US ready to invest in Greece, Pyatt tells Kathimerini

Speaking of upcoming investments in Elefsina and Alexandroupoli, US Ambassador to Greece Geoffrey Pyatt has stressed that American companies are ready to co-produce new frigates for the Hellenic Navy.

In an interview with Kathimerini, Pyatt notes that, for Washington, islands have the same footing as the mainland when it comes to continental shelf and exclusive economic zone (EEZ) delineation, while expressing US support for efforts to reduce tension.
 

How are US-Greek and global relations shaping up in the post-epidemic era?

I think it’s really too early to tell how this crisis, certainly the most severe global crisis of our lifetimes, is going to affect international politics. There are some trends that it clearly has accelerated. The clash between China and the West has become sharper as a consequence of how the PRC handled this pandemic and the changes that that is forcing in terms of global supply chains, in terms of how we think about the rivalry with China.

There are other things that won’t change. I disagree with those who suggest that this crisis is going to undo globalization. The reason we are in the mess we are in today is because a disease that should have been contained in Wuhan or Hubei Province was allowed by the authorities in Beijing to spread globally. We’re going to have to work together to manage this pandemic, to deploy whatever vaccine is eventually discovered, but also to make sure that this never happens again because of the huge human and financial costs. There is an analysis by Henry Kissinger, which I subscribe to in terms of the major areas where this will change the international system, but also how it will reinforce the importance of the United States continuing to invest in the system of international institutions and alliances that has been the bedrock of peace and stability in the 70 years since the end of the Second World War.

The US-Greece part of this – I think it’s clear where we are. First of all, we’re enormously fortunate that we had Prime Minister [Kyriakos Mitsotakis] in Washington, DC in January before this mess began – that we had a visit which delivered such a clear message in terms of the two governments’ priorities on the US-Greece relationship and helped to sharpen up our agenda on the work that we need to do going forward, including engagement on technology, advancing the strategic dialogue, reinvesting in the 3+1 and Eastern Mediterranean security, building up our defense and security relationship. It was very powerful to have the prime minister engaging with both [Speaker of the House of Representatives] Nancy Pelosi and President [Donald] Trump, and Secretary [of State Mike] Pompeo and Vice President [Mike] Pence the way he did. It sent a clear message in terms of bipartisan support for Greece as we came into an election year, which is going to be a very difficult election in the United States.

The health emergency made us focus for a couple of months on that aspect of it, and I’m very proud of the cooperation we had with the Ministry of Health, the Ministry of Digital Policy, the Ministry of Citizens’ Protection, as we worked to coordinate our approaches, to make sure that Greece had a clear picture of what was happening in America and the US government had a clear picture of what was happening in Greece.

Now that Greece has begun the process of reopening, we have shifted our priority back to a focus on the economy – how we help Greece to ensure that you have a V-shaped recovery, that you get back to positive growth as quickly as possible. And I think that effort will be helped by a couple of factors: One is the reputational gains that Greece has enjoyed because of its very good management of the pandemic, the way in which Greece exceeded expectations and outperformed many of its European neighbors in terms of managing the disease. But second – and this is the part of the story that hasn’t gotten so much attention – is the really tremendous progress that the government, that the prime minister and Minister [of Digital Governance Kyriakos] Pierakakis and Minister [of Development and Investments Adonis] Georgiadis and others were able to make in the digital transformation of Greece.

The US seems to be interested in strategic infrastructure like that in Alexandroupoli and Elefsina. What is the role of US International Development Finance Corporation (DFC)?

DFC was created by the US Congress in order to give the US government a tool to push back against our great power rivals and in particular to create an alternative to the checkbook diplomacy that China and other rivals have been engaged with through mechanisms like the Belt and Road. When DFC was established, its original focus was in particular developing countries where China, in particular, has done a lot of presenting what looked like attractive loan packages for things like railways or steel mills or power plants.

Starting when I was actually back in Washington in November for the Kathimerini conference, I had an opportunity to meet with Adam Boehler, who is the CEO of Development Finance Corporation, and his team. And we talked a lot about the particular challenge that we face here in Greece as a country which is a member of the eurozone, which is a member of the EU, a developed economy but which China itself has identified as the dragon’s head of the Belt and Road Initiative in Europe. And I underlined to him my view that we need tools like DFC here.

