To Russia With Love: Greece May Still Have a Plan B

To Russia With Love: Greece May Still Have a Plan B

Why you should care

Desperate times raise the possibility of desperate measures.

It’s the scenario that’s taking the world into uncharted territory — the prospect that an unstable Greece might abandon the euro. This Sunday, in fact, all 28 European Union members will hold an emergency summit that could, barring last-minute agreements, end up kicking Greece out of Europe’s monetary union.

But guess who’s paying close attention and potentially even rubbing his hands in Slavic glee. Hint: He runs a country a few thousand miles to the northeast and likes to be photographed with his shirt off. We’re talking, of course, about Russian President Vladimir Putin, who could capitalize on the crisis to draw Greece into Russia’s orbit.

Quick catch-up: Last weekend, Greek voters rejected the terms of a proposed European bailout, which now might cause Greece to miss a huge bond payment to the European Central Bank on July 20, potentially triggering a full-blown banking crisis. Businesses are closing, unemployment is more than 25 percent and over the past six years, the economy has shrunk back to 2004 levels — a disaster equivalent to what the U.S. experienced during the Great Depression.

The growing detachment of Greece from Europe could pave the way for a broader strategic alliance with Russia.

The Greek crisis, which leaves no one involved covered in glory, in some ways resembles the way Europe sleepwalked into World War I — and it could reorder the continent in a similar way, potentially to Russia’s advantage. “We may be witnessing the unraveling of the political assumptions on which European integration has rested,” says Holger Nehring, a professor of contemporary European history at the University of Stirling. At the same time, many younger Greeks are now heavily invested — economically and personally — in the world beyond their borders, says George Serafeim, a professor of business administration at Harvard Business School. Which is where Russia and its often overlooked ties to Greece come in.

The growing detachment of Greece from Europe, and young Greeks from their own country, could pave the way for a broader strategic alliance with Russia. Putin telephoned Greek Prime Minister Alexis Tsipras the day after the “No” vote to express his support, and Tsipras has visited Moscow twice in the past two months — once to sign a preliminary deal for a pipeline that would carry Russian natural gas to Europe through Greece and Turkey, allowing Russia to bypass Ukraine.

Greece

Euro coins lay on a 1000 drachma note, Greece’s once (and future?) currency.

Source Christopher Furlong/Getty

Beyond the historical and religious ties between the two Christian Orthodox countries, there is some evidence that the Greek people are warming to Russia at the same time they are cooling toward Europe. Even before the events of recent months, just 23 percent of Greeks had a positive view of the EU in a Eurobarometer survey published last autumn, while in a 2013 Pew Research Center study, 63 percent of Greeks expressed a favorable view of Russia.

Tsipras and his leftist Syriza party, elected as part of a new ruling coalition in January, also have a history with Moscow, and Tsipras has allowed his ministers to float the Russian possibility during negotiations with the EU. “What we want is a deal,” Greek Defense Minister Panos Kammenos told a Greek television show back in February. “But if there is no deal … then we have the obligation to go to plan B,” which, among other things, “could be Russia.”

Of course, Greek leaders might just be bluffing for negotiating leverage. “The Russian government cannot afford to rescue the Greek economy,” says Manos Karagiannis, a Greece-born specialist on Russian foreign policy at King’s College London. Russia faces any number of its own problems, from the quagmire of its quasi-intervention in Ukraine to its slumping oil-dependent economy. Neither the EU nor NATO is likely to let Greece flirt with Moscow for long. “I’d bet Putin would love Greece to leave NATO and find Russia a port smack bang in the middle of the Mediterranean,” says Remy Davison, a political economist at Monash University. “But that ain’t gonna happen. Ever.”

Still, Russia certainly has an interest in a prolonged Greek economic crisis that weakens Europe and hangs a For Sale sign on Greece, which an all-but-certain currency devaluation following a “Grexit” would do. In that instance, Russian companies and individuals (along with those from China, Germany and elsewhere) will almost certainly snap up Greek infrastructure such as airports, ports and roadways, says Marc Chandler, the global head of currency strategy at Brown Brothers Harriman and an adjunct professor at New York University’s Center for Global Affairs. Marianna Fotaki, a professor of business ethics at Warwick Business School, comes from a small village in Greece where she says she has seen Russian buyers snatching up vacation homes and other properties in recent years.

Konstantinos Karamanlis, the former Greek prime minister and president who helped secure his nation’s place in Europe, proclaimed in 1976 that “Greece belongs to the West.” Now the big question is whether Putin is in a position to reverse that dictum and declare that “Greece belongs to the East.”

Nathan Siegel contributed reporting.

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