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Greece Seeks Role as China's Gateway to Europe

By MarEx 2014-06-20 13:30:00

China wants to invest in Greece's busiest port, the two countries said on Friday, as the country where the euro debt crisis began seeks a role as China's gateway into Europe.

Chinese Premier Li Keqiang is on a three-day trip to Greece to strengthen economic ties between the nations, who have drawn closer since China's Cosco Pacific won a 35-year concession in 2009 to upgrade and run two container cargo piers at the Piraeus port.

Greece, which relies on bailout loans from the European Union and the International Monetary Fund, desperately needs foreign investment to spur growth and create jobs as it struggles to exit a six-year recession.

China has already submitted a bid to buy a majority stake in Piraeus. "China attaches great importance to Greece's unique geographic advantage of being a gateway to Europe and, in that light, is prepared to intensify its cooperation with Greece in basic infrastructure such as ports," the two governments said in a joint statement.

Both sides have sought to play up Greece's strategic location at the crossroads of Europe, Asia and Africa, saying the country could become a hub for channeling goods from the world's second-largest economy and top exporter into Europe.

"Piraeus port can become a gateway of China to Europe," Li said during a visit to Cosco's facilities at Piraeus.

Li, who on Thursday promised Greeks his country would remain a "long-term investor" in Greek bonds, on Friday said China would encourage its businesses to cooperate with Greek companies that repair ships.

Greece has the largest shipping fleet in the world, and Greek shipowners transport about 60 percent of China's imported oil and more than half its exported goods, Greek Shipping Minister Militiadis Varvitsiotis said.

China has been steadily ratcheting up its interest in Greek assets in recent years.

Cosco Pacific has said it wants to turn Piraeus into a regional hub and sought to expand port facilities and construct an oil refueling jetty, a 230 million-euro ($314 million) investment which needs to be approved by the European Commission.

Cosco has also expressed interest in acquiring a 67 percent stake in the port.

"Greece welcomes the interest by Chinese businesses to take part in the Greek government's privatization program and declares its intention to provide the necessary facilitations and every support," the joint statement read.

This is the second time a Chinese premier has visited Greece since Athens acknowledged in 2009 that its finances were in deep trouble.

"The affair between the two economies started in 2004-2008. In 2010 the appetite for trade cooperation was official and now, in 2014, we see that there is a strong will to make it deeper," George Xyradakis, an adviser to the China Development Bank in Greece, told Reuters.

By Renee Maltezou (C) Reuters 2014.