In today’s sneak peek, I’m highlighting one of the biggest themes in “Dynasties of the Sea” and that’s the various shipping leaders worries about the lack of political will and leadership in the sovereign debt crisis plauging the world economy. With the recent images of fires burning in Athens and the United States facing it’s own fiscal cliff, I found Angeliki Frangou, CEO of Navios Maritime Holdings (NYSE:NM) thoughts not only timely but appropriate.
I like to call Frangou, a triple threat shipping CEO- based on her savvy financial acumen, her mechanical engineering background and a family lineage in shipping dating back to the 1700s. Frangou has dazzled the industry with a lengthy list of creative deals. In the process, she has built an empire and earned a reputation as the most powerful woman in shipping. I bolded two of the biggest points she made.
The following is an excerpt from Dynasties. Any reproduction needs to get the approval of Marine Money International:
Strengthening Global Trade
When looking at the future of global trade, Frangou identifies the need for Europe to resolve its sovereign debt crisis as the number one thing that must happen in order to strengthen the global system. “You’ll have banks being able to function again. In Europe, 70 percent of the companies borrow from banks. There is no functional debt capital market. As a result, the banks are the engines of growth.” Other trade worries include protectionism and socialism, because they negatively impact trade. Frangou may have the ear of Greek and European business leaders, but she said it is political leaders that need to make the tough decisions and act with discipline so they can give hope to the next generation.
“The biggest issue in Europe is that the politicians were making false promises to the youth. Anyone who knows anything about reality knew the promise of employment for life in the public sector would never to be fulfilled. Europe must change its attitude. This is a European cultural problem. We don’t teach entrepreneurism. We allow that to be offshored to the U.S. and elsewhere. But we need to come to grips with the fundamental understanding that there is no free lunch…that government not only does not currently have the capability to provide the jobs it promised, it never had this capability and we are just now beginning to pay the price for this overextension by prior generations of political leaders.” Frangou stressed the need for governments to breed entrepreneurship and encourage private enterprise to grow. “Private enterprises are the ones that will employ people. They know how to take risks. We need to adopt this culture of risk-taking, reform our process of business and allow the private sector to provide answers. I think we will be positively surprised if we do so, and stuck in an ugly position if we don’t.”