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International Relations

Greece looks beyond China for Asian partners

Deputy PM Dragasakis says no to a 'one-sided unique relation' with Beijing

Greek Deputy Prime Minister Yannis Dragasakis

ATHENS -- Greece wants to deepen its relations with Asian nations. But its deputy prime minister says that with China flexing its financial muscle in the region, the cash-strapped country faces a delicate balancing act.

China is among the countries Greece wants a closer relationship with. But Greece is also keen to build stronger ties with Japan, India and other Asian countries, Deputy Prime Minister Yannis Dragasakis told the Nikkei Asian Review.

"We do not want to have a one-sided unique relation," Dragasakis said. "We understand our policies to try to find ways to have close relations with all Asia -- Japan, China, India."

Greece's port of Piraeus is key to China's Belt and Road Initiative, meant to link Asia and Europe by land and sea. In 2016, Cosco Shipping Holdings, China's state-owned shipping giant, acquired a company that operates the port, the biggest in Greece. China has been on an investment spree in Greece ever since.

But Dragasakis' remarks suggest that Greece, which was brought to its knees by a debt crisis triggered by the 2008 global financial crisis, does not want to become too dependent on China, which has been investing in infrastructure throughout Europe over the past few years. In part, Greece's concerns of China's growing influence in the region reflect those of the European Union.

The financial crisis exposed structural problems in the Greek economy that led to a severe credit crunch in the country. The EU and International Monetary Fund subsequently came through with a bailout. Greece hopes to exit the bailout program after it secures the last tranche in August, having gone through a decade of austerity and belt-tightening that has inflicted much hardship on its people.

Chinese Premier Li Keqiang in June 2014 examining a map at the port of Piraeus, the facilities of which are now entirely controlled by Chinese shipping giant Cosco.   © Reuters

Dragasakis said that Greece plans to build a cash buffer of up to 20 billion euros in anticipation of further financial turbulence and ahead of the bailout expiry. He said Greece will secure 9 billion euros through loans from the eurozone and the rest through the issuancce of government bonds, the details of which will be announced this month.

China has swooped down in recent years to buy Greek assets. For example, state-owned State Grid Corp. acquired a 24% stake in Greece's state-run power grid operator ADMIE in 2017, and Chinese conglomerate Fosun International is participating in a consortium of investors from Greece and Abu Dhabi in backing a redevelopment project outside Athens.

Dragasakis said the Piraeus port has seen an increase in the volume of cargo handled but that it is too early for an evaluation of the impact of Cosco's investment. According to the deputy prime minister, the government doesn't see the port and country itself only as a transport hub but wants to establish production and processing bases that will create added value.

He said Chinese investors, including private companies, were still interested in Greek assets. "Many Chinese companies are [still] looking around," he said.

China has called on countries in Eastern Europe and the U.K. to sign a memorandum of understanding to support its BRI. On this, Dragasakis said, "At this point we haven't signed such an MoU with China."

Signs of China and India tussling for power are also emerging in Greece. Dragasakis pointed to India's GMR Infrastructure, which is helping to develop and operate an airport on the southern Greek island of Crete. The move is seen countering China's expansionary ways.

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