The meeting between Greek Prime Minister Alexis Tsipras and Chinese President Xi Jinping in New York outlined the decision of both sides to strengthen their co-operation. Smooth economic and business co-operation between the two countries, however, should not be taken for granted. This will highly depend on the course of privatisations as this is the decisive factor for a potential increase of Chinese investments in Greece. In thar regard, the privatisation of Piraeus Port Authority is of high significance. Three companies will compete for a 51% stake at the beginning and a remaining 16.5% at a later stages. These are COSCO, APM Terminals and International Container Terminal Services. The Greek government will make its final decision after the submission of final offers by the end of the month.
If COSCO wins the bid, a monopoly issue will be raised taking into account that the Chinese company already controls piers II and III in the Port of Piraeus. However, the simultaneous privatisation of Thessaloniki Port Authority, which COSCO‘s competitors will bid for, might theoretically give a solution to the danger of limited competition at the local level. Additionally, some voices also echo concerns about a possible violation of European competition law. The Journal of Commerce explains explicitly though that the European Union has no common policy for the ports and therefore ports themselves can decide on the matter without guidance from the European Commission.
Some efforts are currently taking place at the EU level to pass a new law which will require from member states to have at least two providers of port services. This directive is rejected by UK ports which are principally controlled by a single company. This said, the whole debate certainly affects Europe and not only Greece.
The risk for Greece to be accused by the European Commission for subsisiding COSCO should not be excluded. A few months ago, for example, the European Commission concluded that certain fiscal benefits granted by the Greek government in favour of COSCO provided the beneficiaries with an undue advantage over their competitors in breach of EU state aid rules. These benefits include tax exemptions and preferential accounting treatment. It subsequently asked the Greek government to recover losses. This issue remains unsettled.
