Föhrenbergkreis Finanzwirtschaft

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Cosco Deal Final – At Long Last!

Posted by hkarner - 4. Juli 2016

Sunday, July 3, 2016, Observing GreeceKastner

For several years now have I been stating my view that the Cosco investment at Piraeus is arguably a prototype of the foreign investment which Greece should attract: no short-term cash milking; instead, longer-term investments with longer-term perspectives and longer-term contributions to the Greek GDP.

Long before SYRIZA, leftist Greek politicians had criticized Cosco as a classic example of Chinese sweat shops being introduced to Greece. When SYRIZA assumed power, it seemed like one of their top priorities would be to reverse the Cosco investment (but certainly not allow an expansion).

It did not require much from the Chinese side. Only a few reminders from China what they meant by old friend status had a magic mind-changing effect on SYRIZA. Negotiations were quickly started and in April of this year the deal was signed: Cosco will buy 51% of Piraeus for 280,5 MEUR and another 16% for 88 MEUR after 5 years and once Cosco completes investments of 350 MEUR over the next decade.

A few days ago, the Greek shipping ministry submitted to parliament for approval the terms of the Cosco deal. Only one slight glitch happened: Cosco immediately sent an email stating that „the content of the specific plan is a complete reverse of what was agreed between Cosco HK and Taiped“. Ouch!

At first, shipping minister Theodoridis Dritsas misjudged the situation and said that while there were differences, the government had the right to make changes. That must have prompted another few phone calls from the Chinese side.

And then things happened quickly: one day before PM Tsipras‘ departure to China, parliament ratified the Cosco deal with 223 votes (out of 300). And the alterations which the shipping ministry had made? No longer a problem, they were all rectified.

I don’t consider this as an embarrassment. Instead, it is a terrible faux-pas which sheds bad light on the intentions of the Greek government which obviously ignored the 11th commandment („Don’t get caught!“). And it also questions the government’s international wherewithall when they don’t know that a foreign investor will always closely monitor how their cases are treated in parliament.

 

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