26th Sep 2023

Greece equivocates on Russia bailout

  • Greek ship magnates see Russia as the main security sponsor in the Black Sea (Photo: Jim Bahn)

The new Greek leader has said he isn’t interested in Russian financial aid “right now”, in a comment seen by some analysts as being deliberately ambiguous.

Alexis Tsipras told press in Cyprus on Monday (2 February) he is concentrating on debt relief talks with EU creditors instead.

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“We are in substantial negotiations with our partners in Europe and those who have lent to us. We have obligations towards them”, he said.

When asked if Russian help is an option, he noted: “Right now, there are no other thoughts on the table”.

His finance minister, Yanis Varoufakis, who is currently on a tour of EU capitals, outlined his favoured model in an interview with the FT in London the same day.

He said Greece wants to swap its EU and European Central Bank owned bonds for new debt instruments linked to "nominal economic growth" and for what he called “perpetual bonds”. He also said he aims to raise more money by taxing Greek oligarchs.

“We’re serious about reform, serious about being good Europeans and serious about listening. The only thing we shall not retreat from is our view that the current unenforceable programme needs to be rethought from scratch,” he said.

But the British finance chief, George Osborne, sounded less than keen.

He said after their meeting the Greek debt situation is a “risk to the global economy”. He also urged Varoufakis to “act responsibly”.

Russian chip

The latest Greek comments comes after Russian finance minister Anton Siluanov told CNBC last Thursday that if Greece asks for aid, then Russia “will definitely consider it”.

A Greek diplomat told EUobserver that, “to his knowledge”, the new Greek government and Russia have not held any talks on debt relief.

“The only meeting there's been is when the Russian ambassador delivered [Russian leader] Putin’s telegram to congratulate Tsipras on his election victory last Monday”, the contact said.

Some Greek analysts agree that Russian aid is a dim prospect.

Michel Koutouzis, a French-based consultant on EU affairs, told this website: “There won’t be any Russian bailout. Greece made its strategic decision, to be part of the EU and Nato, a long time ago and there is no way they’re going to jeopardise that”.

He added that some Greek banks, such as Eurobank - its third largest lender - hold so much private Russian money, that Russian investors might be willing to inject funds to keep them afloat in the worst case scenario.

“They’re ready to pay the price in order not to lose their money … so if Greek banks need extra liquidity in the coming months, they can hope for some help”, he said.

But for his part, Janis Emmanouilidis, an analyst with the Brussels-based think tank, the European Policy Centre, said Tsipras is choosing his words - “right now” - carefully to put pressure on EU negotiators.

“He is sending a certain message. He’s saying they have alternative paths. I don’t think they’ll go down that path. But you can call it a poker game and the Russian offer is a very small chip in that game”, he noted.

Politics is back

Tsipras on Monday added that Cyprus and Greece should be a "bridge of peace and co-operation between Europe and Russia”.

His foreign minister, Nikos Kotzias, the same day told the Athens News Agency that: “Greece is interested in stabilisation and peace in Ukraine, as well as avoiding a split in relations between the EU and Russia”.

The Tsipras government’s Russia-friendly remarks have raised concerns that no matter what happens on debt it might veto future EU sanctions on Russia.

But Koutouzis noted that Tsipras’ foreign policy squares with Greek interests and with other EU countries' behaviour.

He noted that Greece has a large ethnic Greek community in Mariupol, Ukraine, which is in harm’s way if there is no peace deal. He also noted that Greek shipping magnates depend on Russia to maintain their “quasi-monopoly” on Black Sea trade.

“Every EU country has national interests which it protects, whether it's Spain in it relations with Latin America, or Italy and Libyan oil, despite being EU members”, he said.

“Greece is no different. But the previous government gave up on politics in the EU. This government is bringing back politics and it’s good for Greece".

Russian narrative

Emmanouilidis added that “between a quarter and a third” of Tsipras’ Syriza party have ideological sympathies with Russia due to their Communist and anti-American backgrounds.

“They are more receptive to the Russian narrative on the Ukriaine conflict, and there is a lot of Russian content on Greek TV”, he noted.

Meanwhile, disenchantment with EU supervision has given Tsipras more room for manoeuvre among Greek voters.

A new Gallup poll published on Tuesday noted that, last year, 35 percent of Greeks approved of Russia’s political leadership compared to just 23 percent for EU leaders.

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