Current Status and Possible Ways to Improve Russian-Greek Relations

The alienation between Russia and Greece seen since 2009 fits well with a broader international trend in global development: under the overall trend towards globalization, it is trade and investments that come to the foreground while whether or not positive dynamics can be sustained in bilateral cooperation depends entirely on whether or not there are sufficient economic grounds. In the case of relations between Russia and Greece prior to 2009, their economic potential was not fully implemented.

Historical Preview

Russian-Greek bilateral relations have deep historical roots. From the 18^th centuryonwards, as a constituent region in the Ottoman Empire, and as an independent state since 1830, Greece has had particular geostrategic significance for Russia. Due to its geographic situation Greece for protracted periods acted as a pro-Russian and Orthodox mainstay in the Balkans (alongside Bulgaria, Serbia and Montenegro). Greece’s independence is to a great extent predicated on the active support – economic, diplomatic and military – that Russia rendered to that country’s national-liberation movement. At the same time, due to the significant political influence exerted on Greece by two other powers that also acted as patrons, namely Great Britain and France, relations between Russia and Greece in the 19^th century did not develop smoothly. In the final decades of the Russian Empire, Slavic states such as Serbia, Montenegro and, to a certain extent, Bulgaria were among Russia’s top diplomatic priorities in the Balkans.

After the end of the First World War, relations between the two countries came to a standstill – due to a series of events, including foreign intervention against Soviet Russia, rapprochement between Russia and Turkey, and the Greek government’s anti-communist sentiment. The short-lived improvement in Soviet-Greek ties on the eve of and during the Second World War was reduced to zero in the second half of the 1940s, due to the civil war that broke out in Greece. Right-wing forces prevailed in that war, while the country itself became little more than a NATO outpost in south-east Europe. Nevertheless, in the 1970s, after the collapse of the “black colonels’” dictatorship, some of the prerequisites needed to normalize and consistently develop bilateral contacts had been put in place. The potential threat from Turkey that grew ever stronger after the split with Cyprus in 1974, the coming to power of centrist forces and left-wing parties in Greece in 1981, and Greece’s strong desire to withdraw from the protection of the North Atlantic Alliance and to pursue more independent foreign policies – all these facilitated the further development of Soviet-Greek interaction.

Global changes at the end of the 20^th century, initiated by the end of the Cold War, encouraged broader cultural contacts between Russia and Greece. The tourist flow soared, and cooperation in cultural and religious spheres also revived.

Current Status of Russian-Greek Relations

By the mid-2000s, relations between Russia and Greece had come to be characterized by broad, multifaceted cooperation encompassing diverse issues in economic and cultural spheres and international security. Political contact between the two countries’ leaders, the development of joint economic projects, deepening military and technical cooperation, as well as a noticeable commonality of positions on pressing international issues (such as the recognition of Kosovo’s independence, war in Iraq, the UN role in conflict resolution, settlement in Cyprus, building a new European security architecture, etc.) became the key drivers for the further development of Russian-Greek ties. This makes it possible to say that a certain strategic partnership was taking shape in relations between Russia and Greece. In addition to existing institutions (Joint Russian-Greek Commission on Economic, Industrial and Scientific Cooperation, Joint Russian-Greek Inter-Governmental Commission on Military and Technical Cooperation, Greek-Russian Chamber of Trade) new organizations were set up, such as the Russia-Greece Council for Cooperation and Investment, Russian-Greek Business Board, and Russian-Greek civil society forums.

www.ellada-russia.ru
The signing of the agreement on
"South Stream" pipeline construction

As a result of these developments, a certain stereotype of Greece has taken shape in Russian political and social consciousness, much as it has in Europe, which is that of a country pursuing an international policy that is close to or even completely shared by Russia. It is worth noting that, in the European Council for International Affairs report “A Power Audit of EU-Russia Relations”[1] (November 2007) Greece was referred to as Russia’s “Trojan Horse.” However at the end of the first decade of the 21^st century it became apparent that this perception was far from reality. During the global financial and economic crisis, and changes in the political power in Greece, the vectors of bilateral relations between Russia and Greece outlined above dwindled in significance.

