The Greek government is wary of possible economic disruption from the war in Israel.
It creates serious risks of the spread of hostilities throughout the Middle East. If Iran decides to go to war, it will have catastrophic consequences for fuel and commodity prices.
Both the business world and households are watching developments with concern. If conflicts escalate, there will be an immediate impact on energy and key commodity prices. The result will be another wave of rising prices.
At the same time, there is serious concern in the export community about developments in Israel, as trade relations between the two countries have grown significantly in recent years. Regarding bilateral trade between Greece and Israel in 2022, a significant increase in total volume was recorded by 45.8%, reaching 1.37 billion euros.
This growth is mainly due to a 54.9% increase in Greek exports to Israel, which reached a value of €850 million compared to €548.7 million in 2021. In 2022, imports from Israel increased by 33% and reached 523 million euros compared to 393 million euros in 2022.
According to the Greek-Israeli Chamber, Greece exports heavy petroleum products, copper and iron pipes, wires, building materials, aluminum structures, mechanical equipment and sulfur to Israel.
The main food and beverage products that Greece exports from Israel are margarine, prepared vegetables, vegetable oils, fresh fruit, fish, confectionery and bakery products, beer, nuts and yoghurt.
Our country also imports light petroleum products, scrap metal, fertilizers, paper, plastics, insecticides and related chemicals.
The most important role of Ashdod
The role of the port of Ashdod, which is Israel’s most important trading hub, is considered decisive. According to Shaul Schneider, executive chairman of the board of directors of Ashdod Port Company, one of Israel’s largest ports continues to function normally despite the ongoing conflict between Israel and Hamas. He noted that Ashdod Port Company employees continue to keep the Israeli economy running smoothly and are working even faster, understanding the importance of maintaining the smooth operation of the port.
Ashdod, Israel’s only state-owned port, operates 24 hours a day, with employees working longer shifts. The first reason is their own safety. According to Schneider, it is safer for port workers to remain on port property than to travel home by road. In addition, the Israeli army has called up 10% of Ashdod’s personnel, so the remaining personnel must fill the gap. However, no one can guarantee that the situation will not change.
“The Big Question”
The President of the Piraeus Chamber of Commerce and Industry, Vassilis Korkidis, expresses strong concern about the war in Israel:
“Another war in our neighborhood. Another instability in the Eastern Mediterranean region, with the word ‘instability’ causing international trade to hold its breath as it waits for the dust from the missile strikes to settle on both sides. I hope the trading world does not experience the same agony which he experienced 50 years ago, during the Yom Kippur War of 1973. Unfortunately, the world economy has again turned its gaze to the Middle East, and Greek businesses, active in trade, industry and shipping in the Eastern Mediterranean, are taking a wait-and-see approach .
The big question is the scale and duration of the war, since a possible escalation would be a serious blow to our region. What is certain is that we are forced to face another serious geopolitical risk that threatens to seriously impact our tourism and export sectors, but we cannot yet assess the scale of the economic impact on the Greek economy. In the short term we see benefits from more cruise ship calls to the Greek islands instead of Haifa, but the question is what will happen in the medium term.
All this, of course, at the moment is a secondary issue of the war in the Middle East, since the main issue everywhere and always is the death of people, especially civilians. My last comment on the development of the current critical situation in the Middle East is “the worst.”
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