The “Dragon’s Head” – Greece’s place in the Chinese Belt and Road Initiative

Dragons are common symbols of formidable and auspicious powers in Chinese culture. In China’s New Silk Road, the “dragon’s head” is the Greek Port of Piraeus, as President Xi put it. Greece’s largest and Europe’s seventh-largest port has become the cornerstone of multifaceted and growing Chinese investment in the country. But despite triumphal cries, whether the Chinese will bring the Golden Fleece to the Greeks remains to be seen.

President Xi Xinping introduced the “Belt and Road Initiative” (BRI), a massive infrastructure programme expanding China’s influence from East Asia to Europe, in 2013. The Chinese were far-sighted enough, however, to have already secured the vital stronghold for this plan back in 2008 by establishing a foothold in the Greek Port of Piraeus—even before the Troika forced debt-ridden Greece to sell off public property on a massive scale.

Piraeus’s geographical position at the crossroads of three continents provided the Chinese with the ideal gateway to Europe—China’s second largest trading partner, especially given that over 80percent of China’s trade with the EU depends on maritime routes. Compared to northern European ports, Piraeus saves China one week of sailing, not to mention a lot of money.

Greek-Chinese cooperation has been deepening since 2008, even sparking fears of Greece becoming China’s “Trojan Horse” in Europe. These fears were enhanced when Greece blocked two EU and one UN resolution condemning China. The already close cooperation was “sealed” in 2018 when the two countries signed a Memorandum of Understanding to jointly advance construction of the Belt and Road Initiative, and a year later when Greece officially joined China’s 16+1 Initiative with Central and Eastern European Countries, thereby making it 17+1.

From taking full control of the port in 2016 to strategic infrastructure investments and massive property purchases, it is estimated that in the past few years Chinese capital invested in the Greek economy amounts to more than 7.5 billion euro, with 1.8 billion invested in Piraeus alone. But have the Greeks benefited accordingly?

A Story with Two Sides

In 2008, the state-owned China Ocean Shipping Company (COSCO), the world’s third-biggest container shipping company by volume, acquired half of the Port of Piraeus (Piers II and III) on a 35-year lease for 490 million euro.In 2016, when privatizations in the country had already taken off, Greece finally sold its largest port for 280.5 million euro, ceding 51 percent to COSCO, which effectively took control of the Piraeus Port Authority (OLP) and the third remaining container terminal (Pier I) until 2052. The largest passenger port in Europe with 20 million passengers annually was now Chinese. The 368.5-million-euro deal stipulated that COSCO would receive another 16 percent after five years, provided it completed investments worth 350 million euro over the next decade.

Under the Chinese, the port’s profitability has risen dramatically, and 3,000 jobs have allegedly been created. In 2019, Piraeus became the top container-handling port in the Mediterranean, and the Greek state collected 5.4 million euro in concession fees. But have Greek workers shared in the success?

COSCO subsidiary Piraeus Container Terminal (PCT) was founded in 2009 to run the Chinese-controlled Piers II and III. It hired the vast majority of its employees via outsourcing. Dock works were assigned to Chinese company D-Port, which in turn subcontracted the labour out to several companies. Extensive outsourcing effectively undermines labour rights: the main company is obscured and workers and their organizations are fragmented. Even labour regulations and collective bargaining agreements can in this way become empty shells.

Former PCT CEO Fu Cheng Qui, also known as “Captain Fu”, once told German magazine Der Spiegel that “I am a socialist… I can understand workers completely.” An ex-employee who reported abysmal working conditions in the Chinese part of the port and was allegedly fired for trying to raise concerns about safety violations and promote a workers’ committee would disagree. He sued COSCO in 2012. Urinating in bottles due to a lack of toilet breaks, horrendous safety conditions, and being called to work at the last minute were among his accusationsReports verifiedsuch accounts. Dock workers addressed an open letter to the Greek president in 2013 voicing similar concerns.

