The Greek media story that Russia refused Greece's request for $10 billion appears to be an attempt to divert blame from Tsipras
- But what it is really going to do is infuriate Putin and the Russian government
This post first appeared on Russia Insider
The Russian government has formally denied reports that have appeared in the Greek newspaper To Vima that in the hours following the referendum Putin rejected a plea from Tsipras for $10 billion to support a new drachma.
The report in fact makes no sense. Putin would not have been in a position to accede to such a request if it were ever made.
Russia could only have provided Greece with $10 billion at such short notice from its National Welfare Fund. That is prohibited by the Fund’s rules which prevent the fund from investing in anything other than AAA rated securities. Greece’s rating has junk status so a loan to Greece would have breached the fund’s rules.
Putin did once order the fund to lend money to a borrower whose credit rating did not qualify for a loan from the fund. That was in December 2013 when he agreed to a loan to Ukraine using money drawn from the fund.
The Russians have regretted that decision ever since. Suffice to say that the Ukrainians have been arguing that because the loan was made contrary to the fund’s rules, that makes it a private debt --- rather than a public one --- entitling them to default on it.
The Russians are not prepared to be put in that position again and have repeatedly and publicly ruled out such a loan to Greece. It is inconceivable that Tsipras was not aware of this when he spoke to Putin since the Russians have repeatedly spoken about it.
The only other possible source of funds would have been as a pre-payment from Gazprom as part of a pipeline deal. The Russians did offer such a $5 billion pre-payment in April when Tsipras and the Greek government rejected it -- a fact to which To Vima admits.
The pipeline deal that was eventually signed in June did not come with a pre-payment and it is hardly credible that in the hours immediately following the referendum Tsipras could have believed that the whole deal could be renegotiated at short notice to provide for one.
If Tsipras did make such a request to Putin in the hours following the referendum --- or even in the weeks leading up to it --- then it would only have reinforced the Russians’ impression that they were dealing with an amateur who could not make his mind up and who could not be trusted.
It is far more likely --- and far more consistent with the known facts --- that the request for the $10 billion was never made.
Throughout their dealings with Tsipras the Russians repeatedly said that he had not asked them for financial help for Greece but that they would consider such a request if he ever made it.
It is possible that the Russians said that to help Tsipras save face, but it is more likely that they are telling the truth.
Varoufakis, who would be in a position to know, has never mentioned such a request in the detailed accounts he has given of the various negotiations, and it is difficult to see why he would not have done so if such a request had actually been made.
Why then, if it is untrue, is this story appearing now?
The short answer is because of the political crisis in Greece. As the crisis deepens it is becoming urgently necessary for Tsipras and his supporters to claim that there was no alternative and to shift the blame on someone else.
That appears to be the motive behind this story, with Putin, together with Tehran and Beijing --- who supposedly also refused Tsipras’s requests for help --- being cast as the people who let down Greece in its hour of need, leaving Tsipras with no choice but to submit to the EU’s demands.
Unfortunately this incident is likely to have serious repercussions.
I have already written of how Tsipras’s manipulative approach to the Russians will have offended and infuriated them.
This latest incident is going to increase the damage significantly.
Putin has repeatedly made known that nothing infuriates him more than to have his confidential discussions with foreign leaders misused to peddle distorted or fabricated versions of things he has privately said.
He has publicly complained about how it was done by Anders Fogh Rasmussen when he was Prime Minister of Denmark.
When Jose Manuel Barroso, the President of the European Commission, did the same thing during the most intense period of the Ukrainian conflict last year, Putin threatened to publish the stenographic record of the whole conversation, forcing Barroso into a public retraction.
If Putin thinks Tsipras has done the same thing, then it will have damaged irreparably Putin’s confidence in him.
Putin will anyway be more careful from now on about what he says to any visitors who come to him from Greece.
This post first appeared on Russia Insider
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