Reporting from Athens — The financially strapped Greek government, after narrowly dodging a humiliating bankruptcy, in recent months has seen its efforts to sell state-owned assets draw big-money interest from China and other countries looking for bargains.
Plans by China, which has huge commitments at the port of Piraeus, include greater investments in the Greek shipping industry. Libyan officials have pledged cooperation in areas as diverse as pharmaceuticals and renewable energy, and Qatar officials late last month signed a memorandum showing interest in investing as much as $5 billion in real estate and other sectors.
When Chinese Premier Wen Jiabao visited Greece last weekend, he spoke reassuringly of helping restore economic stability to the country, a message appreciated by Greek officials.
"These are important global players and they are willing to bet against the risk of Greece going into default by spotting emerging opportunities here," said Charalambos Pamboukis, Greece's minister of state responsible for attracting overseas funds. "Their vote of confidence [in Greece] is bound to instill confidence in other traditional investors."
Well into the throes of its worst recession in 16 years, the government in Athens was forced to secure a $146-billion bailout package from the European Union and International Monetary Fund this year, promising a rash of reforms in return, plus a string of cost-cutting measures intended to slash the country's budget deficit from 13.6% of its gross domestic product to under 3% by the end of 2012. The austerity measures, which include cuts in pay for certain workers and reduced services, have been met with some protests.
Ten months into the year, however, net revenue is growing at a rate of only 3.3% compared with a targeted 13.7%, leaving state coffers cash-starved, the recession swelling and officials aggressively wooing foreign money to spur growth.
The government overtures included Prime Minister George Papandreou meeting with Libyan leader Moammar Kadafi in a Bedouin tent to persuade him to invest in Greece's broken economy.
Sheik Hamad ibn Khalifa al Thani, the emir of Qatar, after being courted for months and enticed by generous government incentives, agreed in late September to consider sinking billions of dollars into projects in Greece.
The commitment, officials acknowledge, is vague and unbinding, covering six fields of interest as diverse as tourism, infrastructure and energy. Still, if realized, the deal will yield one of the biggest inflows of foreign capital to Greece, a debt-laden country where direct foreign investment has dropped drastically in the last two years, from $4.8 billion in 2008 to $3.4 billion in 2009.
Already, in the seaside suburb of Hellenikon, residents are protesting over purported plans by the Qataris to develop the 1,413-acre site of the capital's former international airport and a nearby marina into a glitzy resort-and-casino complex.
"Money is money," Development Minister Michalis Chrysohoidis said. "While an investment [such as the one considered by Qatar] will not save Greece from its economic crisis, it will definitely encourage other foreign investors to come forward and help stimulate growth."
Although many Western investors remain skittish, the Chinese and sovereign wealth funds such as the $60-billion Qatari Investment Authority are bucking the trend, eyeing Greece as a further inroad to one of the world's largest markets: the European Union.
Over the weekend, in the first visit by a Chinese premier to Athens in 24 years, Wen took to the podium of Greece's sprawling Parliament chamber to speak effusively about his bid to invest further in this nation's shipping expertise, reassuring the debt-strained European Union also that China's holdings of European bonds would not be shed.
Libya's $65-billion sovereign wealth fund also has been seeking to pick up cheap assets across Europe, adding Greece and its untapped energy resources to its wish list, as traditional investors continue retrenching in the global recession.
Pamboukis and Ahmad Al Sayyed, a Qatar Investment Authority executive, will meet this month at an undisclosed location to privately lay down the ground rules and agenda for their investment talks. At least six bilateral committees have been formed in recent months to identify individual investment opportunities for rich investor nations, including China, Libya, the United Arab Emirates, Russia and India.
"We are not traveling around the globe with our suitcases, looking for money. We're not putting up this boutique country for sale," Pamboukis said in an interview. "We want strategic investors."
The size and scope of potential foreign inflows remain unclear. But in snagging the investments, officials in Athens have promised lucrative incentives, including tax holidays, extended leasing rights to prime real estate and binding decisions that secure the fate of their projects.
A fast-track procedure is also being completed, allowing mega-investors to clear the hurdles of Greek bureaucracy and set up businesses within 30 days, a scheme initially set up before the 2004 Athens Olympics when the International Olympics Committee threatened to call off the Games if Greece failed to deliver key projects and venues.
"It's good to have huge investments like these," said Gikas Hardouvelis, chief economist at Athens-based financial firm Eurobank. "But the real test will be whether Greece can win back more of the smaller investors from abroad."
Carassava is a special correspondent.