Actually Russia Isn't Crazy about Bailing out Greece in EU's Place
Moscow would rather Brussels pours money down that hole
This article originally appeared at Dances with Bears.
The Kremlin doesn’t want to say so exactly. But right now it is as reluctant to support the Greek Government in its conflict with Germany, as Joseph Stalin and the Soviet Politburo wanted to back the Greek Communist Party during the Greek civil war between 1946 and 1949.
So, when Foreign Minister Sergei Lavrov (right) met in Moscow with Greek Foreign Minister Nikos Kotsias two weeks ago, he offered Athens a hypothetical conditional: “Russia is also in a tough financial situation caused by a unilateral illegitimate policy of our Western colleagues. However, if the government of Greece ever comes up with any requests then, as Finance Minister Anton Siluanov said, they will, of course, be considered…”
Speaking a few hours before on Athens television, the new Greek Defense Minister Panos Kammenos proposed the Greek hypothetical conditional: “if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source. It could the United States at best, it could be Russia, it could be China or other countries.”
In an American television interview on January 30, Siluanov had said: “we can imagine any situation, so if such [a] petition is submitted to the Russian government, we will definitely consider it, but will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say. If it is submitted we will consider it.”
Asked today to clarify Siluanov’s hypothetical conditional – had the Greeks proposed any form or value of a Russian loan – the spokesman for the Finance Ministry in Moscow replied: “we do not comment on this topic before the decision will be taken.”
In the circumstances, this was being diplomatic. Siluanov’s deputy for international relations, Sergei Storchak very clearly said no on Tuesday. Storchak was quoted by the state news agency RIA-Novosti as saying that financial aid to the government in Athens is excluded because there is no budget allocation. “To date, [financial aid to Greece] is ruled out because the law on the federal budget does not provide such facilities.”
sked whether a Moscow loan in Plan B has been tabled, the new Greek Ambassador in Moscow, Danai-Magdalini Koumanakou, said through a spokesman that she would consider her answer, and decide when to give one. Koumanakou presented her credentials to President Vladimir Putin four months ago, on October 23. She is still considering what to say.
At the start of 1949, when the Politburo was discussing what assistance to provide the Greeks, the country had already recorded a loss of more than 100% of its GDP caused by the invasions of the Italian and German armies. The civil war, triggered by British forces in December 1944 and funded on the Greek Government side by the UK and US, halted the post-war recovery of Greece, so that it lagged far behind the recovery of the countries which had been occupied during the world war; and also behind the enemy states, Italy and Germany. The one sector of the Greek economy to benefit until 1950 was the military, police, and security agencies. Altogether, they received $400 million from Washington; that’s equivalent to $4.4 billion today. A recent econometric calculation indicates that the annual loss of Greece’s GDP growth, counting destruction of livestock and non-agricultural capital, unemployment, casualties and displacement of population during the civil war was 12.15% per year until the war ended in August 1949.
The GDP loss in Greece since the start of the German-directed EU bailout programme has been about 30%; that’s an annual rate of almost 6% or about half the loss rate inflicted by the German invasion or by the civil war. The casualty rate – dead and wounded – is less today; the displacement rate – from village to city or emigration – almost the same.
Stalin’s decision not to contest Greece with the Americans, and the calculation in Moscow at the time of higher priority state interests have been well documented. Less well-known is the calculation of the last Soviet Politburo in 1989, then ruled by Mikhail Gorbachev: he decided not to come to the aid of Prime Minister Andreas Papandreou, who requested assistance ahead of the parliamentary election of June 1989. Papandreou lost that election.
Greek assessments of Tsipras’ current negotiating tactics with the European Union (EU) come to the same conclusion. Tsipras conceded as much in an interview he gave the German magazine Stern on February 19. Asked if President Vladimir Putin has promised money, Tsipras replied: “if only it were so easy to accumulate the funds. But it’s true — Russia’s ambassador was the first diplomat to congratulate me. However, prior to that I received a phone call from President Obama. And later on from President Putin and the Chinese premier. It just goes to show how much global interest there is in Greece continuing on its path to stability and returning to growth.”
Russian strategic analysts do not agree that Greece is as important as Tsipras claims, nor as stable. Alexei Pushkov, chairman of the Duma Committee on Foreign Affairs, said he refuses to discuss Greece. Sergei Karaganov, head of the Council for Foreign and Defense Policy, prefers discrete silence. Yury Kvashnin, head of the EU studies section at the Institute of World Economy and International Relations in Moscow, says the new Greek government is pretending to approach Moscow in order to play at “blackmail” with the EU.