In addressing the various issues on which differences emerged between the two states’ respective approaches to future cooperation, it is best to start with the energy sector. Whereas Russia’s key objective was to gain a foothold on the Greek oil and gas market, Greece worked towards diversifying deliveries and was more than willing to strike deals with alternative suppliers (primarily with Turkey and Algiers which account for 40-50% of all gas imported by Greece[2]). The Panhelenic Socialist Movement (PASOK) government, which took power in 2009, actively pursued diversification, and a decline in internal demand for fuel triggered by an economic downturn cast doubt over the implementation of two key joint projects in oil and transportation: construction of the Burgas–Alexandropoulos oil pipeline and the Greek portion of the South Stream gas pipeline[3].

Military and technical cooperation proved even more unpredictable. The need to reduce the budget deficit, and pressure from its NATO partners forced Greece to cancel a number of projects envisaging purchasing military hardware from Russia while retaining a considerable amount of contracts with the Western countries.

Pushing key international security issues into the background and strengthening the Atlantic direction in its foreign policy has in effect left Greece and Russia with much fewer points of contact in that sphere than they had before. The alienation between Russia and Greece seen since 2009 fits well with a broader international trend in global development: under the overall trend towards globalization, it is trade and investments that come to the foreground while whether or not positive dynamics can be sustained in bilateral cooperation depends entirely on whether or not there are sufficient economic grounds. In the case of relations between Russia and Greece prior to 2009, their economic potential was not fully implemented. For example, even in 2008, the year that saw a climax in the two countries’ trade cooperation, trade turnover between Russia and Greece lagged behind that of Russia vis-à-vis Bulgaria and Romania, not to mention the situation in investment[4].

Deteriorating Relations between Russia and Greece: Underlying Reasons

In any discussion of the deep-rooted reasons for today’s alienation between Russia and Greece one first of all needs to note the profound, if not disastrous, reduction in the number of advocates and proponents of a continued dialogue between the two countries, and its practical implementation in trade and mutual investment. Why are Russia’s appeals and efforts hanging in the air, figuratively speaking, without adequate feedback from either the Greek public or from Greece’s political elite?

The first reason is the disappearance of the Russian lobby in Greece and Greek lobby in Russia. Bilateral relations, bearing the particular characteristics seen until recently both in Russia and Greece, as well as in Europe more broadly, developed quite actively, chiefly due to mutual interest displayed by elites in each country. Global processes in recent decades (an end to the global ideological confrontation of the Cold War, territorial and political changes in Europe, the breakup of the USSR, and Russia’s economic transformation) together lessen the role played by factors such as history, ethnicity, and faith, as well as that of geographical proximity. In effect, Russian-Greek relations were deprived of their former incentives for development[5].

For example, in the 18^th, 19^th and even in the 20^th centuries, relations between Russia and Greece were maintained at a high level mainly owing to the presence of large Greek diasporas in the Russian Empire and later in the Soviet Union. Before the 1917 revolution there were over 1 million Greeks residing in Russia. Although many returned to Greece during the 20^th century, in the dying days of the USSR they still numbered 358,000[6]. This figure can be supplemented by Greeks living in mixed marriages, as they normally gave a different national origin during population census. Most lived outside the RSFSR, largely in the Ukrainian and Georgian Soviet Republics, which explains why after the collapse of the Soviet Union the Greek diaspora in Russia totaled just 98,000[7]. It has continued to decline steadily over the last 20 years. Due to these circumstances, which led to a radical change in the national status of traditional Greek diasporas (transition under the jurisdiction of other states), Russia has been deprived of powerful internal motivation for lively bilateral interaction. Greece’s pro-Russia lobby was also shrinking.

It should be admitted, that Russia overlooked these trends, and failed to promptly undertake compensatory measures. At present only select individuals from the entrepreneur community act as initiators for the development of Russian-Greek relations. In spite of the fact that there are quite a few people with Greek roots among Russia’s leading business community, they play an insignificant role in economic ties between the two countries. Besides, they have to enter rather severe competition with the pro-Turkish and pro-Serbian lobbies in Russia, since Russian-Greek, Russian-Turkish and Russian-Serbian relations are quite close, if not of the same tenor in terms of their economic content. 

