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Wikistrat paper: Russia-Greece relations

July 6, 2015

I have contributed a short piece to this paper on Russia-Greece Relations as part of the Wikistrat series of reports.

Russia-Greece Relations

Wikistrat, Russia, Greece relations

With negotiations between the European Union (EU) and Greece at a standstill and the country’s economic crisis worsening further, decision-makers in the West are worried that Athens is heading towards the open arms of Russia.  But what would Russia have to gain by improving ties with Greece?

To answer this question, Wikistrat asked four of its Russia experts to assess bilateral relations and to analyze the Russian interests in Putin’s apparent move towards Greece.

Here are the insights they generated.  Russia-Greece Relations

Key points:

  • The probability of Russia bailing out Greece is low. Russia is facing a difficult financial crisis of its own, with low foreign cash reserves and Western sanctions targeting its banking sector. It would rather buy Greek state-owned assets when they are privatized, thereby acquiring a more tangible stake in its economy. Instead of a bailout, Moscow is trying to get the New Development Bank members involved – mainly China – by promoting the move as one that would increase the institution’s prestige.
  • The $2 billion gas deal between Greece and Russia is a win for Moscow. The gas pipeline and distribution hub in Greece should be up and running by 2019 or 2020, around the time Gazprom’s contract with Ukraine ends.  This will ensure smooth gas delivery to the Balkans, Hungary, Italy and Austria, and divorce Russian-Ukrainian relations from their perpetual gas dispute.
  • Greece and Russia’s game of flirtation serves both sides when dealing with the EU. Both parties benefit from the negotiations themselves, making tactical gains at minimal cost or risk. Greece gets to pressure the EU with the threat of moving closer to Moscow, facilitating a favorable conclusion to debt restructuring negotiations, and Russia gets to cause tension among EU members, serving its agenda for Ukraine.
  • Russia’s ultimate goal is to gain an ally within European institutions, causing divisions therein. This would be a strategic asset, as the EU is a key factor in setting the tone for the West’s policy towards Russia regarding its involvement in the Ukrainian conflict and its occupation of Crimea.
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