severely by the pandemic and has gone on a complete lock down. Likewise, France, Germany and Spain have imposed lockdowns of their own.
Greece, one of Europe’s most prestigious country with an advance income economy, an elevated expectation of living and a high caliber of life, has too been suffering like its other neighbouring countries in Europe from the corona pandemic.
The outbreak was first suspected in Greece on February 26, 2020. As of March 29, 2020, there have been 1156 confirmed cases, 53 recoveries and 38 deaths (2020 coronavirus pandemic in Greece, 2020). It had originally spread because of the people who came back from Italy and the pilgrims from Egypt and Israel.
The main affected areas in Greece have been Ilia and Attica. On 10th March, when the virus had spread to the various parts of the country and the failure of many to comply to the restrictions set by their government, the authorities had decided to suspend the operations of educational institutions at all levels and by 13th March all the other places were locked down as well.
They had quarantined few villages as well and had suspended all the services in all areas of religious worship. By the 18th and the 19th March, the government had announced a series of measures of more than 10 billion euros in order to support the economy, businesses and their employees.
The Greek authorities have already put restrictions on the travelling of its citizens and they have been required to carry their passport or ID and some type of attestation if they leave their homes for a purpose. The Hellenic police, the municipal police, the Hellinic coast monitor and the Public Straightforwardness Authority are needed to uphold the limitations and issue fines of 150 euros for every offense.
The Finance Minister Christos Staikouras, Labour Minister Yannis Vroutsis, Development and Investments Minister Adoins Georgiadis have announced a package of measure to support the economy, business and employees.
These incorporate the suspension, for a very long time, for duty and federal retirement aide commitments of enterprises that have been requested to nearby the state order, with a single condition, that they will not dismiss any worker. This measure covers about 220,000 business and 600,000 employees.
The measures also include an 800 euro stipend as well as a four month suspension of March taxes on employees of business activities of which were suspended and of the freelance professionals which have been affected by the pandemic.
The reduction in the vat taxes from 24% to 6% (2020 coronavirus pandemic in Greece, 2020) has also been announced on pharmaceutical products like:-gloves, masks and antiseptics etc.
The Finance Minister has also announced the inclusion of Greece in an emergency assets purchase programme worth 750 billion euros, launched by the European Central Bank, and has also stated that the 3.5% primary surplus target is no longer in effect for Greece, according to a Eurogroup decision.
Conclusion
On March 19th, the Prime Minister Kyriakos Mitsotakis announced the revision of the state budget to allocate more than 10 billion euros in the support of the economy on a national address to the public.
The state will also cover the beneficiaries of insurance, pension and health payments. The PM has also stated that the Easter bonus will be given in full to all employees who are in the frontline of the fight against the epidemic. The measure will affect 108,000 employees in the hospitals, the EKAB ambulance services and the country’s national public health organisation (EODY) and civil protection authorities.