On a summery yet rainy day, in a café at Holland Park, just a few minutes away from the Greek Embassy, I had the pleasure to meet Mr John Faraclas, a Greek consultant, writer and analyst in maritime affairs, with long experience as a shipbroker. Mr Faraclas talked to Nouse about the shipping industry, Greek politics and the financial crisis.
A must read interview which looks into areas which are rarely reported from the perspective of one of the ‘titans’ of the industry.
In one of your articles in 1987, you mentioned that ‘if Greece was properly administrated and certain laws were in place, vis-a-vis deposits in Greek banks from the shipping companies, Greece would have been able to lend money to other countries. Despite the fact that Greece is the leading country in shipping, we were not able to do something like that. On the contrary in recent years we have been borrowing. In that sense do you think the problem is political in nature, or is it a banking problem?
It is firstly political and conversely banking. As you can see there were very few Greek banks that were lending money to the shipping industry all these years, the exceptions being the National Bank of Greece, Alpha Bank, the Bank of Piraeus, the Commercial Bank of Greece, etc. and there has been a major problem.
The problem stems to the fact that the Greek politicians envy the Greek ship-owners and they only want them to have their support during the election campaign time and to invite them on their yachts. It is unfortunately something that we as a nation should feel ashamed; that we have been governed by business hooligans, the politicians. I haven’t seen any proper Greek mind to come down and run as a politician, with the exception of very few men and very very few women, it has been a mess.
The political issue is that the loans were favouring the protégé of ship-owners and that was creating a problem. The laws governing the ship finance in Greece were crazy. It was the foreign banks that came en mass and financed the Greek ship-owners. So my question is ‘how come the foreign banks trusted the Greek ship-owners and not the Greek banks?’. It is ridiculous! Of course the political issue is that if the Greek banks had understood their mistakes, they would have seen that the mortgages of the ships belong to foreign banks, because the contractual owner is a foreign bank and not a Greek bank. It should have been a great advantage for us to have the mortgages under the Greek mortgage law, so as to be the contractual owners of the ships.
In one of your other article entitled; ‘Greece: should the shit hit the fan’ you mentioned that ‘politicians and people in power from abroad offer anti-Greek assistance, the enemies of Greece continue to destroy steadily and slowly, from the mid 70s in particular, the country in all fronts’. Do you want to elaborate on this?
I’ll take it from the shipping industry first. As you know, the war (WWII) and also the Greek civil war, (where both sides committed crimes, because they couldn’t see further than their nose), was a strategy to diminish Greece as the winning power. Greece as you know in Yalta, through His Beatitude Archbishop Damaskinos, who was the Regent at the time, asked for five things to happen, and now these are important for the shipping industry; (1) Cyprus and unification with Greece, (2) Northern Epirus, southern Albania, to be unified with Greece, (3) the narrow strip in Southern Bulgaria, south of the river Ardas, today’s Philipoupoli to become Greek, (4) Constantinople and the entire Eastern Thrace and (5) the Dodecanese. Only the last, the Dodecanese were given to Greece because the Russians (Soviets at the time) didn’t object, so the Americans and the British “accepted” this…
We have been governed by business hooligans, the politicians
After this civil war the Niarchos family took over the Hellenic shipyards, which belonged to the Greek Navy. This is important to know this, of who was the owner of these shipyards, which become the biggest in Eastern Mediterranea and one of the biggest in the world. The shipyards flourished. There were ships and non-commercial ships, like floating rigs and platforms for the extraction of oil, sugar factories sections for the sugar factory of Greece etc. It was a shipyard for shipbuilding, a ship repair yard and a naval yard to repair any sort of floating object and also repair for Greece’s Royal Navy ships. The Americans used them to repair all their Naval vessels of the 6th fleet! Then my uncle, the late Professor Andreades decided to break the monopoly of Niarchos and created the Elefsis shipyards. In 1972, according to Admiral Sakelariou in his famous books about shipbuilding industry in Greece, 6.098 workers were working for the Hellenic shipyards in Greece. At the same time when Andreades created the Elefsis shipyards, 2.700 workers were employed. Then another ship-owner, Goulandris took over the Neorion shipyards and claimed to give an impetus and life to these shipyards, the first in modern Greece. Then in Khalkis, my compatriot from Kardamila of Chios, John Carras, created the Khalkis shipyards. So Greece was flourishing until the end of the governance by Nea Dimocratia, or when PASOK came to power, if we want to say so. We could build big bulk-carriers, tankers, chemical tankers, you name it! The country had 25,000 workers in the shipbuilding, shiprepair and ship conversion sectors. It was a great success of the Greeks.