I was very pleased working with some of my colleagues and interlocutors in the US Congress that we were able to achieve support in December for an amendment to US law which specifically authorized DFC to take a financial position in Greece and in developed countries like Greece where there are strategically important projects particularly linked to the energy sector which has been such an important part of the US-Greece cooperative agenda recently.

So DFC is open for business in Greece. One that they have expressed interest in is the Elefsina Shipyards. That’s right now with the Ministry of Development in terms of managing the financial and debt aspects of that project. But we look at Elefsina Shipyards as a model similar to the example on Syros where an American company, Onex, successfully worked with two Greek governments, with [Alexis] Tsipras’ government and with the Mitsotakis government, to bring that shipyard back to life in a way that has been a great success for Syros. I know the workers in the shipyard are very proud of the fact that they’ve been able to apply their skills again, and it would not have happened without Onex and US capital coming in.  

DFC has also prioritized the whole complex of projects around Alexandroupoli. The port privatization, the floating storage regasification unit (FSRU), the Kavala underground storage, the privatization of the Egnatia – all of these are part of this logistics and transportation hub around Alexandroupoli which has also been identified by DFC as a priority. It was welcome news that [state privatization fund] TAIPED announced that the Alexandroupoli privatization will move ahead with the Port of Kavala and that this will be one of the agencies’ priorities as it implements. So DFC is going to be very important to all of that.

Globally, investment will slow down because of the shock of the economic slowdown globally as a result of the pandemic. But the thing to remember is that this has been a symmetrical slowdown. The money has to go somewhere. And certainly as far as DFC is concerned Greece is one of their top priorities in Europe. 

We are talking about projects that can attract funding.

Proceed with both guarantees, loan guarantees, but they can also make capital investments. DFC has a clear mandate to work in the Western Balkans as well. This is why Alexandroupoli is so relevant because projects there connect to things like the proposed gas interconnector with North Macedonia, the prospect of gasification of Serbia. 

Are there any developments with regard to defense cooperation?

We’re going to continue to work on all of these lines of effort. We’ve already got great co-production technology transfer cooperation, especially at Hellenic Aerospace, which is so important to Lockheed Martin’s global supply chain and global production. The C-130, the middle section of every C-130 in the world is produced at Hellenic Aerospace (HAI). The air intake for every F-16 is produced at Hellenic Aerospace. And now we’re working with the government to build up the capacity at HAI both so that it can implement the Viper F-16 upgrade program, the Papa-3 upgrade program, but also to look at how HAI plays an even bigger role over the long term as part of a global partnership with Lockheed Martin.

I would love to see us accomplish the same thing at Elefsina. It would be a huge step forward if we were able to identify an option for Greece’s next generation of frigates to co-produce those at Elefsina. This is one of the things that American companies do very well. The government has a way to go before it decides what its next generation frigate is going to be. I know that the American companies that are interested in this have an explicit plan for how they would be able to work with Greek industry and the Greek maritime industry to add value here in Greece.

Mainland, islands generate same maritime rights

There has been a request for seismic research by the Turkish Petroleum Corporation (TPAO)  in an area that Greece regards as being part of its continental shelf. Ηow does the US view the situation there?

We have since December discussed our views on this MoU between Turkey and Libya – our views on the rights of islands in terms of their maritime rights and the EEZ being exactly the same as continental territory. So there’s nothing new that I can add there. But what I think is really important is the very clear message that you heard [on Wednesday] from Assistant Secretary [of State for Energy Resources Francis R.] Fannon as he was speaking on the panel with the 3+1 Energy Ministers at the event with the AmCham and the Atlantic Council. It was really important as an opportunity to have the most senior Washington official who deals with these issues at the technical level, Assistant Secretary Fannon, deliver a completely unambiguous message about how this MoU takes no rights away from Greece and the American interpretation of both the international legal aspects but also the diplomatic aspects of it.

What are the guarantees that the US can provide that this situation will not get worse?

