Rus­sia and Greece may team up

The two lead­ers could try to col­lab­o­rate to cir­cum­vent cen­sure and sanc­tions from Euro­pean neigh­bors.

Los Angeles Times - - THE WORLD - By Carol J. Wil­liams carol.wil­

As Rus­sia and Greece each en­dure strained re­la­tions with the rest of Europe, their lead­ers have been pon­der­ing how they might col­lab­o­rate to side­step their Western neigh­bors’ sanc­tions and cen­sure.

With his Balkan na­tion on the brink of eco­nomic col­lapse, Greek Prime Min­is­ter Alexis Tsipras on Fri­day paid his sec­ond visit in less than three months to Rus­sian Pres­i­dent Vladimir Putin to sign a lu­cra­tive pipeline con­struc­tion deal and, pre­sum­ably, to dis­cuss what Euro­pean Union mem­ber Greece might do to en­sure that Rus­sia re­ceives re­lief from sanc­tions when cur­rent ones ex­pire next month.

Krem­lin of­fi­cials de­nied that Tsipras asked for fi­nan­cial aid dur­ing his meet­ing with Put in on the side­lines of the an­nual St. Peters­burg In­ter­na­tional Eco­nomic Fo­rum. But two se­nior of­fi­cials had said be­fore the meet­ing that Moscow was open to con­sid­er­ing a loan to help Athens avert de­fault on bailout obli­ga­tions due to in­ter­na­tional cred­i­tors.

In his ad­dress to the an­nual gath­er­ing of multi­na­tional chief ex­ec­u­tives and Rus­sian oli­garchs, Tsipras blamed the mis­guided Euro­pean Union poli­cies for the Greek eco­nomic cri­sis.

“The EU should go back to its ini­tial prin­ci­ples of sol­i­dar­ity and so­cial jus­tice,” Tsipras, a for­mer com­mu­nist, said in lam­bast­ing aus­ter­ity mea­sures im­posed on Greece in ex­change for its $270-bil­lion bailout, mostly fi­nanced by EU col­leagues. “En­sur­ing strict eco­nomic mea­sures is lead­ing us nowhere. The so-called prob­lem of Greece is the prob­lem of the whole Euro­pean Union.”

Tsipras cast Greece as a ship nav­i­gat­ing trou­bled wa­ters as it faces a June 30 dead­line for a $1.8-bil­lion loan pay­ment that it can’t cover with­out bor­row­ing more. Athens’ cred­i­tors are re­fus­ing to pro­vide ad­di­tional cash un­til the far-left gov­ern­ment, which took power in Greece in Jan­uary, comes up with a cred­i­ble plan to straighten out do­mes­tic fi­nances.

“We are now in the mid­dle of a great storm,” Tsipras told the St. Peters­burg gath­er­ing. “But we are a sea­far­ing na­tion that know show to nav­i­gate through storms and is not afraid of head­ing to new seas and reach­ing new har­bors.”

The quest for new refuge sounded to many like an ap­peal for a Rus­sian loan to help Athens with the loom­ing debt pay­ment. But Krem­lin spokesman Dmitry Peskov told jour­nal­ists that Tsipras made no ap­peal for di­rect fi­nan­cial aid dur­ing his meet­ing with Putin.

The Greek leader did go home with a $2.77-bil­lion deal to get in on Rus­sia’s im­pend­ing mega-pro­ject to reroute nat­u­ral gas de­liv­er­ies to Western Europe through Tur­key, by­pass­ing Ukraine, where many of Moscow’s pipe­lines are routed. Re­la­tions with Ukraine have de­te­ri­o­rated se­verely since Moscow’s seizure of the Crimean penin­sula last year and its sup­port for pro-Rus­sia sep­a­ratists oc­cu­py­ing two large re­gions of eastern Ukraine.

Greece and its ma­jor lenders— the In­ter­na­tional Mon­e­tary Fund, the Euro­pean Cen­tral Bank and the Euro­pean Com­mis­sion— have been dead­locked in talks aimed at draft­ing a new­plan for re­duc­ing the stag­ger­ing debt car­ried by Athens. The latest ne­go­ti­at­ing ses­sion, on Thurs­day, ended with no progress to­ward an agree­ment and harsh words from the cred­i­tors over Athens’ fail­ure to bring new pro­pos­als to the ta­ble.

The fruit­less meet­ing in Lux­em­bourg lasted less than an hour, and its fail­ure to break a weeks-long im­passe prompted the Euro­pean Union to call an emer­gency sum­mit for Mon­day night to dis­cuss ways to avert fis­cal im­plo­sion in Greece— or how the re­main­ing Eu­ro­zone states can guard against dam­age to their own economies if the cur­rency union suf­fers its first dropout.

Greeks have al­ready be­gun pulling their eu­ros out of Greek banks, with at least $3.4 bil­lion­worth with­drawn last week, the Greek news site re­ported.

The run on de­posits prompted the Bank of Greece to ap­peal to the Euro­pean Cen­tral Bank on Fri­day for a $3.95-bil­lion emer­gency liq­uid­ity in­fu­sion to en­sure that banks can open Mon­day.

Rus­sia is suf­fer­ing its own eco­nomic cri­sis be­cause of sanc­tions im­posed by the Euro­pean Union and the United States over its ag­gres­sion in Ukraine. The Rus­sian econ­omy has also been hit hard by the past year’s sharp drop in the price of oil, on which the Krem­lin de­pends for more than half of its an­nual bud­get.

Any Rus­sian as­sis­tance to Greece could pay off for the Krem­lin, though, as Athens might be per­suaded to with­hold ap­proval of a planned ex­ten­sion of sanc­tions when the cur­rent ones ex­pire next month. Un­der Euro­pean Union rules, all 28 mem­ber na­tions have to ap­prove such ac­tions, and Tsipras has been harshly crit­i­cal of the sanc­tions that have trig­gered Rus­sia’s re­tal­ia­tory boy­cott of Euro­pean food ex­ports.

Kenzo Tri­bouil­lard AFP/Getty Im­ages

IN PARIS, peo­ple demon­strate against the troika of the Euro­pean Union, Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund.

Alexan­der Zemlianichenko As­so­ci­ated Press

RUS­SIAN Pres­i­dent Vladimir Putin, left, and Greek PrimeMin­is­ter Alexis Tsipras ar­rive Fri­day for the St. Peters­burg In­ter­na­tional Eco­nomic Fo­rum.

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