The Next Phase

by Endy Zemenides

For the last two years, both the Mitsotakis government and the Biden Administration have worked on a White House visit for the Prime Minister to mark the new highs the bilateral relationship has reached.  This meeting was intended to be part of the celebration of Greece’s Bicentennial.  Alas, COVID and Russia had other ideas, and the visit had to take a back seat to war and pandemics.

Yet the timing of Prime Minister Mitsotakis’ trip to Washington is fortuitous.  It comes at the beginning of Greece’s next bicentennial and also marks the start of a new phase in the U.S.-Greece bilateral relationship.

The backdrop of this meeting is significant.  Since the pre-COVID Mitsotakis visit to Washington, bilateral relations have been dynamic and have included the following developments:

• The Eastern Mediterranean Security and Energy Partnership Act (the “EastMed Act”), signed into law immediately before PM Mitsotakis’ visit with President Trump, has started to be implemented. Increased military education spending for Greece (and Cyprus receiving such assistance for the first time), the establishment of a formal “3 + 1” process and infrastructure within the State Department, and the limited waiver of the arms embargo on Cyprus are among the steps that have already been taken.
• Although full implementation of the EastMed Act is still outstanding, the bilateral relationship and regional developments have been so dynamic that successor legislation – the U.S.-Greece Defense and Interparliamentary Partnership Act, which strengthened defense cooperation and created a mechanism through with the U.S. Congress could work with the parliaments of Greece, Cyprus and Israel – was passed and signed into law last December.
• A new Mutual Defense Cooperation Agreement (MDCA) was executed by U.S. Secretary of State Blinken and Greek Foreign Minister Dendias this past fall.

There are two temptations that must be avoided as the bilateral relationship is celebrated and an agenda is set out for the next phase that it is entering. The first is a failure to appreciate the extraordinary nature of all that has been achieved. We are about to have the fourth official visit between a Greek Prime Minister and U.S. President in six years. As discussed above, two landmark pieces of legislation were passed in consecutive Congresses. American corporate giants are investing in Greece. Record number of American tourists are visiting Greece.  I could go on and on, but there has not been an equivalent period in the U.S.-Greece relationship in living memory.
We must also avoid the temptation of triumphalism and realize that big achievements – and not merely improvements on the margins – are still ahead of us. And since politics is the art of the possible, we should have a laser focus on what is immediately attainable and not just mere aspirations.

It might not be as “sexy” as speculating about F35 sales, the East Mediterranean Gas Pipeline, or security guarantees, but deepening U.S.-Greece economic ties should be the priority for this next phase.

Early in the Trump administration, Congress passed the Better Utilization of Investments Leading to Development (BUILD) Act to counter China’s Belt and Road Initiative. At the end of the Trump administration, the new US International Development Finance Corporation (DFC) established a foothold in Greece and the Balkans as per legislation authored by Senator Chris Murphy – who visited Greece this past summer.

DFC was assigned an indispensable role with regards to U.S. interests in Southeast Europe.  Title 1 Section 102(b) of the BUILD Act states that DFC, in addition to low-income countries, will operate in “countries in transition from nonmarket to market economies, in order to complement the development assistance objectives, and advance the foreign policy interests, of the United States.”

The DFC has already made significant progress in recapturing economic influence from Russian and Chinese interests. The DFC’s assistance to promote American investment in Greece’s ports and shipyards has tied Greece’s Western partners to critical and strategic infrastructure developments.  It also sent a clear signal that the U.S. will not cede the playing field in the Western Balkans and Aegean to Russia or China.

As the United States looks to Greece to play a major role when it comes to green and sustainable energy in a region that has traditionally been overly reliant on coal and other fossil fuels (and much of that being Russian gas), the DFC can speed up such developments. Title II Section 201(f) of the BUILD Act explicitly gives DFC authority to engage in “special projects and programs” in renewable energy.  Many countries in the region emerged from economic crises only to be hit hard again by COVID and by the economic fallout of Russia’s invasion of Ukraine.  The DFC can encourage projects that will advance both the goal energy independence from Russia and the reduction of carbon emissions.

The pieces are in place.  The Biden Administration’s DFC finally has a Senate confirmed CEO – Scott Nathan.  The new US Ambassador to Greece – George Tsunis – has deep ties with corporate America and can recruit the exact type of investors who would make the most of DFC investments.  Outgoing Ambassador Geoffrey Pyatt is set to become the next Assistant Secretary of State for Energy Resources, and no one has a better sense of how the DFC can advance both energy independence and a green energy revolution.  Come May 16, President Biden must commit the DFC to playing a major role in Greece.