Cosco Ordered to Pay for Greek Benefits

By The Maritime Executive 03-23-2015 07:15:51

European Union state aid regulators have ordered Greece to recover certain illegal fiscal benefits granted to Piraeus Container Terminal (PCT) and its parent company Cosco Pacific Ltd.

PCT runs cargo operations at the Port of Piraeus, and is currently expanding operations with the construction of a third pier

The European Commission said the measures, which breached EU rules, included tax exemptions and preferential accounting treatment.

"The companies now need to pay back the advantage received to the Greek state. To avoid further distortions of competition, the Greek authorities are also expected to cease granting these advantages to PCT from now on," the Commission said.

Cosco was one of the main candidates for buying a 67 percent stake in Piraeus, Greece’s biggest port, but Greece’s new leftist government, led by Prime Minister Alexis Tsipras, said it would halt all privatization plans shortly after it took up office in January.

China has developed close economic ties with Greece as demonstrated by Cosco which has had a 35-year concession managing the two main container terminals at the Port of Piraeus.

Greek Deputy Prime Minister Ioannis Dragasakis will visit China this week as concerns over Greece’s financial crisis intensify.

TSIPRAS ON GOODWILL MISSION

Greece's long-running financial crisis has seen it at odds with Germany, and Tsipras is currently in Germany, making his first official visit to Berlin. So far it is unclear if the two countries have narrowed differences on the economic reforms Greece must implement to win urgently needed fresh cash from its creditors.

Tsipras insisted he was not in Germany to solve Greece's pressing liquidity problems but to find common ground to move forward in the euro zone.

German Chancellor Angela Merkel said Germany, which has the biggest population and economy in the EU, considered all European states as equals and wanted good relations with all, including Greece.

The chancellor made clear there could be no breakthrough to provide fresh funds for Greece from their talks, since that was up to the 19-nation Euro-group’s finance ministers.

Berlin wanted Greece to restore growth and overcome high unemployment, Merkel said, adding: "For that you need structural reforms, a solid budget and a functioning administration."

SCEPTICISM

Tsipras promised euro zone leaders last week he would present a comprehensive list of reform proposals soon to unlock aid, without which EU officials say Greece may run out of money by late April. His pledge has encountered deep skepticism in Germany, a stickler for fiscal discipline.

But outside the Chancellery in Berlin, where he and Merkel reviewed an honor guard, the Greek prime minister encountered a friendly crowd trying to put a positive face on bilateral ties. They waved banners with pink hearts proclaiming "Germany loves Greece" and vice-versa and a Greco-German couple kissed.

Merkel, accused in Greece of seeking to force more austerity on a devastated economy, was looking for concrete ideas from the leftist premier on how to resolve the standoff over concluding a bailout program worth 240 billion euros ($260 billion).

Tsipras wrote to her last week warning Greece would find it impossible to make debt payments in the next few weeks without more financial help. He blamed European Central Bank limits on Greece's ability to issue short-term debt as well as euro zone bailout authorities' refusal to disburse any cash before Athens adopts new reforms.

Former Prime Minister Antonis Samaras accused Tsipras of "whining to foreign leaders". Opposition lawmaker Fofi Gennimata said it was akin to saying "I surrender unconditionally and expect you to save me with a third bailout".

ECB chief Mario Draghi said he was ready to start accepting Greek bonds again as collateral for lending to Greek banks as soon as conditions were in place for the successful conclusion of a review of the bailout program.

The distrust felt by Merkel's conservatives toward Tsipras' government - and especially his unruly Finance Minister Yanis Varoufakis - was unlikely to be improved by his plans to meet Germany's opposition radical Left and Greens parties on Tuesday.