Greece: Tsipras to seek help from Putin in Moscow visit
Greek prime minister seeks to confound his European creditors with the prospect of a Russian bailout
Greek Prime Minister Alexis Tsipras visits Moscow Wednesday, ostensibly to negotiate an export deal, but with the real object of provoking shock and awe to his European creditors.
The Eurogroup of 19 member states, Greece’s principal creditor, is still locked in tense negotiations with Tsipras’ Finance Minister Yanis Varoufakis. On Friday, Eurogroup President Jeroen Dijsselbloem said there was "still a long way to go" on Greek proposals for economic reforms.
Meanwhile, an official in Athens told the press Tuesday that Greece would run out funds by the end of April to run its banks and public services.
It would seem an odd time for the Greek leader to go to Moscow for a discussion on soft fruit exports. Not that the issue isn’t important to Greece: In the January-to-October period last year, Greek exports of fresh fruit and vegetables fell by 4 percent in value terms to €765 million compared with the same period in 2013, according to statistics from Freshmarket.eu. This occured despite an increase of around 8 percent in overall volumes exported. Unable to enter the Russian market, Greek produce has instead been shipped to countries, including Serbia, Macedonia and Albania at considerably reduced prices.
Tsipras would score a coup by getting Russia to lift its reactive sanctions against Western food imports just for Greece. There is also talk of a natural gas deal that would extend the Turk Stream pipeline which runs from Russia through Turkey to Europe into Greece.
But most observers think he has other objectives. Tsipras could ask Putin for interim funding that would match the next tranche of the European bailout of €7.2 billion ($7.8 billion). Russia, as one of the world's largest exporters of oil, has ample access to funds, and could make a loan of that size.
Tsipras took time on March 31 to criticize Western sanctions against Russia for its role in the Ukraine conflict. Tsipras called the sanctions "a road to nowhere” in an interview with Russian state news agency TASS Tuesday, just ahead of his visit.
"We don't agree with sanctions. I believe that this is a road to nowhere. I support the point of view that there is a need for a dialogue and diplomacy, we should sit down at the negotiating table and find the solutions to major problems,” he said in comments published Tuesday by TASS.
As Greece is an EU member state, and, incidentally, completely dependent on loans from the European Central Bank to keep the country afloat, it seems unlikely that Tsipras would break with EU policy on the sanctions. But Tsipras seems inclined to take best advantage of his visit to Moscow.
"Some would also argue that the visit to Moscow is just a negotiating ploy in regard to its priority to renegotiate Greece's (bailout) program," Timothy Ash, head of emerging markets at Standard Bank, said in a note Wednesday.
"This might suggest that, in exchange for concessions therein, the Greeks may ultimately fall into line with the consensus view within the EU over Ukraine," Ash said.
He added that the recent Greek elections had added "yet another not insubstantial complication" to the crisis between Russia and Ukraine, and "my own discussion with Western government officials suggests they are fully aware of this."
That Tsipras is taking a double line in Russia is also suggested by his government’s official telling the press Tuesday that Athens will not actively oppose the EU line.
But, as Ash notes, Tsipras will seek to suggest that Russia can offer funds to Greece to give it more time and more leverage in its bailout negotiations.
While Russia could certainly provide funds, analysts ask what Russia would get for its money? Would Greece leave NATO? Leave the EU to join the Eurasian trade bloc that Russia sponsors?
Since any of those steps seem most unlikely, analysts believe Tsipras visit to Moscow may not carry much political weight.
Last Modified: 2015-04-08 08:11:32
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