Every Man for Himself: Greco-Russian Relations Heighten Tension with EU

By Grace Shi

Greece became the epicenter of the European debt crisis in October 2009, when it announced that it had been understating its budget deficit for years.

To avoid a greater eurozone catastrophe, the so-called troika—the International Monetary Fund, the European Central Bank and the European Commission—issued several bailouts to Greece that came with harsh terms: austerity measures requiring severe budget cuts and tax increases. This money was meant to buy Greece some time to stabilize its finances and alleviate market fears, however, it mainly went toward paying off Greece’s international loans rather than stimulating the Greek economy.

Now, adding a new complication to an already strained system, hundreds of thousands of Syrian refugees are fleeing to Greece. Nearly 130,000 migrants arrived by sea between January and March 2016 as neighboring countries, including Hungary, Poland, the Czech Republic, Slovakia, and Macedonia, have stopped allowing Syrian refugees to pass through. Greece, struggling to handle the refugee crisis and six years deep in financial deadlock, has seen a drastic reduction in its ability to respond efficiently to these problems, forcing the country to call upon the troika and fellow European Union members for aid. Conflicts have arisen due to Greek citizens’ hatred of the austerity measures and complaints that the troika is not doing enough to help Greece reboot its economy.

As Greece seeks salvation from these financial woes, Russia has stepped in with a tempting gas deal that will allow Russia to build a pipeline through Greece and western Europe. Through this deal, Russia has given Greece the opportunity for foreign investment as well as the chance to become an integral part of the energy industry in Europe, to the point where a “Memorandum of Understanding” was signed on February 24, 2016 by three natural gas companies: Russia’s Gazprom, Italy’s Edison SpA, and Greece’s DEPA SA. The Memorandum introduces the Interconnection Turkey Greece Italy-Poseidon project that will allow for deliveries of Russian natural gas to Greece, and from Greece to Italy, through an undersea pipeline in the Black Sea.

Russia has the world’s largest natural gas reserves, making it the largest oil producer in the non-OPEC countries and the second largest in the world. The ITGI-Poseidon pipeline deal comes after several other Russian gas pipeline plans, including the failed Turkish Stream project (terminated after disputes over Turkey shooting down a Russian jet in Syria) and the controversial Nord Stream 2 pipeline, which bypassed Ukraine and brought oil through Germany to the rest of Europe.

Countries in the EU are in discord over these Russian gas pipeline projects, because while many European countries worry about over-dependence on Russian energy, some—like Greece, Germany, and Italy—clearly stand to benefit from these projects. Moreover, after the 2014 Ukraine Crisis, irate EU countries and the United States imposed trade sanctions on Russia. However, the few EU countries that continue to conduct business with Russia find less incentive to continue these sanctions, as the Russian pipelines hold promise in shaking off the debt crisis. The 2016 deal with Greece has caused increasing alarm and conflict. Western nations fear that Russia and Greece will become too close, especially since the two countries already share cultural and religious ties, and after Greece voted the left-wing Syriza party into power. Strong ties between Syriza and Russia are evident through the extensive correspondence between Syriza leader Alexis Tsipras and Russian president Vladimir Putin. These talks ended with an agreement in 2015 on boosting investment ties between the two countries, and Tsipras has also said that Greece would seek to mend ties between the EU and Russia. Western nations view this growing relationship with unease, worrying that Greece is distancing itself from the rest of the EU and that they will use their relationship with Russia as a bargaining chip to improve its position in further negotiations.

On top of the energy dispute, many European countries are increasingly alarmed by Russian aggression. They fear the implications of Russia’s annexation of Crimea in the Ukraine Crisis. Western states worry that the annexation will allow Russia to easily conduct a possible invasion of Poland or the Baltic states. As reported by the 2015 North Atlantic Treaty Organization (NATO) annual report, “The pace of Russia’s military maneuvers and drills have reached levels unseen since the height of the cold war.” RAND Corporation, with the help of American military experts, conducted a series of war simulations from summer 2014 to spring 2015, and concluded that a Russian offensive against NATO countries in the Baltic—Estonia, Latvia, and Lithuania; all ex-Soviet countries and members of the EU—would overwhelm NATO forces in under three days.

Although NATO is expected to renew talks with Russia to improve military transparency, NATO Secretary General Jens Stoltenberg says it would be difficult to convene this meeting, ironically, with all the pre existing conflict between Russia and the alliance. US General and NATO Commander Philip Breedlove also accused Russia of “weaponizing” the migration of Syrian refugees in order to destabilize Europe, citing the use of barrel bombs against civilians in Syria to “get them on the road” and flee the country.

EU countries are split on how they should deal with the European debt crisis, dependence on Russian energy, sanctions on Russia, and Russian aggression. Greece needs money to deal with Syrian refugees—possibly spurred on by Russian terrorization—and its own debt crisis, and the Russian pipeline project seems like an ideal option. On the other hand, the Baltic states and Poland, countries that would be immediately threatened by a possible Russian invasion, oppose dependence on Russian energy and support increased sanctions against Russia.

The Greek Minister of Economy, Infrastructure, Shipping and Tourism, Giorgos Stathakis, has claimed that “there is a lot of potential” in Russian-Greek relations, and once problems which “exist…between the EU and Greece are overcome, then relations [between Moscow and Athens] will be fully developed.” The head of the Greek Foreign Ministry’s economic relations department, Giorgos Tsipras, said that the Greek government is looking to “have more multidimensional foreign policy and economic foreign policy and Russia is one of the countries” with which Greece is looking to develop a stronger relationship. Tsipras also said that Greece has made “every possible compromise” with the EU on the debt crisis, adding that “Greece is not going to make more sacrifices.”

The Syrian refugee crisis, however, casts a shadow on Greece’s relationship with Russia. At the very least, Russia seems to be taking advantage of Greece’s situation. Russia’s aggressiveness indicates that it may be taking deliberate steps to exacerbate the financial condition in Greece for its own economic and political gains. Deteriorating relations between both countries and the EU mean that a consensus on relief measures will be even more difficult to reach.

Greece, as the focal point of the European debt crisis, faces strong pushback for its fraternizing with Russia. At the same time, the EU faces the challenge of unifying its members under a common financial relief banner, which seems to require mitigating conflicts in foreign policy, at least on the topic of Russian aggression. Since the EU is merely a currency union and lacks punitive enforcement mechanisms, this big picture problem may be well out of its scope. The EU can only continue its interest rate cuts, bond purchasing programs, and bailout plans in hopes of yielding positive results to end the debt crisis. With economic policy and foreign policy clashing, and each EU country looking to fend for itself, it will be harder than ever to create unity and a common cause.