Greek Prime Minister Alexis Tsipras risked straining relations with his Eurozone partners even further yesterday after a meeting with Russian President Vladimir Putin to boost ties between the two countries.
Dismissing European officials who questioned his intentions for the trip, Tsipras said: “Greece is a sovereign state – it has its undisputed right to a multifaceted foreign policy.”
With the pair vowing to “restart relations” between their countries, the meeting was seen by some as an attempt from Greece to get a bargaining chip in negotiations with Europe over its bailout.
“On substance, there is little Tsipras and Putin can offer one another,” Nina Schick, a policy analyst at think tank Open Europe, told City A.M.
“Symbolically, the summit sends a message to the EU, and is about both Putin and Tsipras posturing as though they have other options. Greece’s aim is to create something it hopes to use as a bargaining chip in its ongoing negotiations with its creditors.”
Another possibility was that Tsipras might ask for a loan to help with Greece’s cash crisis – but this was dismissed by Putin. Russia is also dealing with its own economic problems due to falling oil prices and economic sanctions.
“Even if Russia wanted to bail out Greece, it may not have enough funds to support the Greek economy for a prolonged period. However, Russia could afford to provide short-term loans in order to keep Greece afloat while the country negotiates a more permanent solution with the Eurozone,” said analyst Blanka Kolenikova from consultants IHS.
“This would be similar to an October 2011 deal, when Russia provided a €2.5bn [£1.8bn] loan to Cyprus.”
Tsipras was outspoken in his disapproval of EU sanctions on Russia. The policy hit Greece hard as Russia implemented its own sanctions against the EU in response. The countries are major trading partners, but commerce between the two has collapsed by 40 per cent over the past year due to the sanctions. Greece’s negotiations with the Eurozone over attaining more bailout cash are ongoing, with another meeting of deputy finance officials due today.