Forecasts for Port of Piraeus and Old Airport Cloudy; Investment Declines in Greece

(AP Photo/Petros Giannakouris, file)

ATHENS – With mere days to go before the July 7 snap elections called by Prime Minister and leader of the radical-left SYRIZA party Alexis Tsipras, Greece’s biggest – and most frustrating – potential investment projects were in the news this week.

Last Friday, the Chinese company Cosco’s 600-million-euro master plan for the port of Piraeus was addressed in a high level meeting at the Municipal Theater of Piraeus, and on Tuesday, Odysseas Athanasiou, CEO of Lambda Development, placed the blame for continuing delays of the 8 billion euro Ellinikon project squarely on the Greek government.

The two massive projects will generate thousands of jobs and stimulate collateral investments in their vicinities, and they have been cited as litmus tests for more major investments in Greece by Diaspora Hellenes and non-Greeks alike – but the perception inside and outside the country is that the leaders of SYRIZA simply do not care – or are afraid to lose the support of the group’s far, far left base.

The Cosco project “was the focus of a high-profile and multi-party meeting on Friday at the Municipal Theater of Piraeus, between the Chinese multinational’s leadership, the visiting mayor of Shanghai and the newly re-elected administration of the port city, among others. The meeting and high-level contacts come after the Cosco-controlled Piraeus Port Authority’s 600-million-euro master plan continued to face obstacles and resistance from both the central government and local entities,” the business newspaper Naftemporiki reported.

The project calls for: a high-end shopping mall, luxury hotels, and a new logistics hub within the port’s premises. While local merchants appear to be the force behind opposition to the mall, there are also obstacles to Cosco’s plans to upgrade and expand ship-repair services.

The stakes are potentially much higher because the Chinese have expressed a desire to modernize Greek freight rail lines that will expand access to markets in Eastern and Central Europe for Greek and Chinese firms.

For his part, recently re-elected Piraeus Mayor Yannis Moralis has declared that he wanted to boost cooperation with Cosco, but Naftemporiki says he also wants the port authority “to deepen its ties with local society and business interests.”

Participants in the meeting included China’s Ambassador to Greece, Zhang Qiyue, Cosco Shipping Group President Xu Lirong, Greek shipowner businessman Vangelis Marinakis, who also owns the popular Olympiacos soccer team whose stadium is near Piraeus, chamber of commerce presidents, and other local officials.

 

THEY HAVE OTHER THINGS ON THEIR MIND

The SYRIZA government has been very eager, on the other hand, to make hydrocarbon deals.

On June 27, contracts will be signed between the Greek state and a consortium including ExxonMobil (40 percent), Total (40 percent) and Hellenic Petroleum (20 percent) for exploratory drilling west and southwest of Crete.

Prime Minister Alexis Tsipras will attend the signing ceremony – a priceless “photo op” for a party trailing in the most recent poll by 10 percent.

SO MUCH FOR STRUCTURAL REFORMS

There appear to be good reasons why Tsipras doesn’t even attempt to claim credit for moving forward on reforms in the economic sphere. Naftemporiki reports that “the prices of most basic consumer goods in thrice bailed-out Greece, for 2018, were on average higher than the median price in the European Union, according to figures released this week by Eurostat.

While various types of meats were an exception, prices for dairy products and eggs, for instance, were higher by 34 percent from the EU28 average – only Cyprus was more expensive, 36 percent above the average.

As for stimulating domestic and attracting foreign direct investment, in the fifth year of SYRIZA rule investment in industry will fall according the Foundation for Economic and Industrial Research (IOBE), shrinking 1.1 percent from 2018. The main reasons cited for the slump are high tax rates and the poor availability and high cost of borrowing funds. Last year, investment spending in manufacturing declined 6.9 percent.

AND AT THE AIRPORT… FURTHER DELAYS

At the General Meeting of Lambda Development, the company which leads the consortium with plans to develop the old Athens airport, the Ellinikon project, CEO Odysseas Athanasiou blasted the SYRIZA government. He conveyed to the gathering, according to Kathimerini, that “the state has had all the studies and documents required for the issue of the ministerial decision required for the Ellinikon development project to proceed since mid-February,” and that “Lambda has fulfilled all its obligations for the licensing of the 8-billion-euro investment, and bears no responsibility for the long delays, unlike what the narrative of government officials has suggested in recent weeks.”

The Lambda CEO said, “once we have received the draft decisions, we will only need a couple of weeks to send them back to the ministries for signing.”

Meanwhile, the bid deadline for the casino tender continues to be a moving target due to the lack of a ministerial decision.

 

Material from Naftemporiki and Kathimerini was used in this article.