The heated debate that is currently raging in Germany about the entry of the Chinese state shipping company Cosco in the port of Hamburg is viewed with limited understanding in Greece. Since 2011, under the pressure of the debt crisis and the troika, the Greek state has sold almost all of the country’s major ports and airports to foreign companies.
In 2016, Athens signed the contract with Cosco, with which the Chinese company secured a two-thirds majority in the port of Piraeus.
To date, the Greek government is quite satisfied with the performance of Cosco in the largest Greek port. “Chinese investment in Piraeus is beneficial for both countries,” Prime Minister Kyriakos Mitsotakis said at China’s first summit with the 17 countries of Central and Eastern Europe on February 9, 2021.
China’s President Xi Jinping described Cosco’s investment in Piraeus as an “exemplary project”. He had already inspected the port himself in 2019. Xi sees Piraeus as “an important hub for the rapid land and sea link between China and Europe and for connectivity between Asia and Europe.”
In fact, the Chinese have modernized the port: Piraeus has now become the largest port in the eastern Mediterranean and the seventh largest in Europe. Jobs are secure, working conditions are neither better nor worse than elsewhere in Greece.
Cosco operates within the framework of Greek labor law and is subject, at least in theory, to the controls of the competent authorities – which, however, rarely take place.
Despite this, unions in Piraeus have continued to complain about working conditions and are pushing for more safety measures after a port worker was killed in an accident at a container pier last year. Apparently, however, Cosco – like almost every large employer in Greece – does not feel any great pressure from the responsible control authorities.
Since Cosco boarded in Piraeus, the Chinese state-owned company’s ships have been bringing more and more products into the port, which has become one of the most important transshipment points in the Mediterranean. This is not a problem for other Greek ports as they do not compete with Piraeus.
However, this has had a negative impact on other transshipment points in the south-eastern Mediterranean: They have lost importance and lost sales.
So is the Chinese investment in Piraeus a success story? Only as long as you have no vision and no money for your own national port policy, says Kostas Chlomoudis, professor of maritime studies at the University of Piraeus.
In an interview with DW, he explains that the model of private sector participation in ports that applies elsewhere in Europe has nothing to do with Greek practice.
In the EU, a pier is leased to a private company for a certain number of years and there are often several competing companies sharing a container terminal. In Greece the situation is completely different.
In Piraeus, the port’s majority stake was sold to Cosco, first 51, then 67 percent. The Chinese shipping company can therefore alone determine the future of the port. Cosco is the lord of all piers and all terminals.
“The sale of the port of Piraeus to Cosco was a tragic mistake in the way it was carried out,” says Chlomoudis. Unlike Hamburg, Piraeus is actually directly dependent on a third country, namely China.
In addition, the privatization of the important port of Alexandroupolis in northern Greece is also pending. The USA will probably take over there. The port is already an important hub for American arms shipments. Chlomoudis criticizes that this means that basic infrastructures of considerable geostrategic importance for the EU are in the hands of third countries.
The professor from Piraeus is certain: Clear rules are needed as to which conditions must be included in the concession contracts so that national security and the security of the EU are not endangered.
The specifications for infrastructures of geostrategic importance should be uniform throughout the EU. And the same requirements should apply to the ports of Rotterdam, Hamburg and Piraeus.
“We need a common European policy,” said Chlomoudis. “The Commission should use the problem that is currently being discussed in Germany as an opportunity to create common guidelines to protect European interests vis-à-vis third countries.”
As a reminder: at the beginning of the century there was only one magical recipe for solving economic problems in Europe: the privatization of infrastructure. They wanted to sell everything: ports, airports, water and energy supplies. So was Greece, which was hungry for investment.
The Chinese were the first to take an interest in both the port of Piraeus and the port of Thessaloniki. But at the time, the workforce successfully resisted the takeover. It was not until 2009 that the then conservative government of Kostas Karamanlis was able to lease part of the container terminal in the port of Piraeus to Cosco.
Then came the Greek sovereign debt crisis in 2010. One of the conditions that the EU Commission, ECB and IMF troika set for the rescue of the Greek economy was the sale of public property. This is how Cosco got the majority in the port of Piraeus, since the Chinese were the only ones who wanted to invest at the time.
Pressure to privatize everything also led to the takeover of 14 Greek airports by Germany’s Fraport, including Thessaloniki Airport. Fraport can now decide which airport to invest in first and which not. The Greek state has nothing more to say.
But: In contrast to Chinese or American investors, Fraport is a German and therefore an EU company – not a company that poses a geopolitical threat.
Author: Bali Feet
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The original of this article “In the port of Piraeus, China is the boss” comes from Deutsche Welle.
