Russia Ups Ante In Greece Economic Game

Greece has been invited by Russia to become the sixth member of the BRICS New Development Bank (NDB). The question is, how will Prime Minister Tsipras play this latest hand?

Wed, May 13, 2015
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Greek Prime Minister meets with Vladimir Putin - (Prime Minister’s flickr page)
Greek Prime Minister meets with Vladimir Putin - (Prime Minister’s flickr page)

News Russia has invited Greece to become the sixth member of the BRICS New Development Bank (NDB) is a bit obscured by U.S. Secretary of State Kerry’s visit with Lavrov in Sochi. However, the $100 billion NDB tasked with competing for dominance in international lending with the west bears close scrutiny today.

On Monday Russia’s Deputy Finance Minister Sergey Storchak offered the invitation via phone to Greek Prime Minister Alexis Tsipras. According to the news via Greece’s Syriza party website, the Greek prime minister thanked Storchak, adding Greece is “very interested” in the offer. In a move some suggest is meant to counter US and EU pressure on Greece, Athens is becoming a more and more coveted prize, especially where the Turkey-Greece gas pipeline is concerned. The statement from Syriza read:

"The Prime Minister thanked Storchak and said he was pleasantly surprised by the invitation for Greece to be the sixth member of the BRICS Development Bank. Tsipras said Greece is interested in the offer, and promised to thoroughly examine it. He will have a chance to discuss the invitation with the other BRICS leaders during the 2015 International Economic Forum in St. Petersburg."

In March, Russian President Vladimir Putin ratified the funding of the NDB funding set down at the 6th BRICS summit in Fortaleza in June 2014. The new bank will compete with the World Bank and the International Monetary Fund where funding of BRICS infrastructure projects and other developing countries' growth investment are concerned.

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Greece and Russia have been strenghthening economic and cultural ties since Prime Minister Tsipras took office earlier this year. Greece’s financial woes continue despite marathon talks to mediate between Brussels, Frankfurt, the IMF and other creditors. Tsipras is trying to unlock another €7.2 billion in bailout money in time to bolster a stagnant Greek economy. Finance Minister Yanis Varoufakis warned that Greece's finances are “a terribly urgent issue,” and the country could default by next month if no appropriate measures are taken.

On the front burner for the Greek government are the strategic deals Tsipras and Putin hammered out in April. The one with the most potential, the Turkish Stream gas pipeline project, promises jobs, revenue, and a breath of new life for the sagging Greek economy that primarily depends on tourism.

According to Moscow, there is ready help available for Greece, but President Putin has said Tsipras did not directly ask for help. Moscow has suggested direct financial assistance is available via buying Greek state assets and so on. So far there’s been no word on these avenues of remedial cooperation. The news of the BRICS investment bank offer appears today as the next best offer in the ongoing leveraging of Greece as a détente card. It remains to be seen how Tsipras will play this latest hand. 

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