China-Greece Relation in an Unabated Momentum

The Online Investment Forum on 4th June, 2020 was another occasion when Greek government’s determination for an unfaltering commitment to cooperation with China was made building on their successful cooperation in Piraeus port. This was made clear by the address of the Greek Development and Investment Minister, Adonis Georgriadis when he said that “We are very happy with the Chinese presence in Greece, very proud of our cooperation in Piraeus port. We want to go forward with the master plan of the upgrade of Greece’s largest harbour.” He further added that “We continue even faster and stronger than before to make our ties stronger.” The Minister remarked that the pandemic and their common response have strengthened their cooperation further. The Chinese ambassador to Greece, Zhang Qiyue complemented the tune of cooperation that Greece is the important BRI partner and both sides have a strong desire to strengthen the cooperation for the mutual benefits of people of the two countries.

The pandemic diplomacy is deepening the threads of cooperation. Huge loads of medical supplies around 18 tons arrived Athens on 21st March. “Greece is in constant contact with China, cooperating closely to address the common challenge of the new coronavirus pandemic” said the Alternate Minister of Foreign Affairs, Miltiadis Varvitsiotis. He further added that Greece will continue with this strategic partnership in the future as well.

The policy of “Golden Visa” is a unique step of the Greek government to encourage investment in the country. The programme was launched in July, 2013 which grants a five year residency visa in return for an investment in real estate. It does not require minimum stay and children upto 21 years are included in the family applications. The visa can be renewed every five years without any minimum stay condition and citizenship can be granted after seven years of residency only. The Chinese investors have used the policy in a large scale. As per the statistics of the Greek Ministry of Migration and Asylum, some 86 percent of Golden Visas issued in the year 2019 was availed by the Chinese up from around 40 percent two years ago. The related new additional changes like 22 percent reduction in property tax and a 50 percent reduction on renovation tax and a new flat tax by cutting the global tax as they have become local tax resident have made more attractive. Thus the visa policy has created a convenient condition to get ‘citizenship by investment’ by extension EU residency and citizenship as well. There is considerable rise among the Chinese investors in Greece and expect a prosperous decade of 2020s.

With the economic problems, Greece is in serious consideration to remain in the European Union as the poorest country using the Euro and highest unemployment rate of the bloc. However, its EU membership works as an incentive to the Chinese to gain the European Residency by getting the Greece Residency. Gradually, the issue has attracted the concerns of the EU authorities about security risk involved in the programme. The issue was raised by the European Commissioner for Justice, Didier Reynders in his address to the European Parliament and warned against the risky investors availing the residency or citizenship.

For centuries, port Piraeus has played pivotal role in economic prosperity of Greece. With the Chinese control of the port after 2016 (51 percent stake and can be raised upto 67 percent) the port has soon become the second-biggest container port in the Mediterranean and the biggest passenger port of Europe. The China Ocean Shipping Company (COSCO) investment is considered as a winning option among the Greeks as it has retained the previous employees and thus it has managed to boost the employment. For the Chinese, Piraeus represents the Mediterranean hub of its global geo-economic strategy based of its Belt and Road Initiative. However, it faces the opposition and scrutiny of the United States and its allies in Europe who perceive it as an extremely worrisome Chinese foothold and its subsequent expanding influence tentacles in the West.

The responses in Greece are also not unanimous. There are numerous forms of opposition and voices of scepticism to criticism regarding increasing Chinese relation with Greece and their implications. In Aril 2019, a powerful obstacle to the Chinese expansion plan in Piraeus to add warehouses, expensive cruise-ship terminal and luxury hotels came from the Central Archaeological Council and Museum when it declared the area an archaeological site. The additional investment of around $880 million was therefore stalled. Thus the amount remained frozen under the Left wing Sryiza (Synaspismos Rizospastikis Aristeras/ Coalition of Radical Left) government. Along with the Central and Eastern European countries, Greece has become the part of 17+1 (the 1 represents China) which has rung the alarm bell both in Washington and the EU headquarter, Brussels. Greece remains part of EU and has received huge sum of European bailout money. Some media reports suggest therefore that the announcement of archaeological body is purely political, an action to satisfy the concerns of the US and EU. The concern appears to be obvious with the remark of Johannes Hahn, the EU commissioner for Budget and Administration that Europe has to be careful of Chinese “Trojan horses” which Beijing has been creating by its economic clout through its investments to have political sway over European countries. Back in 2017, the European Union failed to pass a statement condemning the persecution of dissidents by the Chinese government as Greece blocked that resolution.

The coming of the New Democracy party under the Prime Ministership of Kriakos Mitsotakis has turned Greece once again favourable to China. To highlight the convergence of interests in maritime trade, at the China International Import Expo in Sanghai, the Greek Prime Minister, Mitsotakis said on 5th November, 2019 that “We are a nation of seafarers” and therefore our cooperation seem to be natural. He further added that the relationship is mutually beneficial and reinforcing. To address the concerns of the EU and US very tactfully he highlighted that “If Chinese are doing this, then the American can also do it, the French, the Germans, the Swiss, the Italians can do it.”

The central concern of the EU is that its members should not be sucked into a superpower geopolitical rivalry of the US and China. The dominant argument emphasises the need of having their own collective and independent policy and position towards China. But this understanding has failed to develop necessary agreement of members so far. The EU foreign policy Chief, Josep Borrel called the current state of China policy of the EU as ‘Sinatra Doctrine’. Way back in 1989,then Soviet foreign Ministry Spokesperson, Gennadi I. Gerasimov called the Soviet policy towards Warsaw Pact nations as ‘Sinatra Doctrine’-they can do things their way. The origin of this euphemism goes back to the song written for Sinatra by Paul Anka, “I did it my way” a big American pop hit in early 1969. Given the political trend in Greece and its economic exigencies the Chinese are there to stay and grow for sure. The EU lacks the necessary political cohesion and economic strength which seems to have further been accentuated with the ambivalence in US commitments and NATO squabbles. However, a sincere analysis makes it apparent that the concern in Europe lingers on given the asymmetry between China and Greece.

Dr.Khushnam P N
Dr.Khushnam P N
Independent IR and Regional Security Researcher & Analyst, Bengaluru, India