There’s a common saying in Greek, exo pame kala – “we are doing well
abroad”. The phrase is attributed to a former prime minister and president of
Greece, Constantinos Karamanlis (1907-1998), and is used nowadays to imply that
government foreign policies are easier to sell to the public than domestic issues.
Exo pame kala may well apply to the
current government of Greece, which joined 16+1 at the Dubrovnik summit last
week.

What can Greece expect from its newly
acquired 17+1 membership status? Further Chinese investment, beyond COSCO’s
flagship project in the port of Piraeus and State Grid’s 24% stake in the
independent power transmission operator (IPTO), known by its Greek acronym
ADMIE? PwC, a renowned consultancy, estimates that the Greek economy faces a
huge investment gap in the range of €155bn
over the 2017-2022 period. But Chinese investment promoted through 16+1 to date
has been modest at best and there
are clear signs of disenchantment in some of the Central and Eastern European
(CEE) countries. In fact, there are growing concerns
that this platform is more of a vehicle for the promotion of Chinese influence rather than a generator of economic
development in the region.

Can Greece rely on Chinese loans then? Not
very likely, given that Greece is saddled with an exorbitant public debt, to
the tune of 178% of the country’s GDP at the end of 2017. Greece has the second
worst debt-to-GDP ratio in the world, after Japan’s 238%. Despite its exit from
the third bailout programme in August 2018, Greece is still being watched very
closely by uneasy European creditors. Therefore, seeking credit from Chinese
policy banks will set off the alarm bells.

So, what was the rationale behind the
decision of the Greek government to join the Sino-CEE grouping? Conventional
wisdom has it that there is nothing wrong with heads of state meeting, chatting
and thrashing out co-operation plans. A more cynical reading into 16+1 annual
summits is that they are ideal for handshakes and photo ops with the Chinese
premier and televised statements, which CEE prime ministers can then sell back
home.

Alexis Tsipras is no exception. With
general elections in the country a few months away, the Greek prime minister
saw the Dubrovnik gathering as an opportunity to score yet another political
point abroad, after the Athens-Skopje deal. According to most opinion polls,
his radical left Syriza coalition is trailing behind the main opposition party
New Democracy and Tsipras badly needs to show his followers that he’s accepted
as a leader on the international scene.

It is true that the decision for accession
to 16+1 wasn’t made on the spur of the moment. The Greek prime minister
announced his intention as early as last June at a press conference in
Brussels, a week before the Sofia summit (6-7 July 2018). His plan didn’t
materialise back then, for two reasons.

First, the official position of the
Tsipras government until recently was that, as long as Athens and Skopje
disagreed over North Macedonia’s name, Greece could not join the 16+1 grouping.
Now that the dispute has been settled on the basis of the so-called Prespa
agreement, a major stumbling block is out of the way.

Second, Brussels and other western
European capitals have not concealed their irritation at the Sino-CEE platform,
which they view as a threat to EU unity. Last year Beijing didn’t want to annoy
the EU and Germany too much – notably, Li Keqiang flew from Sofia to Berlin for
a meeting with Angela Merkel.

So, doesn’t 17+1 antagonise those capitals, three days after the 9 April EU-China summit? It does, but then Beijing’s perspective certainly differs from the EU’s. Because, interestingly, exo pame kala may apply to China as well. Facing a growth rate slowdown, a painful shift to a new economic model and a number of long-term challenges, such as an aging population, president Xi is eager to promote his emblematic Belt and Road Initiative (BRI) on the international scene – and then sell it back home. Hence his insistence on the BRI MoU signed by Beijing and Rome in late March, which was touted by Chinese media as a major diplomatic feat. The enlargement of 16+1 is yet another demonstration – or show-off – of the international acceptance of BRI, Xi’s pride and joy.

This article was originally published at European Interest

Author Details
Plamen Tonchev is Head of Asia Unit at the Athens-based Institute of International Economic Relations.
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Plamen Tonchev is Head of Asia Unit at the Athens-based Institute of International Economic Relations.
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