February 5, 2015 12:00 am JST
Itsuo Toshima: Greece's crisis, China's chance?
Europe will never let Greece leave the eurozone without a fight. The reason? Geopolitical risk. The Balkan Peninsula is in a key strategic position -- the eastern gateway to the Mediterranean for Asian nations.
"China is busy buying airports and ports in our country," a man in Athens said. One of China's biggest state-run shipping companies, known as Cosco, recently signed a 35-year, 3.4 billion euro ($3.83 billion) concession deal for container terminals in Piraeus, a port city within the Athens metropolitan area. Cosco also bought facilities for land transportation and packing near Piraeus, expanding the port's transshipment capacity. The Chinese company is now reportedly angling for a 23% stake in the port's operator.
Cosco moved to acquire a port in Crete, and it faced widespread public opposition over its bid for the port of Thessaloniki, the second-largest city in Greece. Flexing its financial muscle, China offered the Greek government 500 million euros for a 20-year concession contract for Athens International Airport, beginning in 2026.
Some fear China is on a buying spree for Greek infrastructure, taking advantage of the country's unrest. A sense of caution toward the Chinese appears to be growing. In Piraeus, for example, wage negotiations between Chinese employers and local workers are deadlocked.
During a visit to Greece, former Chinese Premier Wen Jiabao said, "Good friends are there to help when someone is in trouble." Meanwhile, local newspapers said that China was "breaking into" Greece. In Athens, it seemed that this fear and the resulting geopolitical reality are what have kept NATO and Germany from simply cutting ties with Greece.
Chinese officials must be chuckling over fears Greece will exit the eurozone, as well as over the political turmoil bound to erupt after the Coalition of the Radical Left, or Syriza, swept to victory in the country's general election on Jan. 25.
National gloom
The lesson from the Greek debt crisis is that a borrower can be a winner if it owes far more than it can repay. The country is developing a "you can't give what you don't have" attitude -- when Greece received its second bailout and avoided a default, local newspapers called it a "victory of perseverance."
For many Greeks, their identity is more strongly linked to their city or region than to the nation as a whole. This is partly due to Greece's history as a collection of city-states, such as Athens and Sparta.
Disillusionment with national politics is another.
"Ever since the dictatorship ended, this country has seen two main political parties take turns in the prime minister's seat," one Athens citizen said. "Political power is entrenched and corruption is everywhere."
According to the citizen: "Many people feel that they are fine as long as their own yard is well-maintained. They do not care about other people's yards. For this reason, there is little willingness to unite to get through a crisis."
Toughing it out
The struggle on the ground goes on.
In one family, the mother is a supporter and the daughter an opponent of Greece's exit from the eurozone. But they both fear that further measures under the current policy of austerity would render them homeless.
The daughter is a dentist. The clinic she works for was open but has no patients, as people don't have the money to spare for a visit to the dentist. The family's house is a typical, comfortable middle-class home, but its toilet is broken and it does not have running water.
And yet, that family is relatively well-off. A couple in their 40s said they have both lost their jobs and their savings will dry up in six months. They added they will probably end up relying on food handouts from churches.
The divide between winners and losers is clear in countries that have encountered a financial crisis. Not all citizens are suffering from poverty, and of course the privileged will always do fine. But among average income earners, the winners are people who saved their money carefully. This may be a good lesson for citizens of other countries.
Itsuo Toshima is an independent investment adviser based in Tokyo and a former Japan representative of the World Gold Council.
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