Greek Prime Minister Alexis Tsipras is headed to Russia April 8 to meet President Putin. With Russia and China emerging as an alternative to US-World Bank economics, the safe bet could be on a Russo-Greco bridge.
Greece’s Industrial Reform Minister Panagiotis Lafazanis and Syriza MP Thanasis Petrakos were in Moscow the last two days laying the groundwork for Prime Minister Alexis Tsipras’ meet with Vladimir Putin. As a squirming cauldron of edgy bankers, politicians, and generals west of the Bosporus look on with prescience at the prospects, Russia and China have a singular opportunity. As a caveat, Petrakos told Spiegel Online and other media:
"This visit is very important for Greece. We intend to deepen our relationship with Russia in the energy sector and thereby hope to gain a significant advantage."
A couple of weeks ago I reported on Tsipras’ acceleration of his meetup with Putin. With talks in Berlin and with Brussels upcoming, the Greek Prime Minister set out to play his country’s economic hand with the cards he had been dealt. Holding a Russo-Greco deal over the bankers’ heads, this was not genius, only deal-making 101. The follow up report the other day asking if Brussels had “warmed” to Tsipras’ ideas of debt consolidation spoke of potential cooperation between Greece and Russia in terms of commodities like gold, and “collateral” to ensure Russia’s “yield” on any deal would be guaranteed. What I did not speak of was long term gain for Russia, and all her investment interests, should Athens cement relations with Moscow. Here are some keen observations for predictive measures on the coming meetup.
To glimpse these other possibilities, a short lesson in geostrategy may be in order. Greece occupies a supremely strategic location in the eastern Mediterranean. The country's control over the Aegean Sea, and the subsequent control of sea lanes in between Mediterranean and Black Sea ports, as well as islands close to Syria and to shipping lanes coming out of Egypt’s Suez Canal, make her crucial to any NATO or regional defense strategy. Added to this, the Aegean Sea is estimated to hold over four billion barrels of oil, not to mention key potential in other sectors. To fully understand this, a brief geography and politics reminded is necessary.
Nixon Doctrine Backfire
In the centuries old game of European geostrategic maneuvering Greece and Russia have a special value. For the former, the theories of General Karl Haushofer and a new model of German lebensraum bear out Frau Angela Merkel’s Greece bailout dilemma in the coming weeks. As for Russia, at least in the case of Greece today, Alfred Thayer Mahan’s “The Problem of Asia” writings seem to be coming to fruition. For the sake of simplification, the United States, Germany, and especially NATO need Greece firmly in their grasp. Nay I’ll content here, the so-called western nations, will be in an untenable situation without the Greeks. That is, if some form of continued American-British hegemony is desirable. You see Mahan conceived of strategy before 1900 aimed at denying Russia commerce and emergence. His further theories also described “balancing” the Russia “threat” by creating a “force” in Turkey, Syria, and Mesopotamia (Iraq) to further prevent Russian expansion.
As we can easily see today, the “force” being exerted in 2015 is conflict and chaos. Truth be told, what we are witnessing is a backfire of a doctrine dreamed up by none other than Dr. Henry Kissinger, Richard Nixon’s Secretary of State, and the man you see defended by Senator John McCain in Senate hearings. It was Kissinger and Nixon who planned the realignment of power in the modern world, setting Russia and China against one another. His theories were later continued and expanded by Zbigniew Brzezinski, whom we see advising presidents continually since the Nixon years. Fast forward to today and a Russia benefiting from globalization, and the old game is not working so well any more. Unable to curtain Russia’s inevitable growth any longer, owing to the country’s vast untapped resources and emergent society, the NATO group have effectively lost (by their leaderships’ standards) the great Russophobic war. Now you’ve an admission ticket for what’s really set to happen in Moscow one month before the May 9th victory in WWII celebrations.
