April 2015 – MOSCOW, Russia – Russian President Vladimir Putin and Greek Prime Minister Alexis Tsipras said they want to restore ties between their countries amid signs of a schism among some European Union states on whether to maintain sanctions against Russia over the conflict in Ukraine. “Greece is a sovereign country with inalienable rights,” Tsipras said after meeting with Putin in Moscow on Wednesday. The Greek premier said he disagrees with the logic of sanctions, which he described as “an economic war,” and called for “a new spring in ties between our countries.” Putin said that Greece could play an enhanced role as a European energy hub for Russian gas exports via a new pipeline through Turkey and that the two countries needed to discuss how to “restore the pace of growth” in trade after volumes fell by 40 percent last year. EU sanctions along with falling oil prices have hurt Russia’s economy, which is sliding into its first recession in six years, while Greece is locked in talks with its euro partners on getting more bailout funds.
Tsipras is seeking ways to save or raise money as Putin looks for an ally to undermine the EU’s position. A unanimous vote of the 28 member states is needed to renew the sanctions when they expire in July, though ministers and diplomats across Europe said they expect Greece to fall into line. Putin said Russia understood that Greece was “forced” to vote for sanctions and was hurt by a retaliatory ban on food imports, but he couldn’t make an exception for one country. Tsipras condemned the sanctions as “senseless” last week. Russian Foreign Minister Sergei Lavrov said earlier Wednesday that Russia believed more and more EU states realized the punitive measures were “counterproductive” and have started to follow their national interests. The EU imposed sanctions after accusing the government in Moscow of sending troops and weapons to support pro-Russian rebels in eastern Ukraine, an allegation Putin rejects. “Implementing the Minsk agreement is key to overcoming this deep European crisis and to put behind the vicious circle of dead-end sanctions and the revival of Cold War thinking,” Tsipras said, referring to the February peace accord negotiated in Belarus to try to end the conflict in Ukraine.
Russia was Greece’s biggest trading partner in 2013, with two-way exchange of almost $10 billion, mostly due to imports of Russian natural gas, according to data compiled by Bloomberg. Greece is seeking to lift the ban for its agricultural products, though European Commission spokesman Daniel Rosario warned on Tuesday that member states should “speak with one voice to all our trade partners, including Russia.” Putin said Russia hasn’t received any request for financial aid from Greece. However, Russian-Greek joint projects could involve the provision of loans, including in the energy industry. Russia is ready to participate in Greek privatizations and Putin said he hoped Russian companies would be treated equally. Greece is locked in negotiations with euro-area countries and the International Monetary Fund over the terms of its 240 billion-euro ($261 billion) rescue.
The country is paying about 450 million euros to the IMF on April 9 and needs about 1.5 billion euros a month to pay salaries and pensions. The government aims to complete talks on a package of economic reforms needed to unlock more funding in time for a meeting of euro region finance ministers on April 24. Greece isn’t a “debt colony” and is “not a beggar asking different countries to solve its economic problems,” Tsipras told journalists in Moscow. Russia has reserves of about $361 billion, down from a record of almost $600 billion in 2008, after depleting the savings to defend the ruble. It can’t afford to help Greece substantially, said Joerg Forbrig, a senior program director at the German Marshall Fund in Berlin. –Bloomberg