EU-Russia Antagonism in the Eastern Mediterranean

The rise of SYRIZA, a radical left-wing political party, to power in January 2015 added a new imponderable piece to the Eastern Mediterranean geopolitical architecture. Party members and official statements by several SYRIZA leaders appeared to be clearly directed against the eurozone and NATO membership. They also came out against foreign military bases in Greece - including allowing the US to remain - and were extremely pro-Russian. Nevertheless, the Greek Left’s favourable attitude towards President Vladimir Putin’s Russia turned out to have serious ramifications for the country’s domestic and external course.

The rise of SYRIZA, a radical left-wing political party, to power in January 2015 added a new imponderable piece to the Eastern Mediterranean geopolitical architecture. Party members and official statements by several SYRIZA leaders appeared to be clearly directed against the eurozone and NATO membership. They also came out against foreign military bases in Greece - including allowing the US to remain - and were extremely pro-Russian. Nevertheless, the Greek Left’s favourable attitude towards President Vladimir Putin’s Russia turned out to have serious ramifications for the country’s domestic and external course.

Pro-Russian views and feelings are not exclusive to the Greek Left. There is a widespread perception in Greece that it shares common religious convictions and political, cultural, and historical roots with Russia as well as common economic and political interests. In fact, the two countries have, in recent years, developed economic and political ties in along various sectors and dimensions, both bilateral and multilateral, and many Greek foreign policy analysts, among them Greek foreign minister Nikos Kotzias from the SYRIZA-led government, have argued that closer ties with Russia should be part of a multi-dimensional Greek foreign policy. SYRIZA’s coalition partner, the right-populist party Independent Greeks, was feeling even more comfortable with Putin’s ideology of traditionalist nationalism, social conservatism and religious affiliation, which stands in contrast to SYRIZA’s deeply rooted atheism.

Many Greeks who opposed early on the rescue package for Greece containing harsh austerity measures and imposed by the European Union, the European Central Bank and the International Monetary Fund, asked the Greek government in 2010 to consider a loan from Russia instead. But when Greek Prime Minister George Papandreou visited Moscow, Vladimir Putin advised him to go to the IMF for funding. Greece had no other choice but to accept the EU and IMF bailout-policy.

The SYRIZA-led government’s perspective on Greece’s real potential in the international arena have turned also out to be naive and unrealistic. The more the Europeans did not yield to leftist demands for a revision of the bail-out policy towards Greece and a writing-off of latter’s sovereign debt, the more intensely Athens attempted to show the Europeans that it could turn east, playing Russia off against the EU. Thus, it repeatedly denounced the international sanctions against Moscow in the wake of the war in Ukraine as harmful for Europe and counter-productive for EU strategy, security and foreign policy, formulating instead the opinion that Ukraine should be a bridge between the EU and Russia, and not an area of division.

Drawing upon Greece’s history in the Western camp after the Second World War, Athens tried once again to exploit its important and very sensitive for Western interests geo-strategic position. During the Cold War, Greece’s location on NATO’s southeastern flank was a powerful trump card to extort military and economic aid aimed at preventing Greece from falling under the influence of the Soviet Union. This was the rationale behind the Truman Doctrine and to some degree also the Marshall Plan. Invoking a possible state of collapse given the tremendous flood of migrants into Europe as well as Russia’s incompliance with EU Policy in Eastern and South-Eastern Europe, was perceived as an unbeatable diplomatic tool to enhance the country’s bargaining leverage in its competition with EU institutions.

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Notably, in April 2015, Greek Prime Minister Alexis Tsipras traveled to Moscow. Since he was the first European leader to travel to Moscow following the assassination of Boris Nemtsov, his visit provoked strong criticism from Western analysts that his trip might make him an “useful idiot” for Moscow and Putin, who was isolated at that time. The aim of the visit was to confirm a possible multibillion-dollar pipeline deal - the resurrection of the Russian-sponsored South Stream project under the new name, Turkish Stream. Greek officials had negotiated the deal a few weeks earlier with the head of the Russian energy giant Gazprom, ahead of the European Union’s announcement of antitrust charges against Gazprom and the company’s determination to stop gas transit through Ukraine after 2019.

Given the fact that Greece had already been chosen for the Trans-Adriatic pipeline (TAP) that is to deliver gas from Azerbaijan to the European market, this deal could have serious political implications. The so-called TransAdriatic pipeline, which beat out competition from Nabucco West project, being developed by Norwegian, Swiss and German companies and hence favoured by the EU, is expected to cross the territory of Greece and Albania and reach across the Adriatic Sea to Italy, carrying 10 billion cubic meters per year to European markets. Though originally the project had the full backing of the European Commission, due to the resurrection of the Russian-sponsored South Stream project, it did not look as attractive. The possibility of 47 bcm of Russian gas arriving through Turkish Stream to the Greek border looked much more profitable than the 10 bcm of Azeri gas to be pumped through the TAP pipeline.

However, Greece’s European creditors are very negative disposed against the deal. Thus, as has been the case with South Stream pipeline, which was envisioned initially as running through another EU-country Bulgaria, such a deal cannot circumvent EU antitrust legislation. Furthermore, that pipeline, which is meant to carry Russian gas to Europe through Turkey and Greece, would face a variety of political and economic obstacles. Except for the deep routed Greek-Turkish confrontation over Aegean and Cyprus, European countries appear reluctant to join the project as consumers trying to reduce their reliance on Russia. In this event, Greece and Turkey would not be able to use on their own all the gas that Gazprom would eventually plan to send through the pipeline. From a purely economic standpoint, the best scenario for Greece and maybe for Turkey would be an eventual compromise between the European Commission and Russia’s Gazprom, allowing a mixture of Azeri, maybe a bit of Iranian, and Russian gas into the transportation infrastructure. However, politically motivated objections by the EU and the US make this option unsustainable, whereas some of political implications connected to the deal have already become obvious.

