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Stumbling Into The Unknown
Can Russia Save Greece? Will It?


As the run on Greek banks accelerates in the wake of news that no agreement was reached yesterday, warnings are beginning to appear that Greek banks might not be able to open their doors on Monday. To remain open, those banks need access to ECB funds, but with Greece nearing default on its IMF loans and talks with the EU deadlocked, it’s not clear how the ECB could justify throwing more good money after bad. The Times of London:

During yesterday’s talks, Benoît Coeuré, an executive board member of the ECB, was asked by Jeroen Dijsselbloem, the Dutch chairman of the group of European finance ministers, whether Greek banks would open ­today. He replied: “Yes. Monday, I don’t know.”

And the bad news keeps coming. Tax revenue collapsed, widening the hole in Greece’s finances. And analysts are beginning to look at the consequences of a crisis for tourism, a mainstay of the weak Greek economy and one of the country’s most reliable sources of foreign cash. Should the government default and the money dry up, it’s likely that there will be widespread problems that affect tourists: ATMs won’t dispense money; workers in key industries and public offices will go on strike, quite possibly paralyzing transportation. No money, no banks, no tourists and a radical left wing government sitting in Athens—it’s not looking like one of Greece’s happier summers coming up.

But Prime Minister Alexis Tsipras has a plan: he has flown off to St. Petersburg to Russia’s biggest annual business conference to have a chat with Vladimir Putin.

Ahead of the Putin sit-down, however, his energy minister had already announced that Greece had signed on with Russia to build a section of the Turkish Stream pipeline on Greek territory. The financing for the project will come, at least in part, from the Russian state development bank, with participation from other smaller Russian banks also likely. The Russian gas giant Gazprom will not own the pipeline, with ownership stakes instead being being shared by Russia and Greece.

When asked whether Russia is considering offering other kinds of financial assistance to Greece, Kremlin spokesman Dmitry Peskov said that it was premature to speculate on such things as no request had yet been received from Athens. “Let us wait for the conversation,” he told reporters.

Business leaders attending the business conference were dismissive of the possibility of Russia being able to make a meaningful difference to Greece’s bottom line, however. “The size of the problem is so big, Russia can’t allow itself to give anything near what is needed,” one fund manager told the Financial Times. “Maybe they can give a symbolic amount but even that is difficult. I don’t see what Russia could possibly offer him.”

We shall see soon enough.

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  • Pete

    Alexis Tsipras is an utter fool.

    • Kevin

      True. But even a fool who is drowning will clutch at those around him and pull them under with him….

      I’m curious what the mood in the Greek military and security services is. I doubt they will move against him, but if his popularity crashes amidst the forthcoming chaos the odds start going up… (I doubt they want the responsibility to run the country so if it comes to that it would most likely be a quick deposing of the current gov’t followed by a national unity gov’t or snap elections… perhaps like what the EU orchestrated in Italy.)

      • Pete

        “so if it comes to that it would most likely be a quick deposing of the current gov’t followed by a national unity gov’t or snap elections… perhaps like what the EU orchestrated in Italy.”

        I think you’re right.

      • Andrew Allison

        It does rather look as though Tsiparis & Co., are willing to impose penury upon the populace rather than admit that they make unfulfillable promises in order to get elected. My sense is that the military and security services have been more-or-less neutered. Seems to me the most likely outcome is dissolution of parliament and a new election — which will do nothing to change the economic fact that, thanks to a succession of irresponsible governments, the Greeks have been living off OPM for decades and it has run out. This will be no consolation to the victims, but is inescapable.

    • Andrew Allison

      I think he’s just inexperienced, out-of-his-depth and relying on a mentor who is too full of himself.

  • Сергей

    Yes, we will see it soon, Tsipras and Putin meet at the International Economic Forum in St. Petersburg. If Greece will block economic blackmail against Russia – Russia often gets benefits can be sent to Greece in the form of investments.

    Да мы увидим это скоро, Ципрас и Путин встречаются на международном экономическом форуме в СПБ. Если Греция заблокирует экономический шантаж против РФ – часть получаемой Россией выгоды можно направлять в Грецию в виде инвестиций.

    • Andrew Allison

      Google is not a trustworthy translator. What I think you meant to say, in effect, is that Russia may be willing to bribe Greece to block economic sanctions. Aside from the fact that the Russian economy is going down the toilet and it obviously can’t afford both an arms race and a Greek bailout (, Greece doesn’t have a veto on sanctions. Something much, much stronger than Bamboo is required to produce such hallucinations.

      • Сергей

        It is the US hallucinations. Russia’s political isolation – the Russian economy in ruins …. Blah blah la. Oh – and they call America the world leader …

        Это у США галлюцинации. Россия в политической изоляции – экономика РФ в руинах…. Бла-бла-ла. Боже – и они называют америку мировым лидером…

  • f1b0nacc1

    I can think of very little that would be more useful to the West than saddling Putin with the Greeks….please let this happen…

  • Fat_Man

    If the Russians want Greece it should be given to them, with a pretty pink bow. Better that the Russians should be stuck in that swamp.

    • CapitalHawk

      So long as the British hold on to Gibraltar and Egypt remains friendly with the US, I agree with you.

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