Page last updated at 07:37 GMT, Saturday, 25 June 2011 08:37 UK

Could Chinese investment rescue ailing Greece?

Pireaus port

By Chris Morris
BBC News, Greece

European Union leaders have told Greece more spending cuts and tax hikes are preconditions for a second massive bail-out - but privatisation, and investment from Asia's roaring economies, could also help to plug holes in the budget.

The port of Piraeus is best known as the tourist gateway to the Greek islands - route one to the sun.

But as you drive down through the industrial outskirts of southern Athens, it is not the passenger ferries that catch the eye.

It is the line of orange cranes that loom above the container port.

"That's Chinatown," says union leader Sotiris Poulikoyiannis, as we sit in his office close to the water's edge.

Last year China's state-owned shipping company Cosco took control of most of the port, Greece's largest container facility.

Communist-affiliated strikers in Piraeus
About 20% of union members have had their electricity cut off at home... some have had water supplies cut off as well

It is also probably China's largest investment in Europe.

So could this be one way out of Greece's economic crisis?

Not loans from Europe, but investment from the rapidly growing economic giants of Asia.

With the Greek government promising a multi-billion-pound privatisation programme, there are certainly opportunities for governments and companies with money to spend.

But people like Mr Poulikoyiannis worry that Greece may be forced to sell off the family silver at knockdown prices.

"We're all trying to learn Chinese now," he says with only half a smile.

"We all have to do it, all of Europe. You too."

'Biting deep'

There is no union recognition in the Chinese-run port, and for the mechanics and metal-workers whose lives have been built around the ship repair yards, times are hard.

As Greece struggles with the sovereign debt crisis which is threatening the stability of the entire Eurozone, austerity is biting deep.

What we want to avoid is selling off our primary assets for nothing
Advisor to Greek PM

And the shipyards of Piraeus are on the front line.

About 20% of union members have had their electricity cut off at home. Some have had water supplies cut off as well. Rather like their country, they are struggling to pay the bills.

But there are no European loans on offer here to bail them out.

The union says more than 6,000 people used to work in the repair yards before the economic crisis began in 2008. Now there is only enough work for about 300 people a day.

Many Greek owners, they say, are sending their ships off to be repaired in China.

"We get 90 euros a day including overtime," Mr Poulikoyiannis says, pointing at a hand-written chart pinned to the wall.

"And if people get five days of work a month, they think that's a good month."

"In the past year we've taken a very strong hit. There's no activity. Never mind all this water - it's like a desert."

Sell-off 'frustration'

Outside his prefabricated office, four dogs are asleep in the shade. Nearby there is a monument portraying a mechanic holding a spanner in his outstretched hand.

This is a communist union and its monument is dedicated to comrades who have died in industrial accidents.

"Murdered by employers," the inscription reads, "on the altar of profit."


The plan is expected to raise at least 1bn euros (£837m; $1.2bn) a year

The measures include selling 49% of the country's rail company OSE, 39% of its postal service and stakes in two regional water companies

Part privatisation of parts of the Greek public sector was agreed as part of a massive bail-out plan by the EU and the International Monetary Fund earlier this year

The employers would, naturally, beg to differ.

If the unions did not go on strike so much, they say, maybe more investment would actually arrive.

The government, too, is keen to encourage further interest from China and elsewhere.

Railways, ports, utility companies, hotels, beaches and the sprawling site of the old Athens international airport - complete with abandoned terminal buildings and rusting planes - are to be put up for sale.

But the government and the unions agree on one issue.

"What we want to avoid is selling off our primary assets for nothing," says one close advisor to the prime minister.

"I'm afraid that that is what's about to happen."

And if that is what the inner circle thinks, who can blame the the rest of the country for wondering what comes next?

If the revenues from privatisation are not going to be quite as high as hoped, and if austerity pushes Greece deeper into recession, it is rather hard to see how the economic growth the country needs is ever going to materialise.

So from Piraeus to parliament there is an overwhelming sense of frustration.

"I just think everyone's feeling really stressed," said a middle-aged woman among the crowds which now gather outside parliament almost every evening.

She put a whistle to her mouth and blew it hard to add to the general cacophony.

"I'm not an economist," she said. "But I have to balance the books at home, and I can see this isn't working."

A man walks past carrying a home-made gallows in one hand and a Greek flag in the other.

"Thieves," he shouts, and wanders off.

It suddenly feels rather tempting to head back down to Piraeus to board one of those ferries, and disappear onto a distant island.

But getting away from it all is not an option for Greece at the moment.

The eyes of the world are upon it.

Next week parliament will debate and vote on a further package of austerity measures, in which no-one really seems to believe.

"Those are the days," says Mr Poulikoyiannis, as he gets up to leave his empty union office. "Those will be the hot days on the streets."

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