Europe Letter: Russian interest in Greece is concern for EU

European leaders need an effective strategy for dealing with Moscow

Two themes that could have profound implications for Europe will dominate today's EU summit in Brussels. Ukraine is expected to top the agenda, as EU leaders are debriefed by German chancellor Angela Merkel and French president François Hollande on the summit in Minsk.

Greece and the standoff between Athens and its international creditors will also be discussed as leaders grapple with a possible Greek exit from the euro zone, an issue that many believed had been consigned to history.

The two issues, though different, are connected.

The resurgent Greek crisis has unsettled Europe. On many levels, there is sympathy for Alexis Tsipras’s position. More than seven years after the start of the financial crisis, serious questions are now being asked about the austerity policy promulgated by Europe.


That Greece, almost five years into a bailout, is still struggling with low growth and high unemployment, is a shocking indictment of both Brussels’ policy of fiscal consolidation and the specificities of the Greek bailout drawn up by the troika.

Nonetheless, EU leaders are unlikely to agree to a significant recasting of Greek debt, a position that has hardened over the last two weeks amid frustration with the Greek government’s apparent unwillingness to compromise.

Despite a confused response at first, the Irish Government has now belatedly rowed in behind other EU countries, with Minister for Finance Michael Noonan toughening his tone in recent days and warning that Greece was making "impossible" demands for a bridging programme.

Shadowy presence

While Europe appears to hold the strongest hand in the ongoing brinkmanship with Athens – the absence of a contagion threat this time means the euro zone may be more willing to sacrifice a country representing 2 per cent of euro zone GDP – the shadowy presence of


could inform how Europe handles the Greek crisis.

It is no secret that Moscow has made overtures to the new Greek government. While Tsipras appeared to rule out accepting money from Russia two weeks ago, Greece's defence minister and head of the Independent Greeks Panos Kammenos this week raised the prospect of a 'Plan B' for Greece.

"We have other ways of finding money. It could be the United States at best, it could be Russia, it could be China or other countries," he said.

Yesterday, Greek foreign minister Nikos Kotzias flew to Moscow for talks with his Russian counterpart Sergei Lavrov, solidifying suspicions about the ruling coalition's pro-Russian sympathies after Tsipras met the Russian ambassador on his first day in office. Greece has also opposed the imposition of further EU sanctions on Russia, though it did step back from blocking a recent EU decision to expand the Russian sanction list.

As the EU grapples with the Ukraine crisis and a deteriorating relationship with Moscow, the prospect of Russian involvement in the Greek standoff is emerging as a serious concern. While there are doubts about Russia's ability to finance Greece given its own economic situation, EU leaders, and in particular European Council president Donald Tusk, are highly sensitive to any perceived meddling of Russian in EU affairs. Suspicions that Moscow is supporting Eurosceptic far-right parties from Bulgaria to France are deeply unsettling for many Europhiles, including the German government.

Pre-election promises

The Tsipras government has consistently said it wants to remain in the EU, a position supported by most Greeks, but whether the government is willing to renege on some of its pre-election promises in order to meet its EU lenders’ demands is another matter.

The fact that Kammenos, the leader of Syriza’s junior coalition partner, has been pursuing contacts with the Kremlin is also significant. Kammenos’s support is vital to the survival of the Tsipras government.

As EU leaders gather for yet another crisis summit to consider the Greek issue, it is worth remembering that the geopolitical context is very different than at the height of the euro zone crisis. With the death toll in Ukraine passing 5,000 and Europe facing the prospect of a frozen conflict near its borders, the EU is waking up to the fact that it needs a coherent strategy to deal with Russia.

Just as the Allied powers tried to keep Greece out of communist hands at the end of the second World War, the need to keep Greece out of the Russian sphere of influence may be just the incentive needed for Europe to keep Greece in the euro zone, whatever the cost.