The only problem was that none ever thought to create heavy industry and manufacture the main engines of the ships and other parts in Greece. That would have been the main boom of Greece and today we would have been the masters of the seven oceans, the masters of the shipbuiliding industry. However there is an oxymoron here; the war is over but we have to clear out things, how come you evaluate a system whereas the three losers of World War II, namely Italy, Japan and Germany have their shipbuilding industries flourishing, and why not that of Greece or Great Britain? Of course the British problem was that late Ms Thatcher (Lady Thatcher) “accepted” the call “to go” to the Far East and she failed and closed the shipyards over here. But Greece was not Great Britain. It is a myth that today the Greeks cannot build ships and the fact that it has been said to be more expensive is nonsense because the Japanese worker is three times more expensive than the Greek.
Today as you recall and can see from historical evidence, we have build the same designs that they used to build in Great Britain, for example the SD 14- the 15,000 tonne vessel that replaced the Liberty type of vessel that of the WWII, which was a 10,000-tonner, the SD-14 is the Standard Design, and it replaced the Liberty; it was designed as an idea by Greek shipowners in London, built in the UK and then (later) built in the Hellenic Shipyards (the famous Skaramanga Yard) and also in Brazil… Both were Greek ideas and you can see from the inception of these plans that the first shipowner was John Carras who built over a dozen of these ships in Japan known as the Freedom Ships in IHI (the Freedom type was the reply to UK’s SD14 vessel), and others followed suit. The greatest advantage of the Greek workforce in the shipyards was that they have worked firstly on ships and then ashore and they created the best designs and constructed the best ships you can imagine. That helped tremendously the correction and the result was super ships!
So we have the politicians who sold Greece away, this is a ridiculous thing particularly after the fall of the military regime.
Lots of experts seem to be optimistic about the recent performance of the shipping market; do you think that a recovery is arguable and justified or is the market still frozen and there’s no room for optimism?
I believe in the maxim “learn to swim alone”. Today despite the argument that there is an overcapacity of ships because every Tom, Dick and Harry managed to find money and build ships, so everyone is killing himself about who is going to charter the vessel. What are the facts? Well the fact is that today there are 9.2bn tonnes of cargo to be carried; in 2000 that was 7bn tonnes and in 1950 there was a 0.5bn tonnes of cargoes to be carried. So there is plentiful of cargo and the best of the best shipowners have a good position, a good rapport with the charters and are able to fix the vessels. The market will never ever see the levels reached in 2008 when in May 2008 it reached 11,747 points at the Baltic Dry Index (the BDI) and today it is close to the 800 points, it even went down to 662 and then to 647 in 2008 and 2012 respectively.
The market has suffered, because of the competition of the banks, especially the British and German banks in particular which went on and on to finance ships and now are in tatters. Now for me, this is the best market to finance ships, also because the market is very low to build ships and when the market peaks up there would be some handsome capital gains.
There is another thing though that nobody addresses. The shipping industry of the industrialised countries, the G7, and the non-G7. These are also the former colonial powers… Now take for example that Greece is not anymore a superpower, but has the ability, because the Greek shipowner is the real master of the game. He knows how to navigate, to have the best relationships, he’s a leader, and if as according to Plato’s Republic, the philosopher becomes king and the king philosopher, we would run the world today far better. And I am coming back to your first questions; yes I said that in 1987, because we could have had lots of money in Greece, because at that time only the allotments for the seafarers and expenses occurred in Greece used to go to Greece. There would have been billions of dollars these days, but nobody could trust Mr Andreas Papandreou and his PASOK, nor of course Nea Dimokratia (New Democracy party-(centre-right). People should understand that it was the regime of the colonels in 1967 that made law 89, which brought the ships to the Greek flag, gave work to the greek seafarers in principal and pushed away the so called ‘flags of convenience’. I don’t call them the flags of convenience; I call them “flags of necessity”!
