China builds clout with boatloads of cash for Greece

Heavy investment in port, other infrastructure raises EU eyebrows

AKIHIRO SANO, Nikkei staff writer

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Container volumes at the Port of Piraeus have more than quintupled since China’s Cosco began running the show.

PIRAEUS, Greece — China is pouring money into Greece’s infrastructure sector, viewing the cash-strapped country as a strategic gateway to Europe.

From the Greek government’s perspective, Chinese investment offers hope for keeping the economy afloat. The European Union, though, is increasingly alarmed at Beijing’s growing influence.

About 10km southwest of Athens, the flags of China and Greece flutter outside the headquarters of the Piraeus Port Authority. Some 16 million passengers pass through the port, the country’s largest, each year. China Cosco Shipping, China’s largest shipping company, in April 2016 agreed to purchase a 67% stake in the port operator from the Greek government.

Greece is required to cut government spending and privatize state-run businesses under the terms of its EU and International Monetary Fund bailouts. It has been relying on such help to cope with its debt crisis since 2010. Austerity measures, however, have prolonged the country’s economic slump, keeping it locked in a vicious cycle.

Foreign investment may be the best hope for breaking that cycle. And China has thrown Greece a lifeline as part of its Belt and Road Initiative — Beijing’s plan to build an economic zone stretching all the way to Europe and Africa by land and sea.

Cosco has been at the vanguard of the march to Europe since it acquired operating rights for the Port of Piraeus container terminal in 2008. The company hired more than 1,000 new workers and invested 600 million euros ($634 million at current rates) to introduce state-of-the-art cranes and construct a new quay, among other projects.

The big push is paying off. The port’s container-handling volume surged more than fivefold in seven years, totaling 3.47 million twenty-foot equivalent units, or TEUs, in 2016.

The Greek and Chinese flags fly at the headquarters of the Piraeus Port Authority.

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The Greek and Chinese flags fly at the headquarters of the Piraeus Port Authority.

When the terminal was still state-run, the Port of Piraeus did not even crack the global top 100 in terms of container volume. Today, it ranks among the world’s 50 biggest container ports.

«Win-win deal»

At one point, European companies showed interest in taking over the facility. But by the final round of bidding, Cosco was the only player still in the game.

 

Source : Asian Review