The second reason is the inertia displayed by Russia in its approaches to various options available in relations with Greece. This inertia is primarily caused by the fact that the current status and prospects for the two countries’ relations are viewed largely through historical and ideological stereotypes. The vantage point from which Russian-Greek relations are viewed at present must be recognized as obsolete, inconsistent with the global trend toward building up and strengthening the economic side of international relations.

The third reason involves a drastic deterioration of the Greek economy, changes in its foreign policy priorities, and its growing dependence on creditor countries. Contrary to opinions expressed by certain analysts, the crisis has not forced the Greek leadership to pursue a more diversified foreign policy. It has had the opposite impact: leading to more concerted economic (foreign economic included) policies implemented by Greece with regard to EU policies, whereas the policy on international security is more concurrent with broader NATO guidelines. These factors, negative as they are from the viewpoint of Russian-Greek relations, must be taken into account – at least until Greece is capable of recovering from the crisis.

Development of Russian-Greek Relations: Short-term Perspective

Russian companies’ possible participation in the privatization of Greek state-run companies that is to be implemented by the Greek government under pressure from the IMF, the European Central Bank, and the European Commission will be the key issue in Russian-Greek relations for the short term. This question was actively discussed during the official visit to Greece by the speaker of the Federal Assembly (and Russia’s former ambassador to Greece) Valentina Matvienko in September 2013 and at the Third Russia-Greece Forum of Civil Societies held in association with that event[8]. Options explored included Gazprom participating in the stock capital of Greek gas corporation DEPA and the joint participation of Open Joint Stock Company Russian Railways and Greek company Gek Terna in the privatization of Greece’s main railways operator TrainOSE.

In our view, Russia should display extreme caution in questions related to its participation in the privatization of Greek assets. One should take into consideration that Greece currently has the reputation of a chronic debtor, and according to some expert estimates, will take at least another decade to relaunch its economy, bringing it back to normal. Consideration should also be given to the fact that the experience of some Russian companies that were attempting to invest in Greece before the crisis was not always positive, while the specifics of EU anti-monopoly legislation may plunge any contracts in the key strategic sectors of the Greek economy (energy and transport) into reverse. Any sort of involvement in the process of financing the Greek government or providing it with additional credit lines can hardly be justified. Recent developments in Cyprus, which received a credit of 2.5 billion euro from Russia, have explicitly demonstrated the limited prospects as a result of such assistance both for Cyprus and for the Russian financial system.

The evaluation of Greek assets in the context of the country’s appeal for investment via through relevant agencies and organizations appears significantly more productive. At present, an overwhelming majority of these assets have lost their true value due to the economic crisis and the ensuing decline in internal demand for Greek goods and services. The approximate timeframe for the recovery and expected rise in the assets’ value could be used as a criterion for such an estimate. It seems logical to focus on those assets that will definitely gain in value following the economic stabilization and that therefore can be sold at a profit. Financial and economic operations aimed at the acquisition of prospective Greek assets and support to ensure their functioning could significantly reinvigorate Russian-Greek exchanges areas across the board, strengthening Russia’s presence in Greece and helping Russian companies gain additional expertise in doing business in Greece.

touristmaker.ru

There are great opportunities in investing in the Greek tourist sector. Given the rising influx of tourists from Russia (about 1 million people in 2013[9]) direct investment in the country’s hotel infrastructure would make it possible to accumulate funds spent by Russian consumers in the country and invest them in alternative profit-making assets. Greece would also benefit – through taxes paid. Russian capital-funded tourist business could help create jobs for a significant number of the unemployed in Greece, such as young people who are currently struggling with very high unemployment rates, and would also serve to intensify the dissemination of the Russian language in Greece. In broader terms, this process could aid the creation of a sizable segment of the Greek population that has an economic interest in developing and maintaining vigorous contacts with Russia.

However, some serious organizational measures would be required in order to attract high-profile Russian investors to Greece. Russian businesses rarely make significant investments in the tourist business abroad, let alone in a crisis-ridden economy.

Greece will be the presiding country in the European Union for the first half of 2014. The key goals of European policy under Greece’s chairmanship include resolving migration issues and further work on visa policies. The Greek Foreign Ministry has repeatedly stated its interest in Russia’s transition to a visa-free regime (the Greeks are counting on a radical rise in the number of visiting Russian tourists). In our opinion, in addition to lobbying for the lifting of visa restrictions it would be reasonable to expand opportunities for short trips to Greece on national visas under regulations set out in pan-European and Greek law. Success has already been achieved in issuing short-term visas for the Russians arriving on Greek islands from Turkey. There are also broad possibilities for extending the practice of issuing national visas (for example, for those with property in Greece).