Coming to the Greek economy now, do you think that the IMF was the most proper authority to deal with the Greek financial crisis, or should we have tackled the problem in a different way? And is the crisis economic or political?
It is a political issue, because there was scam. If you cannot win a war against a nation military, you destroy that country and its economy. So they did all these acts of treason, the business hooligans, the Greek politicians and their cronies from all sectors of greek life, they (European and other lenders) gave them the money and see what has happened. Nobody talks! And here we have to stand up and say, nobody likes military regimes of course, but what have they done since 1974, exactly 40 years today, for the Greek economy? Don’t forget that between 1953 and 1974 one dollar was between 25 and 28 drachmas. A very powerful currency and the foreign tourists found a hard currency when they came. Now, any Tom, Dick and Harry have their dollars and come to Greece to make a show-off. No, that’s not on! How this calculation has happened in Greece, that one euro is 343 point something drachmae? I like this point something. You can imagine the scam. There is a big scam against Greece. Again, now all of a sudden we go for oil at the Ionian sea, come on, of course we know there is oil there, of course we know there is oil at the Aegean sea.
The politicians who sold Greece away
Coming to this, with regards to the ‘Offshore Licensing Round’ and the event that took place a couple of weeks ago, at the Hellenic Centre here in London, I was wondering what your view is about natural resources. Do you think natural resources would prove to be a gift or a curse for Greece?
Both. It’s a curse because everybody now envies us, everybody wants to invade us and take this wealth away, and everybody wants to participate and share all this. But overall if Greece follows the Norwegian example to extract oil, natural resources and gas, it can create a fund for the pensioners of the future and the country will flourish. We have oil, and I have been very tough and provocative in my articles in the past on the All About Shipping site, because we have oil, in fact we have enough oil to export and to pay any debt, but “We owe nothing to no one!”
They knew, the foreigners knew and the IMF made a grave mistake; the mistake started with Strauss Kahn and it continued with the lovely lady from France too, Ms Lagarde. They are one of the same kind. I can tell you now that there are some hints in the press that they have done some mistakes, mistakes paid by the Greek taxpayers and workers, and hold your breath, from pensioners who have suffered and suffer! For example my mother, who is 92 years old, saw her pension deducted by 972 euros – my father was a captain in the merchant navy and if he was around he would have scream and shout to all these bastards! I talk like this because if you see in some of my interviews – that thank God are printed – I had foreseen that this awful taxation would result to where we are now. I have to be provocative to awake the public. We owe nothing! It is the two regimes that have put Greece in the shit. To make matters worse there is no opposition, and I have personal knowledge of the situation in Greece. I think that we are a country whose soil is blessed. There are islands in the Adriatic Sea, but of course you can’t compare the climatic conditions prevailing in the Greek islands, it’s not a myth, it’s a reality.
It was the Greek City states that have created this miracle in all aspects of life, from shipbuilding to arts, theatre, atomic energy and of course today the world speaks Greek with a different pronunciation and this is a fact. Sometimes I feel strange that the Arabs introduced the numbers, because algebra is by letters. It might suit some people to use the numbers that are Arabic, but only one civilization has been called classic.
There is a big scam against Greece
What do you think should be done and how do you see Greece in year?
We must punish the politicians here and now! My father once upon a time sucked, from Vancouver in Canada, a second engineer who was his nephew. The ship owner who was a friend and family member said ‘what are you doing?’ and he answered ‘I’m the master, those who don’t perform, they go home from wherever the ship is’. This is what it should be done; you don’t allow people who are corrupted to be in power and continue the corruption. Today in the current regime, a coalition of crooks they are trying to save their throats, because if a revolution breaks out in Greece, it would be hell.