COSCO employees went on their first-ever strike in July 2014, called by a general assembly. They worked up to 16 hours daily and claimed that work accidents were not registered. Apparently to avoid paying them the proper wage, dozens were registered as “figs and raisins packaging workers”. The workers managed to found a union, the Union of Container Handling Workers in Piraeus Port (ENEDEP), in 2014. Through negotiations and strikes, the union achieved improvements like breaks, a minimum daily wage, and minimum monthly wages. Until then, every subcontractor paid workers according to a different wage system. However, daily wages remain fixed—not taking into account weekends and holidays.

In 2017, shortly after the Chinese took full control of OLP and Pier I, a new OLP General StaffLabour Regulation extended working time from 7.5 hours per day and 37.5 per week to 8 and 40, respectively, while providing for a seven-day work week without extra pay on weekends or holidays, “flexible” forms of labour, and simplified lay-offs. Critics argue this regulation paved the way for extending subcontracting in Pier I.

That said, COSCO does not operate in a legal vacuum. For example, in February 2017 the SYRIZA government in power at the time passed a bill exempting workers in OLP and other privatized ports from the National Registry of Dockworkers, denying them benefits such as being included in heavy and health hazardous occupations (VAE). Following a series of strikes (COSCO subcontractors resorted to local courts, which declared most illegal) in 2018, ENEDEP succeeded in including all dockworkers in VAE by ministerial decree. Yet not only has decree enforcement been delayed, but the Hellenic Federation of Enterprises (SEV) filed an application for the decree’s revocation for dock workers at Piers II and III with Greece’s Supreme Administrative Court. The case is still pending.

Strikes also sought to win a collective bargaining agreement, but D-Port refused to negotiate with ENEDEP. Workers accused D-Port of setting up its own “union” that then signed an agreement reinforcing the status quo. Even threats against unionists’ lives and physical wellbeing have been reported, including a “murderous attack” against ENEDEP president by a D-Port security supervisor—who was not fired.

In April 2020, amidst the COVID-19 pandemic, COSCO decided to proceed with the “operational unification” of Piers II and III with Pier I, assigning the management of the latter (until then under OLP) to PCT. OLP employees reacted, fearing downgrading of their working conditions. The signing of the second collective bargaining agreement for OLP employees has also been delayed, sparking similar fears. The employer’s intentions are quite obvious, as already in June 2020 COSCOpublished an open invitation for a subcontractor to undertake certain services in Pier I.

Nevertheless, COSCO is not the only actor to blame. As the General Confederation of Greek Workers Labour Institute (INE-GSEE) verified in a 2020 report, in Greece “fundamental labour rights have been thwarted” and “a de facto abolishment of the eight-hour workday has been imposed”—the result ofa decade ofcrisis and memorandums. Currently, the New Democracy government is preparing a bill to effectively abolish the eight-hour/five-day work week and attack trade unions.

COSCO has also initiated plans to construct a shipyard in Piraeus, although this reportedly defies both the licensing agreement and environmental legislation. A local industry of some 450 ship-repairing companies and 1,500 suppliers employing roughly 27,000 people has turned fiercely against COSCO. OLP claims it is acting to revive ship-repairing activity in Piraeus, which has doubled since 2016 allegedly due to COSCO investments in infrastructure. The front grew when all ship-repairing employers’ associations aligned with the Hellenic Shortsea Shipowners’ Associationto press OLP to lower its recently increased prices.

Unsustainable Non-Development

In 2018, COSCO presented its 600-million-euro Port of Piraeus “Master Plan”, largely approved by Greek authorities. The construction of the new cruise ship terminal in the southern zone of Piraeus for 136 million euro is undoubtedly the cornerstone of this plan, which includes giant hotels, passenger terminals, a museum, and more. However, 95 percent of the terminal’s cost is to be covered by EU funds through the NSRF—not by COSCO itself.

The terminal will be able to receive up to four cruise ships, each more than 400 metres long. Environmentally dubious as it may sound, the project was nevertheless officially launched in February 2020. OLP started work in April, amidst the pandemic, claiming to have obtained full authorization by two ministerial decisions (2013, 2018). Reactions were immediate and fierce, as the project reportedly lacks the required Strategic Environmental Assessment (SEA) and Environmental Impact Assessment (EIA). A Greek ombudsman report in April 2020 emphasized that “launching of extension works for the passenger dock is at least of dubious legality” and should therefore be suspended until licensing concludes.

