The Greek government has now missed a crucial debt repayment of €1.6bn due to the International Monetary Fund (IMF) after talks broke down acrimoniously, with blame laid by both sides for the failure to reach an agreement.
The left-wing Syriza government led by Alexis Tsipras has repeatedly stood against austerity measures imposed by Brussels in the belief that Greece was too big to lose but the latest breakdown in talks threatens the real possibility that Greece may leave.
China watches with trepidation
It is not only officials in Brussels that are apprehensive but also Chinese investors. China has invested heavily in the country’s port sector as part of its ambitious $41 billion ‘Maritime Silk Road’ project, which aims to strengthen its presence from Asia through Southeastern Europe.
According to research consultancies Baker & McKenzie and the Rhodium Group, Chinese investment in the country increased from $2 billion in 2010 to a massive $18 billion in 2014.
As one of the key shipping nation’s on the Mediterranean, Greece has traditionally played an important role in the transport of goods to and from Europe and as such seemed the obvious point for China to strengthen its presence.
Although the Greek government is still keen to sell China’s Cosco group a 67% stake in the Piraeus Port Authority (PPA) the extent of the uncertainty at the macro-economic scale makes it increasingly unclear exactly what it is Cosco is buying. As a result, Chinese media has been wary, warning of the dangers of "a lack of “political stability” and poor, administrative management.
The PPA currently runs Pier I at the port while Cosco operates Pier II and III via its subsidiary Piraeus Container Terminal (PCT). Strong links with Asia have helped volumes at the port increase eight-fold since 2008.
Development work is currently planned to expand capacity of Piers II and III at the port to 6.2 million TEUs annually from 3.7 million. Upgrade work is also planned to improve infrastructure and rail links between Piraeus and European destinations such as Austria, Hungary, the Czech Republic and Slovakia.