An insightful and comprehensive analysis of the influence exerted by regional factors, above all Turkish, Balkan and Cypriot, on Russian-Greek relations is bound to become the next guide for Russia’s actions in the shorter term.

In the historical and economic context Turkey’s influence seems to be the most significant as it has managed to achieve a remarkable economic upsurge in recent decades and shows signs of playing a leading role in the region. Those involved in developing Turkish foreign policy (specifically Minister of Foreign Affairs Ahmet Davutoglu) are not averse to the idea of Turkey’s radical U-turn to the East and transition to an international course that would give it greater independence from its traditional Western partners.

Next in importance comes the Balkan factor, chiefly relating to Macedonia and Albania, as potential threats. So far both countries are generating territorial claims to Greece on an unofficial level, but in the longer term these could evolve into government claims demanding autonomy for areas where Macedonians and Albanians have been living in more or less close-knit communities.

As for the Cyprus factor, this involves further developments around the possible reunification of the Greek and Turkish parts of the island, i.e., the Republic of Cyprus itself and the unrecognized Turkish Republic of Northern Cyprus. Today the issue of Cyprus is one of the key subjects addressed in Greek-Turkish negotiations.

These factors have a serious influence on the internal and external policies pursued by Greece. In connection with this, Russian diplomacy needs to have clear-cut scenarios anticipating any possible changes in the situation in this strategically important region, and clearly defined courses of action in case any of these scenarios are implemented. Taking into account these factors, one could formulate a clearer picture of Greece’s place in international relations in the future, which in turn makes it possible to develop an adequate conceptual framework for the development of bilateral Russian-Greek ties.

SABO
The factory of the Greek company SABO

Long-term Strategy for the Development of Relations between Russia and Greece

In looking at long-term strategy, it seems logical to focus all efforts on creating a pro-Russia lobby in Greece’s political, economic and social life. Taking into account the extremely high youth unemployment rate (about 64%), it might make sense to invite young Greek specialists with skills and knowledge needed in key industries to work in companies that involve Russian capital. Broadening cultural and educational and, first and foremost, training programs in Greece as well as programs boosting the profile of the Russian language will also contribute to creating a positive image of Russia. Currently, Russian cultural and educational institutions[10] act as key centers for promoting the Russian language in Greece, while in neighboring Turkey Russian is taught in the leading universities. It is therefore necessary to take into account the potential of the Pont Greeks, many of whom were granted Greek citizenship in the 1990s and currently live in Greece while maintaining ties with Russia. But it remains an open question as to whether the children of these former Soviet citizens will use the Russian language.

Another important strategic vector of interaction is deepening and expanding the scope of cooperation within the framework of international organizations (chiefly in regional organizations such as the Council of Europe, Organization of Economic Cooperation Among the Black Sea Nations, etc.). The main practical outcome of this cooperation should be a common position on issues related to joint participation in infrastructure projects, above all in transportation and energy projects in the region that are in Russia’s interests. This would help Russia strengthen its stakes in the regional energy resources and freight shipment markets.

Pooling the efforts of the Customs Union states, the Eurasian Economic Community and the CIS as a whole on Greece also seems quite promising. Russia could develop the relevant initiative. In particular, a study could be initiated into the feasibility of joint investment in the prospective Greek assets or in international projects on Greek territory. This could help diversify the risks involved in Russian capital investments, reduce investment costs and help strengthen Russia’s cooperation with these countries.

