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It’s not all smooth on new ‘Silk Road’ as Greece tackles Chinese partnership

Greek Prime Minister Antonis Samaras, right, and Chinese Prime Minister Li Keqiang, second right, look on during the inauguration of a train line for containers at the port of Piraeus, where Chinese shipping giant Cosco controls two of the three container terminals, on Friday June 20, 2014.

Louisa Gouliamaki/The Associated Press

A high wall topped with barbed wire rises up along the straight coastal road that leads to the checkpoint entry to the Athenian port operations of COSCO, the Chinese state-owned shipping company. It looks a bit like the defensive fortifications built around the Aegean centuries ago by the Romans, Venetians and Turks, except that this wall exists to keep out unwanted locals.

The port at Piraeus, which hums with passenger vessels during the tourist season, was floundering in the container trade till COSCO – the China Ocean Shipping Company Group – bought its 35-year lease in 2008 for nearly €5-billion. Now the containers lie thickly on its two piers, where gigantic straddle cranes have boosted volumes shipped at Piraeus to about seven times what they were before the Chinese arrived.

These port operations are part of a new "Silk Road" – an integrated delivery chain that will put containers arriving at Greek ports from China onto COSCO-controlled rail lines headed for Europe. In October, COSCO established a "co-operative partnership" with TrainOSE, the state-owned Greek railway, to speed up its access to central and eastern Europe. On Dec. 26, the Chinese government committed to building a joint-venture railway between Budapest and Belgrade. It's a sweet reversal of how, a century ago, Europeans muscled into an economically enfeebled China to build the country's first significant railways.

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COSCO's Greek adventure, which has not been cheered by all, represents the productive side of the issue that has dominated Greek politics for at least 20 years: what to do about foreign capital and financial power. The Jan. 25 national election is turning into a virtual referendum on how to deal with the country's foreign debt, which could have implications for all foreign capital in Greece. In essence, the country is deciding how much self-determination it dares to take back from the foreigners who have been running the show. It's doing so at a time when xenophobia is a real force in Greek life, as expressed by the 18 seats held in the last parliament by the neo-Nazi Golden Dawn party.

The left-wing opposition Syriza coalition, which holds a narrow lead in recent polling, wants to abolish the EU-imposed austerity program accepted by the government of Prime Minister Antonis Samaras. In a piece he wrote for Monday's Huffington Post, Syriza leader Alexis Tsipras said that most of the debt has to be written off and a moratorium imposed for repayment of the rest, to allow for economic growth. But Syriza is far from courting big foreign investors the way recent centre-right governments have. COSCO was allowed to set up a non-unionized shop at Piraeus, to the fury of unionized dockworkers and Syriza.

During a brief workers' strike in July, Theodoros Dritsas, Syriza's parliamentary spokesman and member for Piraeus, said that labour conditions at COSCO's port were "unacceptable" and "no investor should be allowed to set up a colony in democratic Greece." COSCO workers were working excessive shifts and were exposed to unnecessary dangers on the job, according to OMYLE, the port union. Better conditions for workers are an essential plank in the party's "Thessaloniki program," which Mr. Tsipras has been touting since he proclaimed it in a speech in Thessaloniki in September.

But many have noted a shifting range of views in Mr. Tsipras's policy statements, which may be traceable to the diversity of the leftist groups that formed Syriza 18 months ago. As for what he might do in office, some critics point to the example of former prime minister Andreas Papandreou, who won the 1981 election by promising to quit NATO and shutter U.S. military bases, but reversed those positions once in power.

The government says that COSCO must obey Greek law and points to the 1,000 jobs created in Piraeus since the company arrived, in a country where the unemployment rate hovers around 26 per cent. One worker at the port, who preferred not to be named, said conditions at the former unionized operation weren't always equitable either.

"If you weren't connected to the family that ran it, you couldn't get a job," he said. COSCO did not respond to requests for an interview.

"All things considered, COSCO's passage to Piraeus has been a positive development," says Yanis Varoufakis, an economist at Athens University who, like Syriza, has been sharply critical of Mr. Samaras's austerity policy. "My concern is that the Chinese 'invasion' has not been large enough. For instance, I think the government should have offered them Greek railways too, for €1, as long as the Chinese commit to linking the ports of Patras and Piraeus with the rest of Europe through fast-rail links."

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Golden Dawn-style xenophobia has been a factor in Piraeus in the past, as shown by the "Chinese go home!" banners at the port when COSCO first arrived. But Prof. Varoufakis says that the real problem is "ignorance in Greece of what is going on in China today. Many assume, falsely, that it is all about squeezing labour to death in order to accumulate capital, neglecting the substantial improvements in technology and living standards accomplished by the Chinese."

Golden Dawn's website warns of the dangers of foreign capital and praises "employers with a Greek soul." But the wealthy Greek ship-owners whose vessels dot the horizon around Piraeus are much resented in Greece for their dexterity at avoiding taxes other Greeks must pay. An unexpected new tax on shipping tonnage earlier this year enraged the Hellenic Chamber of Shipping, but played on the street almost as a populist measure.

Investors from China and northern Europe have been shopping for assets throughout economically troubled parts of the eurozone, including Portugal, Spain and Ireland. In November, the Greek government awarded a €1.234-billion concession to a German consortium to run 14 regional airports for the next 40 years.

Some Greeks may grumble at the irony of that deal, given the hard-line attitude often shown by the German government toward Greece's troubles. But foreigners, their money and their demands will continue to be a reality of life in the country no matter who wins on Jan. 25. And if the Chinese continue to put up walls around their bustling enterprises, many Greeks might prefer to be inside than out.

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About the Author

Robert Everett-Green is a feature writer at The Globe and Mail. He was born in Edmonton and grew up there and on a farm in eastern Alberta. He was a professional musician for several years before leaving that task to better hands. More

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