Russian Pivot: Greece Will "Probably" Join BRICS Bank, Official Says

Tyler Durden's picture

Greece has very little in the way of bargaining power with European creditors.

Outside of gimmicks like tapping its SDR reserves, Athens has no cash to make payments to the IMF in June and, perhaps more importantly, there's very little in the way of wiggle room when one looks at revenues versus spending (see below), meaning Greece will also struggle to pay public sector employees which, in combination with Greeks’ consternation about the safety of their deposits, could contribute to social unrest and put unwelcome political pressure on PM Alexis Tsipras and his Syriza party that swept to power just five months ago on a defiant (and apparently naive) anti-austerity platform. 

The troika (and Germany) knows this of course and they are also acutely aware that Spain's Podemos and Portugal's Socialists are watching the Greek drama closely for the slightest indication of concessions from the IMF or from the EU. In other words, the standoff is now just as much about politics as it is about economics, and the 'institutions' do not want any Syriza sympathizers to be able to say that Greece made anyone blink by threatening an exit from the currency bloc. 

What all of the above means is that for better or worse, Greece has essentially no leverage because for many European officials, trading austerity concessions for the right to maintain the idea of euro indissolubility is no longer a desirable outcome as it could embolden anti-austerity governments in larger, more influential countries. 

All of that said, Greece still has one card to play: the so-called 'Russian pivot'. Over the course of negotiations between Syriza and the troika Moscow has, at various times, sought to take advantage of the hostilities between Athens and Brussels by making a series of overtures including the possibility of a €5 billion advance on Greece’s portion of the Turkish Stream natural gas pipeline and an invitation for the country to join the BRICS bank, a possibility Goldman’s Jim O’Neill wrote off as a politically-motivated “joke.”

But Vladimir Putin isn’t fond of joking (unless he’s participating in his yearly town hall meeting with the Russian people) and sure enough, less than two months ahead of this year’s BRICS Summit in Ulfa, it appears Greece may accept Moscow’s invite. 

Enikos has more:

Greece is preparing and will probably submit a request to participate in the new development bank for BRICS countries and has secured Russia’s support on the issue, Productive Reconstruction, Environment and Energy Minister Panagiotis Lafazanis told ANA-MPA news agency on Friday evening.


“During my meeting with Russian Deputy Finance Minister Sergey Storchak, we secured the decisive Russian support to Greece’s request for participation in the new development bank of BRICS countries. The relevant request for Greece’s participation…will be symbolic and will be paid in installments, while right after operations begin, it will be able to accept financial support,” the minister said.


Lafazanis added that technical details were also discussed on how to submit the request so that it will be accepted after discussions within the Greek government conclude.


He also noted that he also discussed the credit facility that will be provided by Russian banks to the Greek company which will undertake the construction of the new gas pipeline which will cross Greece.


“Repayment of the Russian loan will be achieved by the profits made through the operation of the pipeline and this facility is not related to loans or economic assistance between states,” he said.

As mentioned above, this comes as Russia, Brazil, India, China, and South Africa are set to officially launch the BRICS bank and a related reserve pool when the group of emerging powers convenes on July 8-9 in Russia. It also comes as Moscow looks set to put plans for a Eurasian currency bloc into motion and as the Central Bank of Russia explores the possibility of establishing a BRICS-associated alternative to SWIFT.

Additionally, China's recent $50 billion commitment to Brazil underscores the degree to which BRICS nations are expanding their economic and political cooperation in the face of declining Western hegemony. The BRICS bank speaks to the idea that the world's most influential emerging markets now feel it necessary to support each other in the face of what they view as a half-hearted attempt on the part of the world's existing multilateral institutions to serve EM interests or even to give them representation that's comparable to their place in the world economy. Here's what we said on Friday:

Much like the China-led AIIB, the BRICS bank is in many ways a response to the failure of US-dominated multilateral institutions to meet the needs of modernity and offer representation that’s commensurate with the economic clout of its members.