I think the way I would answer that is twofold. First of all, I thought Minister [of Environment and Energy Kostis] Hatzidakis spoke very well on this issue, and he’s not a diplomat but he has internalized the first principle of diplomacy, which is “it takes two to tango.” And he was very clear both in terms of Greece’s desire to have a normal relationship with Turkey, including on energy issues, the open architecture that Greek foresees for regional energy cooperation, as long as Turkey is prepared to engage on the basis of recognizing international law. All the United States can do is to support the efforts that Prime Minister Mitsotakis and his government have made to manage tensions and to identify areas of cooperation. I can’t make any promises about what the future will bring. But what I can assure you is that US policy is going to remain clear in exactly the way you heard it enunciated yesterday by Assistant Secretary Fannon. 

How do you see the 3+1 proceeding? Also what is the US view on the situation in Libya and the Western Balkans?

Let’s start on the 3+1. Energy is clearly the bright object. It’s the area where we’ve moved most rapidly in terms of our joint cooperation. But we’ve also had cooperation in other areas. We had a counterterrorism 3+1 in Cyprus last year. We also had a business and women’s empowerment 3+1 in Washington last year. 

I think the good news is, this has now become self-sustaining. It’s hard-wired into American diplomacy. It’s written into law through the East Med act. In terms of other areas of cooperation, one that I see as a natural is technology. Another is strategic stability, and not strategic stability in the Cold War sense but how we think about this Eastern Mediterranean region. I’m always reminded, any time I talk to Admiral [James] Foggo or Admiral [Lisa Marie] Franchetti in Naples, they talk about how when they were young naval officers in the Eastern Mediterranean we basically treated it like a NATO link, and now all of a sudden you have a Russian naval base in Tartus, you have Russian submarines operating all over the Eastern Mediterranean, coming out of occupied Crimea, moving through the Black Sea and down through the Aegean and into the Eastern Mediterranean. You have an uncertain situation in Libya. The basic problem in Libya is external actors including Turkey, Russia and the United Arab Emirates who continue to pour gasoline on the flames by sending in weapons and fighters. We have made very clear that this is a conflict that needs to be solved through diplomacy.

You also had a fairly unusual development last week as AFRICOM [United States Africa Command] declassified a significant volume of intelligence information about the advanced fighters and Russian Air Force pilots that the Russian government through its Wagner mercenaries has been sending into Libya. This will not help the situation and it has the risk of a further escalation of a proxy war on Greece’s borders. 

Then just quickly on the Balkans, I would just emphasize, I think one of the things we’ve been very pleased to see is the way in which the Foreign Ministry and the related technical ministries were able to build on the Thessaloniki Summit that took place back in February in order to deepen this vision of Greece as a major partner with all of your neighbors in the Western Balkans. 

I think there’s going to be an important challenge in the weeks ahead as North Macedonia heads into elections and we’re going to have to wait to see what the voters there decide, but I think both of us, Greece and the United States, are keenly interested in seeing that whatever government is elected in North Macedonia, it continues the course of reforms towards European standards and becomes the successful NATO member that we want to see.

It was a huge breakthrough last week when you had a B-1 bomber mission working with Greek F-16s flying over North Macedonia. For me that said a lot about the dramatic progress in Greece’s relationship with its northern neighbor.

Global responsibilities

The United States is in an election year, the death toll from the coronavirus is rising and the killing of George Floyd by a police officer has sparked tension. Could all this push the US toward more introverted foreign policy?

Let me start by sharing what I said to my Embassy team when we got to the office on Monday morning.I reminded everybody that the Rodney King riots in Los Angeles happened during my first Foreign Service assignment overseas about 30 years ago. All of us, I think, have been dismayed and appalled at the images that we’ve seen from the United States over the past few days. But it’s also clear that our democratic institutions are working. You see the messages that are coming from our mayors, from our local leaders. American society will pull together.

We will get through this. But we’re also a very big government. We have global responsibilities. We have a global footprint. That’s not going to change. As I said at the start of this conversation, in many ways I think the lesson of the pandemic is that our engagement and our international partnerships are in many ways more important than they’ve ever been before. We’re going to have a debate in terms of how we get the balance right in dealing with the challenge that China presents. China’s not going to go away. The US-China trade relationship is going to remain very large. But still the largest trade and investment relationship in the world is the one across the Atlantic Ocean between Europe and North America.