Potential Russian Involvement in the Greek Crisis: The Challenge Posed to the Euro-Atlantic Architecture

Moscow-initiated financial support for Athens could spell trouble for economic and political stability in Europe.

By Davis Florick
Contributing Writer
10 August 2015

The Greek debt crisis is increasingly becoming a substantial liability for the Euro-Atlantic, geopolitical architecture. Considering the range of austerity measures required in the latest bailout package and the intensity of the political infighting that has taken place in Greece as a result, the path toward solvency will be littered with hurdles. The temptation to take an easy route toward debt relief will be ever-present for many years. Into the void, Russia could play a substantial role. Moscow, still smarting over the Ukraine’s association agreement with the European Union (EU), could transform this crisis. Reductions in defense spending, new energy deals in East Asia, and other commercial agreements, specifically armament sales, could produce a substantial revenue stream for Moscow. With this considerable liquidity, the Kremlin is in a position to offer Athens immediate debt relief in exchange for access to military installations, civil arteries, and economic assets. Complicating matters inexorably is the fact that with Greece still owing money to the EU, it would be difficult for Europeans to walk away. If Athens chooses to leverage potential Russian assistance to the maximum extent possible it could spell serious trouble for the EU and North Atlantic Treaty Organization (NATO).

Within this fractious political climate there is an opportunity for Russia. For over a decade, the Kremlin has looked for ways to roll back what it views as Euro-Atlantic encroachment along its periphery. Most recently, as EU-Ukrainian negotiations on an association agreement stalled in late 2013, Moscow advocated Kiev’s accession to the Russian-sponsored Eurasian Economic Union (EEU). President Viktor Yanukovych struck an alternative deal with Moscow, whereby Ukraine would join the EEU in exchange for a $15 billion bailout agreement. This occurrence is significant given that a substantial public outcry was the only thing that stopped the Russian proposal from being finalized. With such animosity toward the EU amongst the Greek people, the prospects for a similar show of disapproval toward the EEU are unlikely in Athens. Leaders from both Greece and Russia only fanned the flames of their peoples’ mutual antagonisms with European leaders during their meetings at the St. Petersburg International Economic Forum. Enticing Greece with a less onerous debt relief offer in exchange for Russian access to military installations and vital economic positions could prove tempting for any Greek government facing domestic and EU pressure.

Undoubtedly, this expenditure would prove quite costly for the Kremlin given Western sanctions and failing oil prices. The allure of drawing a state away from the EU, however, could prove too attractive to forego – even if it means difficult budget cut decisions ahead for President Vladimir Putin. European creditors would be faced with the prospect of evaporating leverage despite an expectation to respond. With the EU’s limited options, Russia would have demonstrated to other struggling states there is an alternative to domineering austerity measures. More importantly, the Putin regime would have compromised the authority and legitimacy of the EU and NATO while simultaneously raising its own prestige and standing.

From a Greek standpoint, particularly if the austerity measures become the death knell for incumbent politicians, turning to Russia for expedited relief could be a viable option. Given the outcome of the recent referendum in Greece – rejecting austerity measures – the government has placed itself in a precarious position by accepting the current relief package. Tragically, the notion of European commonality no longer carries the same weight. Agreeing to an accord with Russia provides the Tsipras Administration, or a future government, with an exit strategy. Athens could argue that the EU shackled the government with overly burdensome terms, particularly in light of the Russian offer. For the executive, this would represent the perfect opportunity to circumvent responsibility for enacting strenuous austerity measures. Conceivably, the government may even bet that the EU’s current commitments make walking away now too daunting of a task for the Europeans. Essentially, policy makers in Brussels may succumb to blackmail if they believe they have more to lose than their Greek counterparts. In the event Greece is evicted from the EU, potential energy agreements and other friendly trade deals could be incorporated either simultaneously or as follow-on proposals to further compensate Greece.

Immediate action is prudent for Russia to maximize its position in the current crisis. In parallel, the government in Athens can place scant hope in its survivability if austerity measures are fully implemented. Kremlin officials could seek an almost immediate audience with Prime Minister Tsipras and offer him a deal in the neighborhood of $100 billion, for example, in exchange for the access it covets. This figure would compare favorably with the latest bailout package – particularly given what, on the surface, would appear to be relatively light terms for Greece.

From a Russian perspective, the opportunity to tarnish the reputation of the EU for the first time in the organization’s history would be tempting indeed. Reducing defense spending by eliminating various nuclear weapon modernization programs for instance; advocating energy deals in East Asia, like the $400 billion agreement with China; and increasing arms sales, potentially to Iran; all create a climate of increased Russian budget flexibility. Organizations such as the EEU and the BRICS New Development Bank could be levied to contribute smaller loans. In point of fact, using the Greek financial crisis could serve as a means for Russia to rally support for various international initiatives it is sponsoring. Taken collectively, pulling from a broad range of options, Moscow could cobble together a package totaling $100 billion, or some commensurate figure based upon Athens’ need. It bears repeating that Russia’s minimal requests in terms of what Greece is expected to provide, perhaps largely focused on strategic access, does not create the same obstacles as the EU’s austerity demands. The pressure would then be placed squarely on the shoulders of senior leaders throughout Europe to respond.

How they would reply to such blatant abandonment on Athens’ part could well serve as precedent in future cases, potentially Hungary and Italy. The major advantage for Russia in this course of action lies in the pressure that Greece’s reposturing will place on NATO. Russian access to Greek military facilities in particular could present a serious challenge to NATO planners. Suddenly, Washington will find itself further entangled in European affairs, forcing a decision on Athens’ membership. Much like in the case of the EU there is no process for removing a state from NATO, making adjudicating Greek actions a protracted and politically damaging prospect for the United States and Europe. In sum, Russia would gain considerable political, economic, and security advantages from a shift in Greek foreign policy.

Davis Florick served as the Command lead for the Arms Control Working Group in the Department of Defense, making him the primary expert on a variety of transparency and confidence-building measure-related activities and author of responses to Congressional inquiries on a variety of issues. He recently completed his master's degree in East-West Studies at Creighton University and is a graduate of the 2015 Nuclear Scholars Initiative at the Center for Strategic and International Studies. His areas of interest include East Asia and former Soviet Union, with past publications in International Affairs Forum, the World Business Institute, and the International Affairs Review. Email: davisflorick@creighton.edu

DISCLAIMER: The views expressed in, and pertaining to, this document are solely those of the author and may not reflect those of the official policy or position of the U.S. Strategic Command, U.S. Department of Defense, U.S. Government, or Creighton University.

"Image" by Albert Häsler, is licensed under CC-BY-2.5.

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