I believe that Greece has all the natural resources, the climate to improve all services. On the other hand, the Americans have only one ally, and this is Greece. Greece is the most important nation for the Americans, but there haven’t yet been any Greek politicians to take the Americans by hand and explain them that only a coalition between America and Greece can change the entire route of history because Europe is a dead empire, it is a mess. We could only be their true allies; when they went to the Black Sea, the Greeks didn’t occupy the hinterland of the then nations there, so these nations to become enemies, but only created commercial colonies. We are the teachers of colonisation.
Everybody now envies us, everybody wants to invade us
Do you think it is possible to have an alliance between the United States and Greece?
Of course; I have met in my life some interesting American diplomats who believe in this, but there are some other factors prohibiting this and I can tell you again, and I repeat only Greece and America can change the route of the history in the world, but the Americans they must realise that their only best ally is Greece and no other nation in the Mediterranean and in particular the east Mediterranean is their supporters, staunch supporters alike the Greeks. We are the only alliance which is true and honest and they have to respect us, they have to respect us, after all Greeks nearly took the presidency of the US and this says a lot of things – never forget this. Don’t forget that the biggest American company in shipping is a Greek company, American President Lines, Mr. Skouras who was a Greek was the head. Who had ESSO? Pappadimitriou, Mobil Oil, Tavoulareas, come on we are very powerful, we flourish outside our country because our country is being governed by politicians and hooligans. What can Greece’s socialists say about “selling” the Imia islands and about the economy of Greece to all of these people? Hey blamed the colonels regime vis-à-vis the Cyprus issue… They knew all about this. Mind me, I was involved myself in taking over the Hellenic shipyards to build the submarines but nobody wanted me because they knew I wasn’t going to take under the table one penny! Ok? So there you are, and I know exactly what happened with the submarines and other things. They only wanted one thing and that was money, not even the “traditional” commission… they have even raised the price of these submarines, so all to make lots of money… They have a complex, as we say in Greece any Tom, Dick and Harry want to hang out in the expensive bars, driving their Porsche Cayenne, have a yacht, a few girlfriends, indeed you hear me well, a couple at least, bespoke clothes with other peoples money; that’s a big shame, and we must try them here and now, enough is enough. Otherwise we will need 100 years to repay the other crooks from Europe and elsewhere who on purpose lent us these money. The entire damage is one trillion dollars; this is the so called “debt of Greece”!
What is one thing that people do not know about Greece?
People should understand what it is to have a classic civilisation; this is our unique inheritance, to have the astrolabous, which wasn’t made in the UK or in Russia, America, Africa or China. It was created in Greece. We have science in Greece, not just the philosophy, the drama and comedy is about the places of victories of our ancestors that these plays represent: Aeschylus represents one thing, Euripides something else, Sophocles yet another. And in the mind of Homer it was not just like that the Ulysses came, appeared if you like it; it shows the magnificent mind of the Greek to invent and invent and invent. This is very important. Christopher Columbus came to my Island (Chios), and you won’t believe it, we have a Columbus family there. It’s not a dream it’s a reality. I reiterate, people should read Plato’s Republic and there is an eight page passage about who is the ship-owner and many more interesting things. There no other nation which has created what the Greeks have made in trade and shipping. It’s a saga of ten millennia!
You have been working for all about shipping. Would you like to talk to us about what you’re doing and what is your mission?
I’m not working in my life, it’s a hobby. It all started as a discussion with the daughter of one of my friends who said ‘Mr Yiannis why don’t you launch a site?’ and that’s what happened. It is important to have a platform and not to be cut off from the various newspapers. I’m not a journalist, and that’s why I can write what I’m writing. If you are biased you will fail. All About Shipping is a platform with over 150 sections and as it suggests it’s all about shipping.
Thank you very much Mr Faraclas, it was a pleasure to have talking for Nouse.
Thank you it was a pleasure to talk openly and have this discussion!