Russia Won't Rule Out Loan, But Greece Unlikely to Break Free of EU Control

Russian Finance Minister Anton Siluanov has commented that Russia would consider a hypothetical Greek request for a loan agreement, but the new Syriza government is expected to face unprecedented pressure if it seeks to pursue truly independent foreign and economic policy.

MOSCOW, January 31 (Sputnik) — In an interview published Friday for US business news channel CNBC, Russian Finance Minister Anton Siluanov noted that he would not rule out a loan agreement to Greece should the country appeal to Russia for assistance.

"Well, we can imagine any situation, so if such [a] petition is submitted to the Russian government, we will definitely consider it, but we will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say," Siluanov told CNBC in Moscow on Thursday.

The new Greek government headed by the anti-austerity Syriza Party is facing a tough period of negotiations next month as it sets out to negotiate on its €323 billion debt, three-quarters of which is owed to the countries of the European Union, the European Central Bank and the International Monetary Fund. The country needs to reach an agreement by the end of February in order to be eligible to receive the next tranche of bailout funding. Syriza had run on a platform of renegotiating its debt with European lenders.

Siluanov praised Greece's efforts to prevent the introduction of new sanctions against Russia by the EU, noting that it is "a pragmatic approach." The minister explained that when it comes to sanctions, "there are politicians and there are businessmen. And the pragmatic approach is that this always affects economic growth, employment, social stability in our countries. We have always advocated for the lifting of sanctions. And some of the countries who felt the negative effects of the sanctions being imposed… who felt that their sales in Russia or their exports to Russia have been reduced significantly." Siluanov expressed that "I do understand why they are raising this question."

Deputy Foreign Minister Nikolaos Chountis told Greek media earlier this week that sanctions against Russia are counterproductive, and painful for the Greek economy, which has a significant dependence on Russia for food exports, tourism, and energy imports. "We do not agree with the spirit of the sanctions against Russia that bring negative consequences not only for agriculture but for the country's economy in general," Chountis noted.

Foreign Minister Nikos Kotzias weighed in as well earlier this week in defense of Greece's sovereignty, and his country's voice in the EU, noting that his country takes issue with "EU policy [being] based on the interests of the countries, which historically have too emotional relations with Russia." The minister noted that "Greece does not accept the situation when the EU policy towards Russia is decided outside the EU institutions." The Greek Foreign Ministry had objected to the EU Foreign Affairs Council's communique intending to impose a new round of sanctions against Moscow over the deteriorating situation in Ukraine, his country believed to have played a key role in preventing the approval of the new measures.

#Greece says #EU should change policy towards #Russia http://t.co/QW6M5V3G89 pic.twitter.com/HLR7xQCBH5

— Sputnik (@SputnikInt) 29 января 2015

Greece Will Find It Difficult to Pursue Truly Independent Foreign, Economic Policy

Despite Greece's attempts at improving its relations with Russia, and the Russian government's signals of willingness to accommodate it, experts believe that the country has little chance of escaping Brussels' political and economic dominion over the country. University of Athens Associate Professor Aristides Hatzis told Sputnik late last week that the "Greek economy and especially Greek banks are in such a bad shape that a schism with European Union will lead to economic disaster." Hatzis noted that in practice, "this means that if the new government decides to reach a compromise with our partners for debt relief, it will be extremely difficult to pursue a foreign policy which is not in alignment with our partners."

However, not all hope is lost for Greece, given that Germany, the EU's main geopolitical and economic powerhouse, is between a rock and a hard place when it comes to debt restructuring. While Germany cannot tolerate Alexis Tsipras' demands for a review of repayment conditions, lest other countries make similar demands, Tsipras seems to understand that Greece's exit from the Eurozone, which serves the interests of the German economy, might be even more catastrophic, resulting in a domino effect of other countries threatening to leave the currency zone.

Political scientist and former Reagan Administration advisor Paul Craig Roberts noted in a piece late last week that Greece has already faced punishment for even thinking of moving toward an independently-minded foreign and economic policy, including a tilt toward Russia, noting that Western investors and financial institutions have already made a preemptive assault on Greek bond and stock prices. This phenomenon was only strengthened in the middle of the week, when the US-based rating agency Standard & Poor's announced that it has placed the country on its CreditWatch program. The agency warned that "the CreditWatch placement reflects our view that some of the economic and budgetary policies advocated by the newly elected Greek government, led by the left-wing Syriza party, are incompatible with the policy framework agreed between the previous government and official creditors." It added ominously that "if the new Greek government fails to agree with official creditors on further financial support, this would further weaken Greece's creditworthiness."

Roberts believes that no matter what the Syriza government does, an "accommodation is unlikely to occur, because a reasonable accommodation is not the desire of Washington, the EU, or of Greece's creditors."