Why would Russia want Greece to join the bank? The motivation is clearly geopolitical consdering that Greece is broke, and what's interesting about the statement from Lafazanis is that it appears to suggest that Greece's paid in capital would come in installments while Athens would immediately be eligible for a loan from the bank. 

In short, Putin would like nothing better than to establish a symbolic relationship with the first country to break from the supposedly indissoluble currency bloc, especially given the situation in Ukraine. Meanwhile, Greece is out of leverage, especially now that recent regional and municipal elections in Spain have proven to Athens' EU creditors that the austerity (or, 'fauxterity' as we're fond of calling it) revolt is very real. We'll see what, if any, impact this latest Russian pivot trial balloon has on Greek debt deal negotiations.

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Oh regional Indian's picture

Now look at this. 

Putin can convince the BRICS that to have Greece is an asset.

The EU thinks it is a basket case burden,

Cui bono? 

What is the game here?

My game...


Wile-E-Coyote's picture

Putin backs Greece to cut the legs from under the EU, what a master stroke. The EU thought they had Greece cornered, oh this is going to be epic.

elegance's picture

Au contraire. EU finally (better late than never) cutting Greece loose. Hello Mr. Putin please accept this gift from us in the form of a Greek horse... 

Urban Redneck's picture

The Trojan Horse would be sent to Brussels, not withdrawing from the EU or NATO would implicit conditions of financial assistance, withdrawal from the ECB/EMU... not so much.

researchfix's picture

It´s a bargain.

Let 40 Mio. WUkies be fed by EU, instead feed 10 Mio. Greeks.

And the Greeks have these lovely Mediterrenian islands. The WUkies are island-less as of last year.

As I said before, there will be no vacuum of money in Greece the day after default.

Germany to BRIGGCS next, only chance for Merkel to get her crimes forgiven.

Bob's picture

Are you this guitarist, ORI?

tarabel's picture



Interesting fusion that comes across as an experiment in grafting India and Sergio Leone soundtracks together.

The King's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

Barnaby's picture

Mr Putin, with most humble respect: please form a new thing and leave 'Medican' cosa nostra in the dustola.

Signed a true American

DutchBoy2015's picture
DutchBoy2015 (not verified) May 30, 2015 1:37 PM

Great place for some naval bases.   Go Putin, fuck the Useless Snakes 


Veriton's picture

We knew this one was coming:

tarabel's picture



I totally support the desire of the BRICS to become Greece's new patron/sugar daddy.

But they need to invite Sarah Palin to the one-year anniversary celebration.

Arionov's picture

I thing she don't khow where is Greece?

tarabel's picture



How's that pivot to the east thingy working out for ya?

dsty's picture

the old Sarah Palin is stupid schtick

so we bought the lie and elected Obozo

so who is stupid now?

tarabel's picture



I didn't call her stupid. I called the Russians stupid for thinking that the whole "Greek pivot to the east thingy" would work out for them.

I mean, come on. Here is the actual gist of the article above:

Greece: We want to join your development bank.

Russia et al: Do you have the capital to buy in to the project?

Greece: No, but how about if we make payments on it and, meanwhile, you can loan us money from the bank?

No one but a complete imbecile could possibly believe that this is to the benefit of Russia, China, or anyone except the current crop of people who have to pay to keep the present Greek welfare state alive.

But boy do the ZH slavophiliacs resent having it pointed out to them. They think it's actually some sort of ultra-smooth move to fuck the West.

"Hey, we're gonna steal your deadbeat relative out of your basement. That'll show you who's smart and who's not."

Yep, sure will.

libraryrat's picture

Silly.....she can SEE Greece from her house in Alaska! 

jimfcarroll's picture

Tell me, what is Greece leaving the EMU and joining the BRICS more like:

1) When the Eagles traded Terrell Owens to the Cowboys.
2) When KMart merged with Sears.

Terminus C's picture

I don't know who the thug you mentioned in number one is, but I am assuming he is a "valuable" asset to a National Thugball League team.  However, because of what we know about the finacial situation in ALL of the economies of the world... My bet is #2.  But it should be more like Target sold its KMart affiliate to Sears.

