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Aerial view of a Cosco cargo ship moored between two piers covered with colorful shipping containers.
The Chinese state shipping company Cosco controls a 67% stake in the port of PiraeusImage: Lefteris Partsalis/Xinhua/picture alliance
TradeChina

In Greece's largest port of Piraeus, China is the boss

Kaki Bali
October 30, 2022

Since 2016, the Chinese shipping company Cosco has been the majority stakeholder in the port of Piraeus. This means a foreign power controls Greece's main port.

https://p.dw.com/p/4ImNZ

In Germany, a heated debate has been raging about the Chinese state shipping company Cosco buying a minority stake in a container terminal at the port of Hamburg.

Greece, however, seems to have no such concerns. Since 2011, under pressure from both the debt crisis and the Troika (the European Commission, the European Central Bank and the International Monetary Fund), the Greek government has sold almost all of the country's important ports and airports to foreign companies. Athens signed a contract with Cosco in 2016 that has allowed the Chinese company to secure a two-thirds majority stake in the port of Piraeus.

So far, the Greek government appears to be satisfied with Cosco's performance at Greece's main port. "The Chinese investment in Piraeus is beneficial for both countries," Prime Minister Kyriakos Mitsotakis said in February 2021, at China's first summit meeting with the 17 Central and Eastern European countries. The Chinese president, Xi Jinping, described Cosco's investment in Piraeus as an "exemplary project." Xi, who inspected the port himself in 2019, sees Piraeus as "an important hub for China's fast land-sea link with Europe, and for connectivity between Asia and Europe."

President Xi Jinping, in black suit and blue tie, smiles and gesticulates amid a small group of people, with cranes and shipping containers in the background
ChinesePpresident Xi Jinping visited the port of Piraeus in November 2019, praising it as an "exemplary project"Image: Li Xueren/Xinhua/picture alliance

The Chinese have indeed modernized Piraeus. It is now the largest port in the eastern Mediterranean, and the seventh largest in Europe. Jobs are secure, and working conditions no better or worse than anywhere else in Greece. Cosco operates within the framework of Greek labor law, and is, at least in theory, subject to inspections by the relevant authorities — though these rarely take place.

Nonetheless, unions in Piraeus have repeatedly complained about working conditions there, and are pushing for better safety measures after a dockworker died in an accident on a container pier last year. As with almost every major employer in Greece, however, the relevant inspection authorities do not seem to be exerting much pressure on Cosco.

Transshipment point for Chinese products

Since Cosco bought into Piraeus, the Chinese state-owned company's ships have brought more and more goods to the port, and it has now become one of the most important transshipment hubs in the Mediterranean. This isn't a problem for other Greek ports, as they don't compete with Piraeus. It has, however, had a negative impact on other transshipment hubs in the south-eastern Mediterranean, which have become less important, and have lost revenue.

So is Chinese investment in Piraeus a success story? Only if you have no vision or money for a national port policy of your own, says Costas Chlomoudis, a professor of maritime studies at the University of Piraeus. In an interview with DW, he explained that the model of private sector involvement in ports that is seen elsewhere in Europe bears no relationship to the one in Greece. Most EU countries, he said, will allocate a pier to a private company for a certain number of years, and several competing companies will often share one container terminal. In Greece, the situation is completely different.

Piraeus is not Hamburg

In Piraeus, majority shares in the port were sold to Cosco: its initial 51% was later increased to 67%. The Chinese shipping company can therefore decide the future of the port. Cosco controls all the piers, and all the terminals. "In the way it was carried out, the sale of the port of Piraeus to Cosco was a tragic mistake,'' says Chlomoudis — because, unlike Hamburg, Piraeus is now directly dependent on a third country, namely China.

Aerial view of the port of Alexandroupolis
The United States is set to invest in the port of Alexandroupolis in north-eastern GreeceImage: Nicolas Economou/NurPhoto/picture alliance

The key port of Alexandroupolis in northern Greece is also about to be privatized. Here, the United States is set to buy in: The port is already a major transshipment point for consignments of American arms. Chlomoudis is very critical of these privatizations, which mean that essential infrastructure of considerable geostrategic importance to the European Union ends up in the hands of third countries.

Brussels should intervene

According to the professor from Piraeus, clear rules are needed. Certain conditions must be included in the concession contracts to prevent national security, and that of the EU, being jeopardized. The guidelines for infrastructure of geostrategic importance should be the same throughout the EU, he says — the same guidelines should apply to the ports of Rotterdam, Hamburg, and Piraeus.

"We need a common European policy," Chlomoudis says. "The Commission should treat the problem being discussed in Germany right now as an opportunity to establish common guidelines, to protect European interests with regard to third countries."

Privatization as a remedy

At the start of this century, Europe only had one magic remedy for solving economic problems: privatizing infrastructure. Everything was for sale: ports, airports, water and energy supplies. This was also true in Greece, which was hungry for investment.

The Chinese were the first to show an interest in the ports of Piraeus and Thessaloniki. Back then, though, the workforce successfully resisted the takeover. It wasn't until 2009 that the conservative government of Kostas Karamanlis was able to lease part of the container terminal in the port of Piraeus to Cosco.

Then, in 2010, came Greece's sovereign debt crisis. One of the conditions for rescuing the Greek economy, as set by the so-called Troika, was the sale of public property. This was how Cosco obtained a majority stake in the port of Piraeus; the Chinese were the only ones willing to invest at that time.

Pressure to privatize everything also led to the takeover of 14 Greek airports, including Thessaloniki, by the German transport company Fraport. Fraport can now decide which airport should benefit from investment, and which should not: The Greek state no longer has any say. However, unlike with Chinese or American investors, Fraport is an EU company, meaning that it does not pose a geopolitical threat.

This article was originally published in German.

Germany's Cosco deal: A risky dependency?

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