Permanent monitoring of all available options in Russian-Greek military and technical cooperation is needed. Currently, significant results in this sphere are unlikely, given Greece’s NATO membership and its obligation to purchase arms from fellow NATO countries. For example, according to EU diplomat (Counselor in the European External Action Service) Robert Cooper, the military equipment of the armed forces in the Mediterranean countries, including Greece, is closer to Cold War standards than with modern military requirements, and that therefore Greece needs to upgrade its armaments and import NATO-made military hardware[11]. In the meantime, as demonstrated by the pre-crisis exports of Russian anti-tank guided missiles, anti-aircraft missile systems, etc. to Greece, one-off deals in this area are quite possible. Due to the financial difficulty Greece is experiencing, it is advisable to explore the options of exporting supplies under a credit line in cases where the relevant agreement could be tied to possible Greek concessions on energy and transportation projects. Another potential area of military and technical cooperation is the use of Greek seaports for refueling and maintaining Russian warships in the Mediterranean. Historically, Russia has enjoyed the use of bases on the island of Crete. It was from Crete that the Russian fleet departed with the legendary armored cruiser Varyag, which later sank in the Sea of Japan.

The period of alienation in Russian-Greek relations was largely predicated on the fact that, in 2009, Russia was not ready for a change of power in Greece. Russia backed the right-wing party New Democracy and had not maintained active contacts with the opposition. Due to the uncertainty prevailing in Greece and drastic fluctuations on the political landscape, Russian diplomacy should be cautious in its dealings with Greece. In the meantime it is important to continually monitor any changes in the political situation in the country and to build contacts with all forces that have any real chance of coming to power.

Conclusions

The implementation of these measures is unlikely to result in a radical uptick in Russian-Greek relations of the kind seen in the mid-2000s, especially since many points of contact are no longer relevant and no new points have so far been identified. The key task at the moment seems to consist of demolishing old stereotypes that have become a real hindrance to the development of bilateral cooperation. What is currently required is to draft and implement new reference points in Russian-Greek relations that correspond to today’s global realities.

A vivid example of the outdated stereotype is the image of Greece as a counter-weight to Turkey, which has deep roots in the Russian psyche. This image dates back in the history of Turkish domination in Asia and Europe, which came to an end in 1922. However in the Soviet Union and later in Russia the general idea of Turkey as Greece’s main opponent prevailed and remains quite widespread. In reality, despite certain disagreements on issues related to the delineation of maritime borders and Cyprus settlement, the two countries are actively cooperating within NATO and are successfully developing trade and investment contacts. In the short-term perspective, joint energy projects (chiefly the construction of the Trans-Adriatic pipeline to deliver gas from Azerbaijan to Italy via Turkey and Greece) could become a new impetus triggering a radical improvement in Greek-Turkish relations.

Greece’s attitude towards the conflict in Syria should serve as ample evidence of the illusionary nature of the anti-Turkish thrust in Greek foreign policy. In the military confrontation between the government and Syrian opposition forces, Turkey has taken a clear stand against the Syrian government. Greece could use this to demonstrate its independence and strengthen its influence in the region as a counterbalance to Turkey. All prerequisites for just such a maneuver are in place: all Greek parties, irrespective of their political affiliation, have traditionally taken a pro-Arab stand. This was quite natural as despite professed Muslim unity, deep-seated tensions between Arabs and Turks remain: the memory of the Ottoman conquest of Arab lands remains strong. Therefore, one can expect that officials in Athens could come out in support of Bashar Assad, albeit with some reservations. Given the absence of any such reaction from Greece one can infer that, as it stands, Greece’s anti-Turkish potential is close to a minimum.

Yet another stereotype concerns the perception of the Greek Orthodox Church as pro-Russian. Indeed the pro-Russia element has, until recently, occupied an important place in the Greek Orthodox faith, but nevertheless in recent decades it has been steadily declining, and not only in Greece. It is an open secret that the Church’s impact is falling throughout the world, especially among the youth. That is why religious commonality can hardly be regarded as the groundwork for the development of Russian-Greek relations. This, however, does not mean that we should oppose renewed contact in culture and religion. The same holds true for pro-Russia sentiment: despite the positive attitude most Greeks demonstrate toward Russia, the overwhelming majority of the Greek population is more likely to identify themselves with the EU rather than with the Orthodox world. It is vital not to underestimate this European, pro-Western component in the Greek political and social discourse.

It is also advisable to drop certain illusions about the centuries old history of Russian-Greek relations as a fact that can guarantee the consistent development of such relations in the future. Recent history suggests the contrary. Lack of action in political, economic and cultural fields will inevitably lead to a continuation of the stalemate currently observed in bilateral relations for an indefinite period.