Athens diplomacy looks to Moscow

Ariel Noyola Rodríguez

05/02/2015

Opinión

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Greek Prime Minister Alexis Tsipras

Without a doubt, the intransigence of European authorities has nourished the way for Athens to adopt positions closer to those of Moscow. To date, the creditors maintain their refusal to modify the terms of debt repayment (Greece has a debt of 315 billion euros, 175% of their GDP). Weeks before the election, the European troika (made up of the International Monetary Fund, the European Central Bank and the European Commission) had made it clear that if Athens dared to abandon the programmes of structural adjustment, sources of external finance would remain closed.

Nevertheless, it is obvious that any strategy of recuperation by the new Greek administration, directed at increasing economic growth and creating employment, is incompatible with the proposals of the European troika[1]. In the past five years, the policies of fiscal austerity have led the Greek economy to suffer a shrinking of 25% of the GDP.

The programmes of structural adjustment not only failed to stimulate economic activity, but reinforced the depressive spiral: deflation became chronic (in December of 2014, consumer prices saw a fall of 2.6% in yearly terms), the unemployment rate went up to 25% and the rate for youth unemployment reached 50%. In spite of this, officials in Brussels insist on carrying forward, on an even larger scale, the privatization of public enterprises and services, the lowering of social expenditures, labour deregulation, etc.

It should also be noted that the conflictive state of affairs in Europe is not limited to the economy. It includes geopolitical tensions in the eastern region for territorial control and sovereignty over strategic natural resources. After the confrontations between nationalists and separatists in the city of Mariupol (situated in the East of Ukraine), in the last week of January the North Atlantic Organization Treaty (NATO) accused the Russians for the acts of violence[2]. One day later, the European Union issued a communiqué in the name of their 28 members, calling for a new round of economic sanctions against the Kremlin[3].

However, the governmental office of Alexis Tsipras (Prime Minister of Greece) refused the call[4]. On Wednesday, January 28, Panagiotis Lafazanis (in charge of the Ministry of Productive Reconstruction, the Environment and Energy) replied in categorical terms: “Greece has no interest in imposing sanctions on Russia. We have no differences with Russia and the Russian people”[5].

In an extraordinary way, Greek diplomacy turned the Ukrainian crisis and the stance in relation to Russia, into their bargaining chips in the negotiations with their creditors. On the one hand, they demanded a respectful dialogue on the part of the European Union. It is not acceptable to treat Greece as a “pariah State” because of its high level of indebtedness.

On the other hand, Greece reaffirmed their position against Brussels unilateralism. “Greece should not become part of the problem [nor] break the historic relations with Russia but it can play an important mediation and promoting role in the negotiations between Russia and Ukraine [...] the European Union should look at what it wants to do with Russia over the long term, rather than reacting in a morally direct and frank but spasmodic way”, declared the minister of Foreign Affairs of Greece, Nikos Kotzias[6].

For their part, the Kremlin is attempting, through the Greek Foreign Ministry, to diminish the intensity of the economic offensive undertaken by the European Union and the United States. The fact is that if the new penalizations were to include the energy and defence sectors, as well as blocking access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the damage to the Russian economy could be dramatic.

President Vladimir Putin is looking at the outcome of a deepening attack against Russia; so if Alexis Tsipras fails to reach an agreement with Brussels, his government might well support the Greek economy. “We can imagine any situation, so if such [a] petition is submitted to the Russian government, we will definitely consider it, but will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say. If it is submitted we will consider it”, said Anton Siluanov, Russian Finance Minister, in an interview for CNBC[7]. In response Wolfgang Schäuble, German Finance Minister, launched an ultimatum to the Greek Foreign Ministry: “I don’t believe that Russia can replace European solidarity”[8].

Athens has no interest in converting its relations with Russia into a burden, but rather into a decisive support. In consequence, until the deadline of the precautionary line of credit, next February 28, the efforts of the Greek government will be concentrated on dialogue with the troika. “We are in substantial negotiations with our partners in Europe and those who have lent us. We have obligations towards them”, declared Alexis Tsipras in Nicosia, at the end of a meeting with the President of Cypress, Nikos Anastasiades[9]. At the same time, he emphasized that so far there are no intentions to abandon the Monetary Union on the part of his government. “The EU and eurozone would be both dismembered along their Southeastern flank without Greece and Cyprus”, he concluded.

Nevertheless, he considers it necessary to dismantle the mechanisms established to control the loans granted: “I believe that the time has come to substitute the troika because Europe needs breathing space. The troika has been criticized for its lack of legitimacy. Its substitution would be an important institutional step for the wellbeing of Greece and of Europe”[10].

The approval by Jean-Claude Juncker (President of the European Commission) for dismantling the mechanisms of the troika in the negotiations with Greece, as well as the support of President Barack Obama for the plans of Prime Minister Alexis Tsipras in economic matters, highlight the apprehension of Brussels and Washington due to the electoral triumphs of the left (Syriza in Greece, Podemos in Spain, etc.) and their diplomatic proximity to the Russian Federation.

In a word, the victory of Syriza in the January 25 elections over neoliberal capitalism unleashed spectacular movements of the Greek Foreign Ministry, which are rapidly transforming the economic and geopolitical map of the European continent, in alliance with Moscow.

Ariel Noyola Rodríguez, economist graduated from the Universidad Nacional Autónoma de México.

Translation: Jordan Bishop (for ALAI)

[1]«Syriza has bold solutions to the forces of austerity that are strangling Europe», by Costas Lapavitsas, The Guardian, 2 February 2015.

[2]«EU to tighten noose on Russia, expected to extend sanctions», Russia Today, 29 January 2015.

[3]«Statement of the Heads of State or Government of the Union on the attack Mariupol», Voltaire Network, 27 January 2015.

[4] «Grecia denuncia manipulación de la Unión Europea sobre Ucrania», Voltaire Network, 28 January 2015.

[5]«Greece Steps Back Into Line With European Union Policy on Russia Sanctions», by Andrew Higgins, The New York Times, 29 January 2015.

[6]«Foreign Minister: 'Greece should not be treated as a pariah'», Phantis, 1 February 2015.

[7]«Russia extends olive branch to Greeks», by Geoff Cutmore and Jenny Cosgrave, CNBC, 30 January 2015.

[8]«Germany's Schaeuble doesn't like Greek proximity to Russia», Reuters, 2 February 2015.

[9]«Greece not negotiating financial aid from Russia 'right now' - PM», Russia Today, 2 February 2015.

[10]«Greece says not in 'Wild West showdown' with Europe», Reuters, 3 February 2015.