Greece may be pursuing closer relations with Russia to counterbalance European pressure for austerity. However, despite Greece’s disenchantment with the EU, Russia will not be Greece’s financial savior.
Greece and the European Union (EU) have finally brokered a deal on the austerity measures Greece must implement in order to receive more bailout funds, avoiding a Greek exit from the Eurozone. Greece will keep the euro, for now, but the intense negotiations have increased tensions between Greece and its European creditors and prompted speculation that Greece may seek to reduce its dependency on Western Europe. In contrast to its strained relations with other EU countries, Greece has been deepening ties with Russia following the election of the left-wing Syriza party. This blossoming friendship has caused concern in Europe and the United States that Greece could be “inexorably moving away from the West, towards a more benevolent ally, a potential investor and a creditor.” Greece may be pursuing closer relations with Russia to counterbalance European pressure for austerity. However, despite Greece’s disenchantment with the EU, Russia will not be Greece’s financial savior.
When the left-leaning Syriza party came to power in January, it indicated a strong interest in repairing Greece’s ties with Russia and has taken clear steps in that direction. Greek Prime Minister Alexis Tsipras has been critical of Western sanctions against Russia, calling them a “road to nowhere” and offered to serve as a “link and a bridge” between Russia and the EU. In April, Mr. Tsipras and Russian President Vladimir Putin pledged to “restart and revive” bilateral relations, and Mr. Tsipras has even gone so far as to suggest the “new European security structure” must include Russia. The new Greek government has backed up such statements with action: Greece signed a $2.3 billion deal with Russia to complete the South Stream Pipeline, a project that will bring Russian gas to Southern Europe without having to go through Ukraine. Russia has been seeking a partner for this project for some time: an earlier attempt failed after Bulgaria suspended the deal under pressure from the EU.
Improved relations offer political benefits to both Russia and Greece, particularly vis-à-vis each country’s relationship with the EU. Greece sees Russia as a counter to the European Union’s increasing influence over Greek domestic policy. Frustrated by EU demands for further austerity and the erosion of their own county’s independence, Greek citizens admire Russia as a state that “upholds its sovereignty and defies the EU diktat.” According to Nicholas Spiro, Managing Director of Spiro Sovereign Strategy, Mr. Tsipras has gone to “great lengths to accentuate Greece’s cultural and historical ties to Russia as part of his efforts to reorient Greece’s economic and foreign policies away from conventional eurozone-centric ones.” In other words, Syriza wishes to extricate itself from the clutches of the EU so it can pursue its own economic and foreign policy priorities: a clear departure from Greece’s previous long-term foreign policy goal of maintaining close relationships with Europe and the United States.
While Greece clearly views a relationship with Russia as leverage in its negotiations with its European lenders, Russia’s interest in Greece is a bit more nuanced as it is rooted in its own difficulties with the West. Russia has actively encouraged “Greek defiance of the EU” due to its own conflict with Europe: after Russia annexed Crimea in 2013 and consistently violated Ukraine’s sovereignty, Europe imposed tough sanctions. Around 60–70 percent of Russians currently have an unfavorable opinion of the EU and ties between Russia and Europe are tenuous and full of mistrust, raising concern that Russia might attempt to buy influence in EU politics through financial assistance to cash-strapped Greece. Mr. Spiro argues that at the very least Mr. Putin wants to “showcase Russian influence in Europe” by courting such countries as Greece and Hungary, countering the expansion of the North Atlantic Treaty Organization (NATO) into Russia’s former sphere of influence.
Yet much of this talk of closer relations is just rhetoric: both Russia and Greece are using each other to increase leverage against a common (albeit temporary) adversary, the European Union. It is unlikely that Russia will provide significant financial assistance to Greece, or that Greece would accept such assistance if offered, despite speculation about the “prospect of Russia stepping in to bail Greece out.” Indeed, even prior to reaching a deal with the EU—a moment when Greece’s financial well-being was grave danger—Mr. Tsipras emphatically stated he would not ask the Russian president for financial assistance. Similarly, Russia promised to “refrain from using relations with Greece to divide the EU,” and Mr. Putin said he was not planning to provide assistance to Greece because the Greeks did notrequest financial aid. Moreover, Russia is facing its own economic troubles, due to tight economic sanctions and low oil prices. It is doubtful that Mr. Putin could provide the significant amount of financial assistance Greece needs to pay back its loans or recharge its economy. Given this situation, Greece’s recent flirting with Russia is mere posturing: an attempt to improve its negotiating position with the EU through intimating that Greece has options outside Western Europe.
A Russian bailout, however, is not a feasible option. A potential Greek-Russian alliance certainly strengthens the European community’s desire to secure a lasting deal that will keep Greece firmly inside the Eurozone and the EU. However, European lenders are also well aware that Greece ultimately will not pivot to Russia. Athens is simply trying to prove to its Eurozone creditors that it has powerful friends outside of the EU, hoping that Europe is fearful enough of pushing Greece closer to Russia through harsh fiscal measures. In short, Mr. Tsipras hopes that Europe’s wariness of Russia’s escalating aggression will soften Europe’s demands for austerity in Greece. However, the only sensible option available for Greece to extricate itself from this financial mess is through implementing the EU’s austerity measures. Russia, therefore, is not the answer to Greece’s economic recovery. Greece’s economic, security, and political future lies with the European Union and NATO). Nevertheless, European lenders need to tread carefully through this fragile and politically charged situation, for frustrated and desperate countries do not always pick the sensible option and Greece has other choices than to look in Moscow’s direction.