“[Tsipras says to the EU] you are going to make concessions on the debt issue for us, and we in our turn will be ready to reconsider our position on the future relations with the Russian Federation. Thus, it appears that at the moment the tactical interests of Russia and Greece are the same. It can be expected that as long as there is no settlement of the Greek debt issue, there will be very warm relations between Russia and Greece. I do not exclude that there will be mutual visits at the highest level, and a lot of words will be spoken about friendship, about the need for partnership between the two countries, the necessity for deepening economic cooperation.”
“However, we must understand that Greece is an integral part of the Euro-Atlantic structures. It is part of the EU, it enters into NATO. Therefore strategically the main purpose for Greece is to stay in these structures, but on more favourable terms. So I think that now we will see some warmth in the relations between Russia and Greece . Everything will be well and good. But in the future, of course, all this may come to naught. That is, of course, if Greece manages to agree on restructuring their public debt.”
Gazprom said this week it is not less skeptical of Greek intentions, and much more confident of Turkey’s strategic importance by contrast. Asked if the Tsipras government has requested talks on new pipeline deliveries to Greece, a Gazprom spokesman implied no, but replied with a hypothetical conditional: “it’s better to ask first the government of Greece about this issue, and after that we will be able to respond.”
According to Gazprom, if the Greek government wants Russian gas, it is welcome to build a pipeline to Ipsala, on Greece’s western border with Turkey, to buy it. The Gazprom release says its priority in the meantime is delivering gas to meet rising Turkish demand. “The parties defined the key reference points of the route and technical solutions for the gas pipeline in Turkey. In particular, the meeting chose the landfall location – near Kiyikoy village, the gas delivery point for Turkish consumers in Luleburgaz and a border crossing between Turkey and Greece in Ipsala. The gas pipeline length will total 180 kilometers. In the near future a permit is to be obtained for conducting FEED operations for the new Turkish offshore section. The growing demand for natural gas in the Istanbul district will be taken into account in the gas pipeline design; therefore, the volume of gas to be delivered to the border between Turkey and Greece was specified and estimated at 47 billion cubic meters. The capacity of the offshore gas pipeline from Russia to Turkey will amount to 63 billion cubic meters a year, the first string is to be completed by December 2016.”
Alexei Makarkin, an analyst with the Center for Political Technologies in Moscow, refuses to answer direct questions on Russia’s Greek strategy. He recently published a warning that, for the time being, “[Greek] rhetoric, as is often the case, is much more radical than real action. So, at a meeting of EU foreign ministers on January 29, Kotsias did not block a decision to extend sanctions against Russia, and even conceded some expansion… The new ‘sectoral’ sanctions have not been approved, but this is associated with the position, not only of Greece, but also of a number of other EU countries — Italy, Hungary, Cyprus, and perhaps France…The Greek government will continue manoeuvering, trying to find a common language with the European centre-left and get their relief in the economic sphere. In this case, it will make active use of the Russian factor to put pressure on the EU (as does the Hungarian Prime Minister Viktor Orban…”
According to Sam Jones, NATO spokesman at the Financial Times, “European and Nato intelligence officials are now poring over links between the Kremlin and senior figures from Syriza and its coalition partner, the Independent Greeks party… Mr Kotzias — a former Piraeus university professor — has espoused increasingly nationalist positions, developing a relationship with Alexander Dugin, the Russian nationalist philosopher, during several visits to Moscow, according to a colleague who declined to be identified. Mr Dugin, who is close to several figures in the Moscow security establishment and last August called for a ‘genocide’ of Ukrainians, was invited by Mr Kotzias to speak at an event in the Piraeus campus in 2013, where he extolled the role of Orthodox Christianity in uniting Greeks and Russians. Mr Kammenos has also been a frequent visitor to Moscow. A picture shows him in the Russian capital two weeks ago, meeting the chairman of the Russian Duma’s foreign affairs committee and the deputy chairman of its defence committee.”
Dugin asked to be paid for an interview before he would respond to questions. For the source of the state bank funds which Malofeev has been spending, read this. Malofeev describes his financial contributions in Crimea and Donbass as religiously-inspired philanthropy and humanitarian aid; he denies funding troop formations or military operations. According to a source close to Kremlin policymaking, “whatever contacts they may have had with the Greeks make no difference to Kremlin policy. That’s because neither the two Russians, nor the two Greeks make a difference.”
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