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Economy

Greece Wants More Chinese Investments for Post-COVID-19 Recovery

November 25, 2020

While being squeezed by the United States not to get too cozy with China, Greece's beleaguered economy shrinking over the COVID-19 pandemic needs more Chinese investments, New Democracy government officials said.

Under President Donald Trump, the US – which wants an expanded military presence in Greece – has been engaged in trade battles with China and wants to slow China's growing hand in the European Union.

Greece was beginning to speed a slow recovery from a near decade-long economic and austerity crisis – spurred by three international bailouts of 326 billion euros ($387.26 billion) that ended Aug. 20, 2018 – when the pandemic hit.

That brought a 10-week lockdown in the spring that closed non-essential businesses with a second lockdown now in place until at least Dec. 1 that could see many companies, and restaurants and bars, shuttering for good.

The economy is set to shrink at least 10 percent this year and Prime Minister Kyriakos Mitsotakis has been actively courting foreign investments, luring Microsoft to open a major computer cloud office. 

The Chinese company COSCO operates the port of Piraeus and has built it into one of the EU's best and biggest and is planning a 610-million euro ($724.7 million) overhaul there.

"Greece can not only gain in competitiveness, but will be a leading player in the region," Kostas Karamanlis, Minister of Infrastructure and Transport, said regarding the economic prospects after the pandemic.

In a feature, the Chinese state-run news agency Xinhua said Greek officials are welcoming Chinese interest in taking part in a post-pandemic recovery, shown during a Chinese-Greece online video conference.

"Even amidst the current global uncertainty, Greece has become a promising and secure investment destination in southeastern Europe… I invite you to explore the numerous investment opportunities Greece has to offer," Yannis Smyrlis, Secretary-General for International Economic Relations at the Ministry of Foreign Affairs, said.

Greek officials said that the crisis has presented an opportunity for investors, with Greece in a key geographical position as COSCO envisioned using Piraeus as a gateway to the EU and improving rail access from there to Greece's borders.

Greece obtained 32 billion euros ($38.02 billion) in EU loans and grants to help deal with the pandemic, which officials said could also be used to invest in major infrastructure projects in areas sujch as logistis, railways, ports and airports.

Chinese Ambassador to Greece Zhang Qiyue said the pandemic – which began in China and overwhelmed the world – showed the need for global cooperation in other spheres as well.

China has been eyeing a bigger role in the EU through its New Silk Road scheme, the Belt and Road Initiative (BRI) and its 17+1 program to create more opportunities for collaboration, she said.

The event event was organized by the Athens Chamber of Commerce and Industry in cooperation with the China Chamber of Commerce to the EU and the Hellenic Trade Council. 

The event came less than three weeks after the US said Greece should not be used to be China's pawn to gain a greater financial foothold in the country and into the EU, the two major powers struggling for influence.

Greece has been eager for Chinese investments, especially during a near decade-long economic and austerity crisis but the US has been making moves to have a stronger role in Greece, including renewing a military cooperation agreement.

Mitsotakis earlier this year met with Adam Boehler heads the US International Development Finance Corporation which is trying to be an alternative to Chinese investment programs in the EU.

Boehler’s visit was  quickly followed by US Secretary of State Mike Pompeo, showing Washington's desire to try to push China out, a double win for Washington as the world's two major superpowers jockey for position.

In a feature, The South China Morning Post noted that Greece's geographical position is a lure to getting into the rest of the EU and expand global influence as well as lucrative trade and extend power.“China itself has identified (Greece) as the dragon’s head of the Belt and Road Initiative in Europe,” the US ambassador to Greece, Geoffrey Pyatt, told the Greek newspaper Kathimerini earlier.

“We’re going to have a debate in terms of how we get the balance right in dealing with the challenge that China presents. China’s not going to go away,” he said, signaling a long-lasting tug 'o war over Greece.

Boehler wanted to convince Mitsotakis that Greece’s second-largest but near-bankrupt shipyard in Elefsina, only 13 kilometers (8.07 miles) west of Piraeus should accept US aid or “fall into the wrong hands,” a diplomatic source not named told the newspaper.

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