ATHENS: Revenues from shipping services posted a remarkable drop in July, the first full month with capital controls, as a significant number of shipping companies were forced to return revenues from chartering and ship transactions to foreign accounts in order to meet their obligations.
Bank of Greece data showed that foreign currency inflows from shipping amounted to 470.7 million euros in July, 60 percent down from the 1.17 billion euros recorded a year earlier.
Given that the vast majority of foreign currency takings concern oceangoing shipping, it is clear that the capital controls will have a profound effect on the current account balance and the liquidity of Greek banks. In fact, credit sector sources estimate that July will likely prove to be the month with the smallest decline after the imposition of the capital controls, as their maintenance and the evolution of the crisis are expected to see the drop expand further.
Capital-intensive companies such as shipping firms cannot respond to the internationally competitive environment they operate in with the required speed when they are in an economy burdened by capital controls.
