Government U-turn after Cosco fiasco

Prime Minister Alexis Tsipras heads off for a state visit to China Friday after his government tried frantically Thursday to put out a fire that started when Chinese shipping giant Cosco raised objections to “unilateral” changes to the agreement for the sale of a majority stake in Piraeus Port Authority (OLP) that was submitted for ratification to Parliament on Tuesday.

Fearing that the latest fiasco would cast a shadow over the Beijing visit – which Tsipras hopes will help pave the way for further deals and investments – the government backtracked Thursday on the changes it made to the agreement that had angered the Chinese company.

Cosco had accused the government and the country’s privatization agency, TAIPED, of reversing what was agreed in the deal between the two sides on April 8, warning it would not accept any changes, sending shock waves that the agreement – under which Cosco would buy a 67 percent majority stake in OLP – would unravel at the eleventh hour.

More than strictly a fallout over a business deal, the government was reportedly concerned that the complication would further damage the country’s international standing at a time when it is trying to signal to international markets and investors that Greece has embarked on a new course and is doing what must be done to lure desperately needed foreign capital to kick-start the country’s debt-ridden economy.

The government insisted Thursday that the whole issue had been blown out of proportion,while senior officials alleged that the main concerns of some of Cosco’s Greek executives were not the company’s best interests but rather playing political games against the government.

However, the parties of the opposition called the issue a “fiasco,” and held it up as yet more proof that the government is incapable of pushing through reforms and privatizations.

“Never in the history of Parliament has a government gone back on its signature on a bilateral agreement,” New Democracy leader Kyriakos Mitsotakis told the House, holding Tsipras responsible for the government’s “erratic” policies.

Conservative spokesman Giorgos Koumoutsakos echoed the same sentiment, saying, “Erratic policies on investment and privatizations kill off any possibility of economic growth,” while adding that “incompetence and unreliability drive away investments.”

“This undermines growth,” he said.