According to Greek media reports in July 2015 that were denied by Kremlin but cited by 17 lawmakers from the opposition New Democracy party at the time in officially asking the Greek Government in parliament for verification, Greek Prime Minister Alexis Tsipras asked Putin without success for a 10 billion USD loan so that Greece could reintroduce its national currency and reject the conditions set by EU institutions for a new bailout package for its ailing economy. The idea behind the request seems to have been the 5 billion USD advance on the construction of the Greek branch of the Turkish Stream gas pipeline.

According to rumors, Alexis Tsipras’ first call outside Greece after the July 5 bailout referendum was to Russian President Vladimir Putin to ask him for just 1 billion euros in the form of short-term bonds or investments in future construction projects just to keep the liquidity in Greek banks afloat. Again he received a refusal from Putin. On the contrary, Putin hasn’t even relaxed the counter-sanctions on Greek vegetables and fish during the six months of SYRIZA’s administration.

If estimates are true that Russia despite the low oil price still has more than $360 billion USD in foreign reserves, it easily could provide the $10 billion in financial aid to Greece. The question is why it refused to repeat what it had done with Cyprus under a similar case in 2013 despite the very close Cypriot-Russian economic and political ties.

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It is noteworthy, that the communist government in Nicosia, with strong ties to Russia since the time of Cold War, decided to ask Moscow for a 5 billion euro loan in order to avoid a similarly harsh rescue package designed by the EU and the IMF, faced another categorical denial from the Kremlin. Consequently, the government was compelled to accept an unprecedented haircut on deposits in Cypriot banks, resulting in a huge loss of money for the overwhelming majority of Cypriot citizens and of wealthy Russians and Russian multinational corporations who held uninsured deposits above 100,000 euro.

Apparently Cypriot leaders were so concerned with keeping their wealthy offshore Russian customers happy that they pushed their own citizens to pay even more than some of the lenders were demanding. The huge amounts of Russian money deposited at that time in Cypriot banks seemed to be a thorn in the Europeans’ side, although until then the Cypriot bank system, according to the 2011 Report by the Committee of experts on the evaluation of anti-money laundering measures and the financing of terrorism (MONEYVAL), was perceived to meet, with only minor deficiencies, all of the standards concerning anti-money laundering and the criminalisation of the financing of terrorism.

In intepretting Russia’s course towards the countries of the Eastern Mediterranean, despite some opposite appearances, it seems that all of the countries in the region have been in general of secondary importance for Moscow. Only occasionally have some of them, such as Cyprus in the post-Cold War, acquired a high priority in Russian’s political and economic international relations. These countries play from time to time a important complementary part in Russian aspirations in the region, such as a counterweight to the US or the European Union, but in itself do not possess such value to urge Russia to put at stake its fundamental interests in the West.

Accordingly, the view that a common Christian Orthodox Solidarity exists to motivate Russians, Greeks and Cypriots into common action, or discouraging Turkish elites from joining, appears also very naive. It seems rather that Moscow prefers not to give money to anybody unless it can get something tangible in return—like a large share in Cyprus energy reserves which but have not been exploited yet or in the case of Greece a removal of EU sanctions, something Athens is incapable of doing.

Some observers argued that the situation would be different if Greece had left the Eurozone with all of its debts written off or if Russian economy were stronger. Then, Russian loans could have been used to strengthen a new currency, making it cheaper and more profitable for Russia to acquire and develop Greek assets.

If this appraisal is not valid, then Kremlin’s foreign policy makers and strategists should seriously reconsider the validity of their analyses, because Russia, by refusing to shore up Cyprus and Greece during their recent financial and fiscal crises, has lost a unique opportunity to take on a leading role and seriously threaten for first time Western hegemony in the region.

Both Greece and Cyprus have been undergoing a profound identity crisis, as their previous, dominant political system, economy and reigning political culture have all been discredited, leaving a vast void. There is a strong belief especially among the Greeks that their country is not being accorded the recognition it deserves as a sovereign country. Furthermore, the kind of confidence that normally exists among EU-Partners has been shaken and it will take years of close engagement between Greece and the other EU-members to re-establish it. After decades, the debate on Greece’s orientation towards the West, in whose structures Greece has been firmly rooted since the end of Second World War, has remerged. However, this time questions have not only been raised by the Communist party or some marginal political groups arguing for a reorientation toward the East and a confluence with Russian policy, but by various political forces in the right and left political spectrum and broad parts of Greek society. What the Russians did not pay sufficient attention to was the fact that this debate emerged from the result of occasional discontent towards the European political and economic alliance but because of a total rejection of Greece’s position in the European world.

There is also another interpretation for the Kremlin’s behaviour that accords with the history of Moscow’s intervention in the region. Russia acted in this manner only to gain political benefits from the Greek crisis by trying to exploit rifts and fissures in European unity. Moscow let the Europeans look weak and bad so as to create a Russia friendly country within the EU to be used as a lobbying and communication channel, as was the case during the Cold War.