On 6 May, the Archipelagos Institute of Marine Conservation issued a statement concerning the ongoing dredging for the project, claiming that the “uncontrolled dumping of thousands of tons of toxic sediment in the fishing areas of the Saronic Gulf … poses a dramatic risk for the ecosystems and public health”. Most opposition parties (DiEM25SYRIZAKINAL) brought the issue to parliament. In June 2020, Greece’s Supreme Administrative Court temporarily suspended dredging (but not dumping of dredged material, as later clarified). Nevertheless, citizens reported similar activity in July.

There is insufficient data to estimate air pollution from cruise ships, while cruising is expected tosignificantly exacerbate the already-acute traffic problem in Piraeus. Moreover, in 2019, Greece’s Central Archaeological Council rejected the section of the “master plan” referring to a shopping mall, a floating ship repair dock, and a giant luxury hotel on the grounds that they could affect antiquities in this historic area. COSCO’s “master plan” could make Piraeus an unliveable city, serving as a mere “backdrop” to the port.

If that were not enough already, an earlier issue has further exacerbated public distrust. When COSCO’s construction of the new Oil Pier was concluded in 2017, it revived—in conjunction with the much increased container traffic—the prospect of reactivating all 149 refuelling tanks in the port, including long inactive ones. Relocation of the tanks has been a longstanding demand of the local community, as they are built just metres away from houses and schools. Residents inhale “poison, diesel, and chemicals” and live in fear of possible fires. According to a National Technical University report, however, the new Oil Pier means the tanks will more or less stay where they are. The government allegedly assisted this with a 2018 law favouring the oil companies running the tanks. The local community was once again ignored.

Changing Real-Estate Landscape

The Chinese have also penetrated the Greek property market through the so-called “Golden Visa” scheme. Introduced in 2013 amidst the Greek financial crisis, the scheme gives five-year residence permits to third-country citizens who buy 250,000 euro or more worth of property. By March 2020, 18,603 Chinese had obtained the permit, far outnumbering other nationalities. Out of 6,304 “Golden Visas” in 2019, 4,371 went to Chinese citizens. They purchase property mainly in the expensive Attika region, or buy land and construct property to then sell or rent.

The European Parliament and Commission have turned against the scheme, which is now halted due to the pandemic. Nevertheless, its effects are already being felt. The market has revived, but property prices and rents have risen. Homeowners have benefited while crisis-stricken renters are being priced out and “exiled” from working-class neighbourhoods as investors move in. Combined with AirBnB, visas have enhanced an ongoing housing crisis.

A Win-Win Situation?

Greece and China signed 16 memorandums of cooperation in November 2019 alone, most notably for new Chinese energy investments in Greece. These include the establishment of an Athenian branch of the Industrial and Commercial Bank of China to finance renewable energy resources, a 50 megawatt solar power station on the island of Crete to be built with technical expertise from the China Energy Engineering Group, and an undersea power cable to facilitate electricity transmission between Attika and Crete. Recent reports indicate at least 1 billion euro from China being invested in producing energy from Greek garbage. The Chinese state-owned State Grid Corporation has owned 24 percent of the Greek Independent Power and Transmission Operator (IPTO) since 2017—and competes to increase its shares in light of further privatization.

All of these investments, as well as the uncomfortable realities behind them, demonstrate that impressive project titles and statistics alone only tell half of the story, such as when Chinese banks extend 2.5 billion euro in loans to Greek shipowners, but the media fails to clarify that the funds are for building ships in Chinese shipyards. Since Chinese investment in Greece began picking up over a decade ago, the country has indeed lived through an Odyssey. Yet the Golden Fleece that COSCO chairman Xu Lirong promised the Greeks often ends up in other hands.

Photo by Vassileios Asvestopoulos

Despina Papageorgiou