In a tale of two new eras, Athens walks a fine line between Chinese Investments and a US defence pledge. The decision comes soon after US Secretary of State Mike Pompeo visited Athens and warned about Chinese influence in Europe.

Greece’s New Government has rejected nearly a third of Chinese Shipping giant COSCO’s planned upgrade for the Port of Piraeus, a project that Beijing sees as one of the biggest Chinese managed infrastructure successes in Europe.

But in its announcement on Thursday, the Greek administration which came to power in July – said it had approved the rest of COSCO’s Port plans.

The decision comes as Athens tries to balance the benefits of investment from China’s Belt and Road Initiative, US opposition to partnerships with Beijing, and the European Union’s own call for more stringent investment screening mechanisms.

“Greece is trying to walk a fine line. With this China doesn’t lose face in the end because it keeps two-thirds of the expansion plan,” a Greek government source with knowledge of the negotiations said. “We sorely need investments to boost the economy.”

The decision also comes less than a week after US Secretary of State Mike Pompeo visited Athens and repeatedly warned about Chinese influence in Europe.

China is using economic means to coerce countries into lopsided deals that benefit Beijing and leave its clients mired in debt

US Secretary of State Mike Pompeo

“Take China … which is using economic means to coerce countries into lopsided deals that benefit Beijing and leave its clients mired in debt,” Pompeo said.

While in Athens, Pompeo sealed a revised mutual defence cooperation agreement with the new government under Prime Minister Kyriakos Mitsotakis, a pact that Pompeo said represented “a new era” in US-Greece relations.

But on Thursday, the Greek government declared the dawn of another “new era” – this time with China, by approving US$670 million of COSCO’s investment master plan.

“An emblematic investment for Greece starts immediately. A new era dawns for the Piraeus Port,” the Greek shipping ministry said. According to Greek media reports, Greece’s shipping minister, Ioannis Plakiotakis, said he was satisfied with the decision.

“The investments planned by the Piraeus Port Authority, controlled by COSCO are upgrading the Port of Piraeus and creating new jobs,” Plakiotakis said, adding: “The approval of the master plan proves that our country is investment friendly.”

Piraeus Port Authority head Yu Zenggang applauded the Greek government’s decision, saying it was granted after “a long waiting period”, according to local news agency.

COSCO acquired a majority stake in the port authority in 2016 after winning an international tender. Its subsidiary, Piraeus Container Terminal, has managed the Port’s container terminals since 2009.