EuroAsia Interconnector, the subsea cable that will connect the electricity grids of Israel, Greece and Cyprus, with the capability of selling surplus energy to western European markets, has been deemed as an integral part of Greece’s plans to transform the country into a regional electricity and telecom hub.
The 1,520 km ‘electricity highway’ project has just passed a landmark stage of its development programme, presently executing the final pre-work studies which have been co-financed by the European Union and will lead to the construction works starting this year with the aim of uniting all three national grids by 2022.
Several officials accompanying Prime Minister Alexis Tsipras on his visit to Beijing to attend the ‘Belt and Road Forum’ over the weekend, reiterated Greece’s commitment to the interconnector project, in addition to other key energy infrastructure projects, such as oil and gas exploration and the Trans Adriatic Pipeline (TAP).
Already, Foreign Minister Nicos Kotzias warned Turkey a week earlier to de-escalate its military exercises in the Aegean and the Cyprus Exclusive Economic Zone (EEZ) in the eastern Mediterranean, saying that Greece’s energy security will be a new priority for the government in Athens.
This follows criticism that the Greece-Cyprus Defence Dogma, initiated by Andreas Papandreou nearly two decades ago, never really got off the ground and safeguarding Greek and Cypriot energy interest had been sacrificed in the face of attempts at improved relations with Ankara.
Tweeting after inaugurating the Greek Studies Centre at Beijing’s Foreign Studies University, Tsipras referred to his meetings with Chinese business executives, saying that strategic energy projects – such as an undersea power cable linking Athens and Crete in the context of the EuroAsia Interconnector – were discussed.
In posts on his @PrimeministerGR account, Tsipras said that he met with economic actors in Beijing, including Chinese electricity company executives.
“Among others, we spoke with executives of the Chinese Electricity Company about projects of strategic importance, such as the Athens-Crete energy link in the context of the EuroAsia Interconnector,” the tweet said.
On the sidelines of the ‘Belt and Road Forum’, Tsipras met with the Chairman of the State Grid Corporation of China, that in December 2016 acquired 24% of the shareholding of the Greek Independent Power Transmission Operator (IPTO or ADMIE) in a deal worth 320 mln euros, which is the grid operator that will benefit from one of the three sectors of the EuroAsia Interconnector, that will connect Attica and Crete.
“The co-operation between EuroAsia Interconnector, the Greek IPTO and State Grid is of the utmost importance for the successful implementation of this strategic infrastructure project, as this is a leading electricity interconnection that is transforming Greece into a key regional energy hub,” said EuroAsia’s Chairman and CEO Nasos Ktorides said.
Meanwhile, the project now includes a telecom facility, as Greece’s Digital Policy and Telecom Minister Nicos Pappas said that the EuroAsia Interconnector will also lay a parallel fibre-optic link between Israel and Greece.
“The prospect of upgrading the EuroAsia Interconnector from a purely energy link to one of energy and telecoms, with the addition of fibre optics, equates into upgrading the digital role that Greece can play in the wider region, Pappas said earlier in Tel Aviv, during a meeting with his Israeli counterpart Avi Blasberger..
He said that the interconnector will be laid at a depth of 2,000 metres and will cost 3 bln euros, financed by the EU, the three partner nations and own funds.
One of the most significant deals signed in Beijing was that between Greek telco and Internet giant Forthnet and the Chinese company ZTE, in the presence of Prime Minister Tsipras and Digital Policy Minister Pappas. The agreement concerns an investment of 500 mln euros, about 350 mln of which will be invested over the next three years.
These deals raise hopes that Greece will be able to reach an agreement on its debt very soon.
Government spokesman Dimitris Tzanakopoulos said that “for us the main issue is the country to be included in the quantitative easing programme and anything that leads to a debt settlement that will open the door to the country’s inclusion is acceptable for us.”
He added that, ahead of the Eurogroup meeting on May 22, the primary surpluses must be defined in order a comprehensive agreement to exist because on this depends the size of the mid-term measures for the debt. He noted that the discussion will certainly open at the next Eurogroup meeting and expressed the wish that it will be completed in the specific meeting. “If we don’t succeed to complete the discussions on May 22 and some more days are needed, I believe it is not that terrible,” Tzanakopoulos concluded.
