Spain Evaluates Costs and Benefits of Allowing Foreign Seafarers Onboard Declining Fleet
Spain is currently facing a crossroads regarding a 2005 regulation that opened its fleet to non EU seafarers in a time of economic uncertainty.
Fairplay reports:
Spanish fleet decline continues
Shipowners in Spain, recovering from recession, are pressing for political action to reverse the fleet’s decline. Andrew Spurrier reports
The Spanish government can claim to have achieved some success in its handling of the country’s wider economic problems in recent months. It has not, however, found a way to stem the decline of the Spanish-flagged fleet.
At the end of last year, the number of vessels under the Spanish flag had fallen to 126 from 136 a year earlier, while the fleet capacity declined from 2.53M gt to 2.33M gt.
Spanish shipowners’ body ANAVE said this is the largest reduction in tonnage since the creation of the Canary Islands special register in 1992 to stem the exodus of Spanish ships to flags of convenience.
The decline has had a clear knock-on effect on the larger Spanish-controlled fleet, with vessel numbers falling from 223 at the end of 2012 to 211 at the end of last year, and tonnage from 3.99M gt to 3.83M gt.
Shortly after it took office in December 2011, the government, led by Mariano Rajoy’s People’s Party, promised a strategic plan for the shipping industry that shipowners hoped would deal with the problem they saw as the cause of the decline in the Spanish-flag fleet: the uncertain status of non-EU seafarers aboard its vessels.
The owners say this uncertainty was caused by a 2005 regulation setting out the conditions on which non-EU seafarers could be employed aboard Spanish-flagged vessels.
The signs are, however, that the government is unlikely to rectify the situation any time soon. The Spanish Maritime Authority, which falls under the authority of the Ministry of Public Works and Transport, supports the owners’ efforts to have the status of non-EU seafarers clarified, but the Ministry of Employment, which is directly responsible for the regulation in question, seems to be taking a contrary position.
According to a shipping industry source, the employment ministry is under pressure from the unions not to change the legislation, arguing that, with unemployment in Spain still running at more than 25%, priority must be given to Spanish jobseekers. Despite this difficulty, Spanish shipowners are looking forward to benefiting from the improvement in the Spanish economy.
ANAVE director-general Manuel Carlier told IHS Maritime: “We see in the past five or six months clear signs of improvement in economic activity that reflects in higher port activity, especially in the dry bulk and ro-ro trades.”
Carlier indicated that prospects were also encouraging for the ferry and cruise sectors, thanks to a recovery in the tourism industry that made itself evident this spring and is expected to continue into the summer.
His optimism is supported by forecasts for the wider Spanish economy. According to the EU spring economic forecast, Spain can look forward to “mild economic recovery”, which is expected to result in 1.1% GDP growth this year and 2.1% in 2015.
The EU noted the role of exports in the improvement in Spain’s economic performance to date, but said domestic demand was set to increase and would gradually take over from foreign demand as the main driver of economic growth.
It said exports, which showed 4.9% growth last year, would nevertheless remain robust provided growth in emerging economies, particularly those in Latin America, was maintained.
Imports, which increased by a meagre 0.4% last year, are forecast to show 3.4% growth this year, according to the EU. The balance of trade is seen as remaining weak at 0.6% of GDP this year, after 1.2% last year, but the country’s current account, which showed a 0.8% surplus last year, is expected to increase to 1.4% this year and 1.5% in 2015.
This gradual recovery is unlikely to have a marked impact on Spain’s notoriously high unemployment rate, however. Unemployment peaked at 27% in 1Q13 and came down to 26% at the end of the year.
The EU said the job-cutting had bottomed out in the last quarter of 2013, with employment growth expected this year, leading to a moderate fall in unemployment to 25.5% this year and 24% in 2015.
