The last six years of economic crisis have taken a huge toll on Greece’s fishing industry, with fish being the country’s second largest agricultural export. Diminishing household buying power has stifled the demand for fish domestically; a problem that has been exacerbated by a weakened banking sector that is unable to provide sufficient cash to customers. Exporting fish to countries in a more stable economic position could revive this industry, yet even this solution is laden with problems.
In an attempt to pull Greece out of economic disaster, its creditors have employed a strategy known as internal devaluation. Essentially, this strategy pushes down prices and wages in an effort to make industries more competitive. However, lower wages have greatly decreased domestic consumption. To make matters worse, fish processors now face higher taxes on processed food. Because the demand for expensive fish has disappeared, fishermen are now only targeting cheap fish like sardines and anchovies. The increase in supply of cheap fish in the market has further driven down prices, squeezing profits for fishing companies and independent fishermen alike.
Greece’s best option to revive its aquaculture industry may be growing fish instead of catching them. Greece’s fish farming sector is known to be technologically savvy and export focused, but is being hampered by capital controls such as restrictions on wiring money abroad. Fish farmers in Greece rely on imports such as fish meal from Norway and fish oil from Chile, but importing anything is becoming difficult with new limitations being placed on paying for imports. Measures enacted to boost Greece’s economy are having the opposite effect and are hindering economic growth. Implementing policies that limit trade with other countries will only add to Greece’s economic problems.
What do you think is the best strategy for Greece to employ to restore its once prominent fishing industry? Feel free to share your thoughts below.