On April 8th Greece is set to become the most valuable piece of real estate among NATO nations. The people there having suffered long because of corruption inside and outside their borders, they’ve nothing to lose, no love lost for Germany or her NATO companions. In fairness, Greeks adore no nation so much as their own. I expect Vladimir Putin and China’s Xi Jinping have already set their minds as to what the “offer” will be. Having already agreed to join China’s Asian Infrastructure Investment Bank (AIIB) on April 14, Russia will in all likelihood make Tsipras a deal he cannot refuse. Some combination of massive Chinese money investment, a Gazprom deal from Russia of equivalent value, and Greece will be back in the game sans NATO, the euro, and worries about defense spending.
A Case for Debt Do Over
Not many of the investors (except for Boeing, Raytheon, and others) who flocked to read the first of my stories (metrics tell me interest in Greece intense) are aware Greece spends more than all but one of the 27 NATO countries after the United States. By the way, the US, Germany, and France are the beneficiaries of Greece’s arms expenditures, so a chunk of the country’s current budget goes to defense contractors. No doubt news of this creates even more of an austerity sore for Greek taxpayers. Where the metal meets the meat in Moscow, I’d be dully surprised if Putin’s finance people did not advise Greece to take every advantage, then to default and return to the drachma, at which time Russia and China could easily escalate the currency buying into Greek endeavors. After all, the Obama administration’s easing off Goldman Sachs, when that firm’s involvement in the Greek crisis has yet to be resolved, leaves Tsipras’ situation as a “catch-as-catch-can ” choice.
After all is said and done, since when is cheating and defaulting on obligations a crime these days? Greece can earn €300 billion in one day, and another €300 billion in Gazprom gas, China capital, and Russian arms deals (Mr. Lavrov gives hints) to shortchange western manufacturers. Add in free flights from Moscow and St. Petersburg for the tourist season, and Greece could be the richest country in eastern Europe before summer’s end. Who could really blame the Greek people? American bankers double dipping, German arms dealers recouping revenue from EU bailouts, 30 percent unemployment and Germans here calling the Greeks “lazy” slackers? My only question is “when” will Portugal, Spain, and Italy tell Frankfurt and Washington to bugger off.
In all seriousness, given the current situation in the United States, the UK, and in the EU debt wise, it seems clear “the west” cannot bid higher than China and Russia for Greece’s affections. The EU is in no position to either bail out Greece, or to contest Moscow in courting favor. The United States’ catastrophic foreign policy failures since 9/11, a debt bubble set to explode at home, and civil problems that would cripple any other country leave Washington scrambling to plug holes in the NATO alliance and the geostrategic limbo to come. The politicians in Washington not only have the world in a fix, but the American people are poised blindfolded on a fiscal cliff. David Stockman, former director of the Office of Management and Budget for President Ronald Reagan, says America is so addicted to debt a catastrophe is imminent. Experts from real estate legend Donald Trump to best selling author Robert Wiedemer have predicted as recently as this month a “bust” somewhere in between catastrophic and total collapse for the US economy.
All these variables and more weigh on Greece’s leader, the chorus of EU principals, and Washington looking on as the Russo-Greek summit awaits in Moscow. I was reading just now a sentient piece about Greece being able to seize opportunity in these critical times. Ideas like a Greek-Cypriote doctrine of common defense, “The New Grand Strategy of Greece and its Mediterranean Geostrategic Imperatives” by Alexander Th. Drivas, emerge as a new construct for the Greek people. It seems pertinent right here to point out Greece is actually a good investment for Putin, or anybody for that matter. The chart below shows the situation with deposits still higher than before the hyper inflated years that led to the country's crash. An infusion of business in Greece can surely fund full recovery, especially if the country changes currency and affiliations. I'm no economists, but I know Russia's fiscal experts have not overlooked the potential.
It is also no insignificant that Russian Foreign Minister mentioned at a recent meeting with Greek Foreign Minister Nikos Kotzias the Orthodox religious ties Russia and Greece share. To quote Lavrov:
"In 2016, there will be another important anniversary: 1,000 years of a Russian monastic presence on Mount Athos – commemorative events have been planned."
The gist of his ideas, rumors, and real tangible business do support my theory as to Putin’s upcoming offers to help Greece become the regional power it once was too. Clearly the Greeks stand to gain a lot more outside the EU and NATO, than they ever did clinging to bad ideas turned disastrous. Expect a big play in the news April 9th.