Greece is tapping China's deep pockets to help rebuild its economy

"The Chinese want a gateway into Europe," Theodoros Pangalos, Greece's deputy prime minister, said in an interview. "They are not like these Wall Street [expletive] pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece."

Yet the privatization of the port also shows how difficult such a transition might be, particularly as Greece tries to privatize more of its economy.

35-year lease

The Chinese deal for the port began to come together in 2006, with Cosco taking transitional control of the main dock at Piraeus on Oct. 1, 2009. It came in armed with a 35-year lease and a mission to whip the notoriously inefficient container docks into shape.

The unloading of a mid-size cargo ship could take as long a week at Piraeus, days longer than at a modern, well-run port such as Rotterdam, now Europe's largest. Many in the shipping industry blamed Greek state workers. "The problem is, the workers were trained to make more money without working," said Nicolas Vernicos, owner of a shipping company whose tugboats have been subcontracted by the Chinese to operate at the port. "That is Greece's problem."

The unions at the port had been striking off and on for months to protest the Chinese arrival. Greece's Socialist government, which came to power in October, initially stood behind the unions, almost scuttling the Chinese deal.

But as Greece's economy went into a tailspin, the government did an about-face, not only welcoming the Chinese at the container dock but also entering into new talks with them for a major shipping repair hub at the port as well as a huge new distribution center.

As part of the deal, 500 union workers at the port were gradually replaced -- allowing the Chinese to bring in cheaper subcontractors. To calm the unions, the government offered 140 workers up to $2,000 a month in pension payments, while others were promised government jobs elsewhere.

The unions and the Greek Communist Party say the Chinese are hiring subcontractors with fewer than 20 workers -- putting them just below the legal threshold in Greece to form organized unions. In addition, they say, the new workers are being pushed too hard, pointing to an incident three weeks ago when two new hires were hospitalized after being injured on the job.

"We are not only giving up national sovereignty but selling our workers out," said Nikos Xourafis, a labor leader with the Greek Port Workers Association. "That can't be the answer for Greece."

Special correspondent Iason Athanasiadis contributed to this report.