[10]
Whilst Greek minister of finance Yanis Varoufakis was negotiating the new bailout package in Luxemburg, the prime minister of the Greek government, Alexis Tsipras, went on a city trip to Russia. And this obviously wasn’t a coincidence.
Even though both the Russians and the Greeks initially said the visit had nothing to do with the crisis in Greece,right before and after the visit, some Russian government officials acknowledged that if Greece would make an official request for help, Russia would ‘try to help the country out’ [11] . It’s also not a coincidence Russia and Greece already signed the famous ‘pipeline agreement’ [12]whereby Russia and Greece agreed to build a pipeline to export Russian gas to Europe through Turkey (which would bypass the pipelines through Ukraine).
This agreement is important for two reasons. First of all, it rattles the western European countries to see Greece and Russia being best friends again, despite the economic embargo which is still in force. But secondly, and this seems to be overlooked by the Western media; Russia doesn’t seem to hold a grudge against Western Europe (or at least it wants the relationship to normalize). As the European countries are still keeping the trade embargo effective, Russia could easily have shut down the deliveries of gas to Europe to make a statement as well.
[10]
There’s also a third potential reason for this gas pipeline deal. By avoiding the gas to be routed through Ukraine, Putin could be trying to divert the attention away from Ukraine, as the country was extremely important as transit country. It also means that Russia preferably wouldn’t want to throw the Greeks a lifeline as it could jeopardize all future relationships and potential reconciliation with the Western countries.
So even though Russia has the possibility to bail Greece out (as it could easily make a few billion euro’s available despite its own account deficit) just to poke some fingers in the eyes of the western countries, it probably won’t do so, as whatever your opinion is about Vladimir Putin, he’s an excellent strategist and most definitely isn’t interested in another cold war.
So, no, Greece shouldn’t count on Russia at all, and its only hope is to make some decent proposals on the special Euro summit on Monday. It will be the meeting of the last chance, and the Greeks better have some more details ready on their previously submitted ‘proposals’. At the most recent Euro-group meeting Varoufakis did have some new plans, but he failed to mention a single number of expected revenue, and that really ticked the other negotiators off.
Another solution for Greece might be to sell a part of its gold reserves, but that scenario is unlikely as it would buy the country just a few more weeks as it doesn’t have enough gold to make the large July payment.
So the adage ‘There Is No Alternative’ has never been more correct than in this case. Greece shouldn’t count on Russia and won’t be able to sell its gold to avert a default. So it will either re-gain the credibility of the Eurozone in the meeting of last resort on Monday, or it will leave the Eurozone. There won’t be any ‘in-between’ solution possible.
>>> PROTECT Your SAVINGS? Check Out Our Latest Gold Report! [14]
Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report [15] and the Commodity Report [16].
Follow us on Facebook @SecularInvestor [17] [NEW] and Twitter @SecularInvest [18]