In a similar mood, Tsipras and IMF chief Christine Lagarde agreed on the need for debt relief during their meeting in Beijing, where Lagarde sent the message that if Berlin does not agree on a feasible fiscal ‘path’ then the IMF will leave from the programme. In this case the measures will not be applied, replied Tsipras.
According to Athens News Agency reports, Tsipras and Lagarde totally agreed on the need for a solution for the Greek debt now and the definition of the mid-term measures immediately. Such a development is necessary in order the growth potentials of the Greek economy to unfold.
Moreover, Lagarde noted that if German Finance Minister Wolfgang Schaeuble insists on the view that there is no need for debt relief and a feasible fiscal path after 2018 can’t be agreed, then the IMF will leave from the programme. Tsipras answered that in this case (if the IMF leaves from the programme) then the measures that will be voted in the Greek parliament in the week will not be implemented in 2019-2020
Returning to growth
In his address at the Forum for the One Belt One Road project, Tsipras said that it is becoming a crucial vehicle for expanding economic growth, trade and investment. It is crucial for maximising investment synergies and promoting trade, transport, energy and telecommunications networks, through projects that can have a big impact on national economies.
“Greece – after many years of severe crises – is returning to a growth path which opens up remarkable opportunities for investment and trade. My country is once again taking full advantage of its unique geopolitical identity as a country of Europe, the Mediterranean, the Balkans and the broader Black Sea region, but also as a maritime country with potential for advancing relations, far beyond its neighbourhood. In this framework Greece is expanding its role as an important regional hub in the fields of trade, transport, energy, telecommunications, logistics, culture and tourism,” the Greek PM said.
“As a leading maritime country, looking for new trade routes, we see the great opportunities in the 21st Century Maritime Silk Road. An increasing number of Greek shipowners build their ships in China, while our biggest port – the port of Piraeus where a very important investment by COSCO has been made – is becoming a global gateway to Europe for products coming from Chinese and other Asian ports, including through the Suez Canal. From Piraeus port, the merchandise can easily be transported by rail to many destinations in the Balkans and in Central Europe.”
The president of the World Bank, Jim Yong Kim, referred to the Prime Minister’s statements regarding the need for synergies, partnerships and dialogue so that the necessary investments are planned on a stable basis.
He also supported Tsipras’ proposal the Belt and Road Forum to be held again in the future as the first meeting was a success. Moreover, he referred to the prospects of the global economy and the possible risks.
Tsakalotos: exit programme in 2018
Meanwhile, Finance Minister Euclid Tsakalotos said on Monday that the Greek government wants to exit from the bailout programme in 2018 with a solution for its debt burden.
“Our aim is to exit this program in 2018 […] to leave the extreme supervision and enter a different path. And for this other path we need a solution on debt so that it is sustainable, we need to tap the markets,” he told a parliamentary committee debate on the prior actions agreed with the country’s lenders.
The minister said the government does not claim to have achieved a “success story”, as previous governments have in the past, noting there are “many things in the agreement that will sadden people” but there are also “things for which we can be pleased about”.
“This is why we say the main battle is the fight against supervision,” he explained, adding that “there will be gray areas” even when the country completes its aid programme.
Finally, French Finance Minister Michel Sapin said on Friday, in a statement from the G7 Finance Ministers’ Meeting taking place in Bari that “the ball is now in the court of Greece’s European partners, who have to keep their side of the bargain regarding debt relief.”
“They must now implement what was necessary from the beginning… In other words, in some way or another to relieve the debt burden on the Greek economy and its budget,” Sapin said, noting that all parties in the talks had expressed a desire to reach agreement before the Eurogroup on May 22.
European Commissioner for Economic and Financial Affairs Pierre Moscovici also expressed optimism that a deal will be found for Greece.
“I am confident the will is there and Greece will be able to turn the page on a too-long chapter of austerity and open a new chapter of growth and investment in a framework of stability,” he said. “After so many years of recession, the Greek people really need that.”
The Eurozone countries and the IMF are expected to agree on the target for primary surpluses that Greece will have to achieve after 2018.
Concerning debt, the Eurogroup wants to reach a decision on concrete relief measures that will satisfy the IMF to such an extent that it will be able to announce the same day that it will ask its governing council to approve a new program for Greece.