Kabuki bitchez!

tarabel's picture



Actually K-Mart took over Sears-- proof positive that the world was going to turn upside down in short order.

yogibear's picture

Russia needs to have Greece default on all it's debts and obligations and join the BRICS.

Get Spain and Italy to join and you really screw the IMF and the US.

Veriton's picture

Don't worry, this is exactly what the globalists have planned, so it will happen as you say. This whole contrived East verus West drama is all about rejuvenating the UN/IMF brand. Once the "hero" BRICS force UN/IMF governance reform and once a Chinaman is Managing Director of the IMF, the public are expected to believe that things have changed and will embrace the New World Order. It's a clever tactic, no?


Terminus C's picture

We will know it is all good because neither the Chinese nor the Russians are prone to corruption like the leaders of the "west" are...


knukles's picture

Hah ha ha ha ha
Sometimes you'd think that some times some people around here think that to be the truth
Lots and lots of trolls or idiot savants

DeusHedge's picture

white people =) or are you putins personal vassal?

Joebloinvestor's picture

Move to a new tit when you empty one.

vote_libertarian_party's picture

So they play is Russia will lend $10B as long as Greece defaults on the $360B it owes the west?


(and Russia will ask for a favor at a later time)

elegance's picture

Fuck off Greece. Go suck on Putin's tit now you parasites and bleed him dry. Can't happen soon enough.

TungstenBars's picture

So you're upset that the East is winning and the West (read: USSA Criminal Corp) is losing? I'll play the worlds saddest song on the world's smallest violin for you. 

elegance's picture

Bankrupt socialist utopia of Greece. Thats the first prize for the "winning" East? More like a Trojan horse gift to Russia.

HenryHall's picture

You are seriously calling Goldman Sachs socialist??

It was Goldman Sachs that got Greece bankrupt, but there has recently be a major change in Greek government. Catch up willya.

Freddie's picture

+1  Goldman are scum.  Ted Cruz wife works for them but GS controls Congress.

I wonder if any Russians or possible Greeks posting here know how strong the Orthodox Church might play a role here.

Nothing will imrpove if the Greeks stay in the EU.  At least they can probably increase trade with Russia, china and the east by joining the BRICs. 

The Greek elites, govt union workers, govt pensioners, military and cops will not want to lose that Euros check though.  The rest of the country can starve as long as the elites get theirs.

tarabel's picture



Why is it so hard for you to see that we agree wholeheartedly with you.

You want Russia to take over Greece.

We want Russia to take over Greece.


Aha, but you suspect it's a capitalist trick, don't you?

Even though it is your own idea.

basho's picture

nothing elegant about this stooge. lol

Bobbo's picture

Does this mean a new Drachma backed by Chinese gold?  Goodness me, what a surprise would that be.

elegance's picture

Yeah right. They just can't wait to underwrite Tsipras' socialist utopia...

HenryHall's picture

>>> Does this mean a new Drachma backed by Chinese gold? 



It means the Drachma will be freely exchangable for Yuan (or Rubles) but only as long a Greece pleases the BRICS. Greece steps out of line and exchangability becomes history.

tarabel's picture



A surprise indeed.

Mostly because the Chinese are evil and greedy, not stupid.

basho's picture

r u always this stupid or r your hemorrhoids acting up again?

Marco's picture

If Putin wants to bail them out he can be my guest ... it will do him no good at all (and no, a naval base on the Meditarrean Sea wouldn't matter jack shit either).

Terminus C's picture

Sure it would... the base that is.  The sheep in Russia and America would have much bleating and much distraction would be accomplished.

Look over there!  That is the cause of your suffering!  "They" are coming to take the rest of your miserable life's accomplishments!  HATE "them"!


basho's picture

marco get a brain and then use it. read instructions on the box.

libraryrat's picture

Russia already has a naval base in the Med.   Cyprus. 


What Russia really needs is a naval base in North America.