Putin: Agreed pipeline project may help Greece pay its debt

Russian president says proposed gas pipeline project might help Athens to pay its debt as Greece approaches to bankruptcy following failure of bailout negotiations with Western lenders

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

President Vladimir Putin of Russia said on Friday that they could help highly-indebted Greece to pay its loan money back to the international lenders, but the Kremlin office clarified that direct Russian financial aid to Athens was out of concern.

After he met with the Greek Prime Minister Alexis Tsipras at the St. Petersburg International Economic Forum on Friday, Putin said Russia’s new blueprint pipeline project in the southern gas corridor would be very lucrative bonanza for Greece which failed to agree with its Western creditors last week.

Putin told reporters that the European Union was not helpful for Athens which has been striving to reach a final agreement on its debts with the Western creditors, including the International Monetary Fund (IMF) and the European Central Bank (ECB).

"If EU wants Greece to pay its debts it should be interested in growing the Greek economy ... helping it pay its debts," he said. "The EU should be applauding us. What's wrong with creating jobs in Greece?" Putin asked.

"When Mr Tsipras spoke, he said the problem of Greece was not a Greek problem but a European one. Well, that's right. If you owe someone a lot, then it is already not your problem but the problem of the one you owe- and that's an absolutely correct approach," the Russian president added.

Russia signed a preliminary agreement with Greece on Friday considering the new gas pipeline that was replaced with the previous South Stream Project and became a “Turkish Stream” when Putin and his Turkish counterpart Recep Tayyip Erdogan agreed to build last December.

The proposed “Turkish Stream” gas pipeline will carry Russian gas supplies through Turkey’s exclusive economic zones in the Black sea  and then expected to traverse Greece en route Europe.

Russia has promised hundreds of millions of dollars in transit payments annually if the pipeline could be materialised around 2019.

Russian Energy Minister Alexander Novak said on Friday Russia and Greece would be equal partners in the project, adding that the pipeline to Greece will be financed by Moscow whereas Athens will return the money once it become more financially stable.

Athens has been negotiating with the  creditors, the IMF and the ECB, over the past four months about the release of some 7.2 billion euros in funds.

The country is heavily indebted to the EU and the IMF, almost 240 billion Euros, since the eurozone economic crisis seriously hit the country’s economy from 2009 to the present.

Greece’s left-wing Syriza Government has so far not agreed on a number of issues, such as debt restructuring, a lower target for the primary surplus to take in more than it spends apart from debt interest payments, and a pledge to make no further cuts to pensions or wages.

The parties left the negotiating table last weekend, but the EU and the money lenders persist to strike a deal until the EU leaders’ summit at the end of this month.

The failure of the negotiations would lead Greece to default, one of the most likely scenarios which might also mark a historic blow to the EU's most ambitious project, the common currency usage, eurozone.

Tsipras’ recent moves towards Moscow have been interpreted as Athens endeavours to get Russian financial help in the West, but the Kremlin spokesperson Dmitry Peskov said there was no discussion of financial aid for Athens at the Friday meeting between the leaders.

The Greek PM said after the meeting his country was seeking to build a "bridge of cooperation" with "traditional friends like Russia" and others.

"As you all know, we are now in the middle of a great storm," Tsipras said. "But we are a seafaring nation that knows how to navigate through storms and is not afraid of heading to new seas and reaching new harbours," he added.

"We are starting a new era in Greek-Russian relations and we consider you who live here to be playing a very important part in this effort," Tsipras emphasised when he mentions the importance of Russian-Greek relations.

Meanwhile Russia's Deputy Prime Minister Arkady Dvorkovich said Russia might consider to give loan money to Greece if Athens appeals to Moscow for a financial help.

"The most important things for us are investment projects and trade with Greece. If financial support is needed, we will consider this question," Dvorkovich told Russia Today in an interview on Friday.

Russia’s Minister of Economic Development Alexei Ulyukayev also said Russia was ready to support Greek economy through investment and profitable projects like the Turkish Stream.


TRTWorld and agencies