European shipowners welcome the agreement on the Basel III rules reached between the European Parliament and the Council on 28 June. The rules give explicit recognition to ship finance.
The new rules will allow banks to apply preferential treatment to shipping portfolios on specialised lending when calculating risk weights and ultimately their capital requirements. As a result, the new law will enable banks to finance at a competitive price.
Only a starting point
This is a positive step forward, but more needs to be done to restore access of shipping companies to adequate financing in Europe and support the competitiveness of the industry.
‘The strategic role of shipping for Europe’s energy, food and supply chain security must be properly recognised in the conditions for ship finance as well,’ says Sotiris Raptis, European Community Shipowners’ Associations (ECSA) Secretary General. ‘Supporting the industry’s competitiveness is a prerequisite for enhancing Europe’s security and for supporting the continent’s energy transition. The recognition of ship finance under the new European law is a necessary step forward, but it is clearly only a starting point.’
A diverse range of toolkits of financing and funding instruments are needed to maintain and advance the competitive edge of the European shipping industry vis-à-vis its key global competitors.
The new law will have to be formally approved by the Plenary of the European Parliament and the Council in the following months.