China gives beleaguered Tsipras a helping hand with harbor purchase
Updated: 2016-01-21 23:36
By Maria Petrakis(China Daily Europe)
|General view of Greece's largest port in Piraeus near Athens in this January 28, 2015 file photo. [Photo/Agencies]|
It could have been part of the script that has dogged Greek leaders for the past six years: A Greek prime minister trying to convince world leaders and businessmen that Greece is worth investing in as Greeks took to the streets to protest the reforms demanded in return for billions of euros in rescue funds.
But the most leftwing of all Greek Prime Ministers, Alexis Tsipras, got a helping hand in Davos at the World Economic Forum this week. As he pitched for more growth, not austerity, amid growing domestic opposition to new pension cuts, the Chinese decided Greece was worth sticking with and increased the price state-owned Cosco Shipping Group Co would pay to control Greece's biggest harbor.
It's a development that appeared unlikely when Tsipras was first elected prime minister a year ago, vowing to halt privatizations like that of Piraeus Port Authority SA and tear up the two bailout agreements that forced higher taxes and cuts in wages and pensions on Greeks.
But Cosco has kept its sights firmly on Piraeus as a lynchpin in China's plan to create a modern commercial empire pumping Chinese goods throughout the continent and European goods back into China, known as One Belt, One Road initiative.
To do that Cosco has overcome Greek campaign promises to cancel, renegotiate or delay the deal as politicians sought votes from union workers, such as those in the Piraeus docks.
Control of Piraeus "is the most important step in linking Europe to Asia," said George Tzogopoulos, a research fellow at Athens-based Hellenic Foundation for European and Foreign Policy. "That is why Cosco was so patient with Greek madness."
Tsipras has tempered his tone since being forced in July to accept a new 86 billion euro bailout to keep Greece in the Eurozone. And while Greek officials confessed to being disappointed that Cosco was the only bidder to present a binding offer last week, the Chinese shipping giant stepped up to the plate when the Greek government asked for an improved offer.
Cosco's price of 22 euros a share, or 368.5 million euros, for the 67 percent stake in Piraeus, beat a range set by two independent valuers of 18.4 euros to 21.2 euros a share. The offer comes with commitments for investments and is worth 1.5 billion euros to the Greeks after factoring in dividends and income from the concession agreement.
Analysts see Chinese investment in Piraeus as a key part of China's One Belt, One Road policy, which envisages creating the 21st century land and maritime equivalent of the Silk Road. Since the Chinese shipping behemoth started container operations in 2009, traffic has surged at Piraeus, making the harbor one of the fastest-growing ports in the world. Premier Li Keqiang called Piraeus China's gateway to Europe in a visit to Greece in June last year.
It hasn't been easy. Cosco has seen five separate Greek premiers, not including caretakers, since it won the license to operate Pier II in 2008 for 30 years at a cost of 490 million euros.