Ladies and Gentlemen,

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1 Ladies and Gentlemen, A warm welcome to Amsterdam, the city that has proudly reopened its maritime museum just a few weeks ago. If you do find the time, do pay it a visit. It is a beautiful historical building, restored to its old glory and modernized at the same time. Is that not the way we should all move forward? For times are uncertain, indeed. According to the IMF we are navigating on stormy waters. The economic forecasts for the year ahead are lower than a couple of months ago, with large differences in growth rates between the continents. Europe s economic growth is predicted to be very moderate, the growth rate of the USA is relatively good with 2,5%, while Asia is predicted to grow at even stronger rates. The OECD speaks of global recovery surrounded by risks. One of these risks is of course the financial crisis in Europe and especially Greece. So what do we make of the decision last week of the European politicians? Is the package deal here to last or will it, as with the package deal of July this year, prove to be ineffective after just a couple of months? Much of the package deal needs to be elaborated much further and of course you all know that the devil is in the detail. But the first reactions are hopeful, for example the reactions of the banks. What strikes me is that China is invited to help Europe 1

2 out of its financial troubles. Last year in my speech for this audience I mentioned the growing importance of China for the world economy and for shipping. We can savely conclude that the role of China will even grow more. Let s all hope that the package deal provides a major break-through in the economies of especially the southern European countries and its institutions and regulations. A better budget discipline is of course part of it. The financial stability in Europe and therewith the economic prosperity is at stake. If I look at the macro-economic figures for the Netherlands, there is a considerable difference with crises we experienced before. And that is that the Dutch companies on a whole still make good profits and that the unemployment rate is relatively low. This shows that when an economy has the abilities to adjust to external shocks it can and will. The government has an important role to play in this respect, for example with the labour market regulations. But also banks have a role to play, by keeping credit lines open. Contrary to the Dutch companies on average, the profit position of shipping is poor. Of course there are exceptions but the general line is that this year will be a very important year for a number of Dutch shipowners regarding the continuity of their operations. And banks play a pivotal role also for the shipowners. We know that the world is 2

3 flooded with money but the question is: is it available to Dutch shipowners and if so under which conditions?. That s one of the questions that we will raise today: is there any credit left? In general, fewer and fewer banks choose to remain active in the shipping business. The conditions they set for shipowners, have become highly unfavourable. Three years ago, on the top of the shipping markets, banks were willing to finance up to 90% of a newbuilding. Nowadays, 40% seems to be the maximum. And other conditions are also more strict. Did we experience those setbacks before, has it always been like this in times of crisis, or are we dealing with a severe and worse then ever impact? What trends can we perceive in the shipping industry itself? We have suffered the consequences of the global economic crisis for some years now. We witnessed an increased competition on price. But we were hoping for recovery still. This year however, shows a significant drop in the utilization of capacity, too. The utilization rate index of headhaul in the container trade between Asia and Europe has dropped below 70% and the utilization of backhauls shows an even more dramatic downfall. Perhaps overcapacity is the real monster we are dealing with, not only in the container trade but also in oil tankers and dry bulk. This overcapacity reduces the value of ships rapidly. 3

4 I would like to make an appeal to all bankers present: do keep a heart for shipping! Pulling the plug on owners in trouble is no solution, to none of us. Let us explore ways to overcome this downturn. To some, exploring niche markets has proven a successful way to modernize, to mitigate risks and even to make money out of it! But if we want to compete successfully, we do need a level playing field. In global shipping markets, global rules should be set. European caps will force shipowners out of Europe and out of European flags. This threat might become a reality if an European trade emission scheme is established, as a way to reduce Green House Gasses emissions by shipping. Despite IMO-decisons to introduce a design index for new ships, the European Commission is said to still consider such a scheme for shipping. You can of course rest assured that the KVNR together with other European shipowners associations will do its utmost to prevent this from happening. If the European Commission wants to stimulate shipping, it should remove unnecessary barriers to shipping, such as customs control for intra EU-shipping. The European Commission set up a pilot project for this the Blue Belt project in which over 200 European short sea vessels participate. So the industry is ready for it. And last but not least, the IMO decision to set the limit of the sulpur content of the bunkers at 0,1% in 2015 in the SECA areas is not a wise decision. It comes too early as shipowners have too little time to 4

5 adjust. A realistic target, then we are in. We can live with the 0,1% level, but not earlier than Ladies and gentlemen, let s have some good discussions on the matters at stake today. I wish you a fruitful and lively shipfinance conference. Thank you. 5