With Prime Minister Alexis Tsipras frantically wooing foreign investors to offset a crushing economic crisis, China is more and more looking toward Greece to create a modern Silk Road into the European Union, using the port of Piraeus and buying up state enterprises.
“Eventually, Piraeus will become the main entry point for Chinese exports to southern, eastern and central Europe,” Greece’s Ambassador Leonidas C. Rokanas told the South China Morning Post.
“To use a Chinese metaphor, Piraeus will form the “head of the dragon” of the so-called land-sea express route, leading to the heart of Europe through Greece” he said.
He said that Greece, with infrastructure built up by Chinese companies, such as Cosco which is operating Piraeus and with plans to improve rail connections there, will help China connect Asia, Europe and Africa to the European Union.
For Greece, Rokanas said the deal represents a major boost for its recovery following the debt crisis that started in 2009 and devastated its economy even though Tsipras said he’s brought the country toward recovery while at the same time saying it can’t pay back three bailouts of 326 billion euros ($386.52 billion) to international creditors..
The port has opened door for a flurry of Chinese investments totalling US$1.6 billion from companies including mobile giants Huawe and ZTE, the China Machinery Engineering Corporation as well as State Grid, Shenhua Group and Sinovel in the energy sector.
For China, the deals are critical to its strategy in its so-called Belt and Road Initiative as some 50 percent of China’s Gross Domestic Product (GDP) and around 90 percent of the EU’s external trade depends on shipping – a sector in which Greek companies are the largest in the world.
“The land-sea express passage connecting southeast and central Europe to China via Piraeus … has further upgraded the significance of Piraeus,” said Rokanas.
During the Belt and Road Forum last May in Beijing, Tsipras said Greece wanted to upgrade the railway connection between Piraeus and Serbia’s capital Belgrade.
In September, Greece signed an agreement with Bulgaria on the construction of a high-speed railway network, named “Sea2Sea”, that will connect three ports in Greece – Thessaloniki, Kavala, Alexandroupolis – with three Bulgarian ports – Burgas and Varna on the Black Sea and Ruse on the Danube, Europe’s second-longest river.
The Chinese company Fosun is one of the international investors in a consortium led by Greece’s Lamda in the long-delayed 8-billion-euro ($9.49 billion) development of the old Hellenikon International Airport on Athens’ coast that some elements in SYRIZA, who don’t want any foreign businesses in Greece, are desperately trying to block.
“The Hellenikon project’s contribution to attracting direct foreign investment could be decisive for the overall growth prospects of the country,” said Rokanas, citing a study for the Foundation for Economic and Industrial Research that forecast the project would contribute 2.4 percent to the country’s GDP until its completion date.
The deal would also provide as many as 10,000 jobs in Greece, which has the highest unemployment rate in the EU, and another 75,000 jobs once the high-end mix of luxury residences, commercial projects, a casino, yacht marina and other works are done, unless the deal falls through.
Rokanas told the Chinese paper that the projects such as the Belt and Road would have the potential to bring together EU nations rather than to divide them despite worries in the EU that China is getting too big of a foothold in the bloc and using Greece as the fulcrum
“We do not see these developments as antagonistic vis-a-vis other relationships we have; on the contrary they, in fact, complement and empower those relationships, including the triangular relationship we have with the EU and China,” he said.
“Greece, a member of EU, Eurozone and NATO, remains an important strategic hub and an effective paragon of peace, security, stability and prosperity in the entire region of southeastern Europe, the Mediterranean and beyond,” he added.