A smart balancing act: Greece strengthening ties with Russia

Lotte van Buuren, 9 April 2015

Just before today’s deadline to pay back €430m (£330m) to the International Monetary Fund,  Greek Prime Minister Alexis Tsipras made a highly controversial visit to Moscow yesterday. The press conference revealed that Tsipras has sought neither financial assistance from Russia nor a removal of the Russian ban on the import of Greek fruits. Instead, Tsipras and Russian President Vladimir Putin agreed on a joint action plan boosting bilateral trade and Russian investment in Greece. In addition, the two leaders discussed possibilities to reduce Greece’s huge deficit and to promote cooperation more broadly.

Most controversially, a provisional energy deal on the Turkish Stream Project was signed. Launched by Putin and Russian gas company Gazprom, the new pipeline is expected to provide Russian gas to Europe through Turkey, meaning that Greece would play a key role as a major energy hub. The Greek commitment to this project comes at a time when the EU is investigating Gazprom and trying hard to increase transparency in agreements with external energy suppliers. More importantly, this deal will not further the EU’s objective to reduce its dependence on Russian gas by ambitious projects like the European Energy Union.

In another blow to European unification efforts, Tsipras has condemned the EU’s economic sanctions against Russia once more as engendering a Cold War climate. Despite the fact that he was quick to add that adherence to the Minsk peace agreement by all parties was the condition to lift the sanctions, it is clear that Tsipras is allowing Putin to drive a wedge between European countries concerning their stance on Russia. No matter how hard German chancellor Angela Merkel and French President Francois Hollande tried to trivialise this visit, they are well aware that it harms the European efforts to stand united in punishing Russia for annexing Crimea and stirring up the violent conflict in eastern Ukraine.

The increasing economic cooperation between Greece and Russia is all the more frustrating for EU leaders considering that officially, Greece did not break any rules. European countries are still free to pursue foreign policy according to national preferences and Tspiras refrained from crossing implicit red lines of asking Russia for money directly and fixing a Greek exception for Russian import bans. Apart from some irritation, a major backlash in EU-Greek negotiations following this visit is, therefore, unlikely. A tougher European stance on bailout conditions, moreover, could quickly lead to a Greek exit from the EU – a scenario that EU leaders are desperately trying to avoid.

At the same time, Tsipras is aware of the Greek religious, cultural and historic ties with Russia and the popular support in Greece for cosying up to Putin rather than negotiating another bailout in Brussels. It may be too optimistic for Greece to act as a bridging country between the EU and Russia – a role Tsipras has argued his country should play – but it has a fair chance of increasing Greece’s bargaining position in negotiations with the troika. The Greek threat of strengthening economic and energy ties with Russia may be as dangerous for the EU as direct Russian financial assistance to a European country.