Saturday, June 20, 2015

Russia and Greece Flaunt Solidarity at Business Forum, but Deals Are Scarce

ST. PETERSBURG, Russia — The leaders of Russia and Greece produced a grand pageant of solidarity, friendship and supposed economic cooperation at Russia’s annual gathering for global business executives Friday, but the embrace seemed mostly about thumbing their noses at Europe.

For President Vladimir V. Putin, giving the Greek prime minister a high-profile international platform served to eclipse the issue of the war in eastern Ukraine, which was all anybody could talk about at the St. Petersburg International Economic Forum last year.

“There was an obsession about Ukraine, headlines all the time — Ukraine, Ukraine, Ukraine,” said Charles Robertson, managing director and global chief economist at Renaissance Capital.
“Now, how many people died in the Donetsk region yesterday? How much shelling was there? Does anyone know?” he asked. “Greece has become the European story, rather than Ukraine and Russia.”


Alexis Tsipras, the leftist Greek prime minister, made a surprise appearance at the forum’s main event, emerging from the audience in the packed convention center to deliver a speech immediately after Mr. Putin.

It was a chance for him to bathe in warm applause while he denounced the European Union, to show that he had friends and to try to pressure Brussels to give a little ground in crucial debt talks next week. Yet he received no Russian money and limited investment pledges.

The result was perhaps best summed up by statements from the Kremlin and Mr. Tsipras after bilateral talks. They agreed to produce a joint memo about future plans for cooperation — by November. There was no discussion of financial aid, Russia said.

Mr. Tsipras himself recognized the incongruity of appearing in St. Petersburg while the economic fate of his country is uncertain. “Many are asking themselves the question, why am I here?” he said, acknowledging the urgent debt talks in Europe. “Why am I not in Brussels?”

For too long, he said, Europe has thought of itself as the fulcrum of the global economic order, while real weight is shifting to Asia, Russia and elsewhere.

About the closest thing to an actual deal was a memorandum of understanding signed by Greece and Gazprom, the Russian state energy giant, on the construction of a gas pipeline, an extension of one that will carry Russian gas to Europe through Turkey. Russia committed to pay for the pipeline and hundreds of millions of dollars in transit fees.

There are myriad bonds uniting the two leaders and their countries. Greece and Russia share the Orthodox Christian faith. Mr. Tsipras was a staunch Communist in his youth and has long been critical of the United States. He has opposed the West’s economic sanctions on Russia over the Ukraine crisis.

For months, there has been the tantalizing possibility of a grand bargain that would be a stick in the West’s eye: that Greece would provide the one vote needed to block European sanctions in exchange for a financial crutch from the Kremlin.

But the hard reality voiced by leading economic figures in Russia was that it was not about to lend Greece money; that it was not even going to buy Greek bonds; that its businessmen were as reluctant as the rest of the world to get involved in such an economic morass; and that the main question was whether the German chancellor, Angela Merkel, would decide in the crisis talks next week to extend the European Union’s lifeline.

At a post-speech session on Greek-Russian economic cooperation, political and business leaders continued to mouth odes to partnership, even noting that the countries shared a love of poetry.

But the numbers present a different story. Because of the Western sanctions and Russia’s blockade of many food imports from Europe, trade between Greece and Russia dropped 40 percent in 2014 and another 40 percent this year, officials said. Twenty percent fewer Russian tourists flew to Greece because of the collapse of the ruble against the euro.

Dmitry Razorenov, who presented himself as an enthusiastic Russian investor in Dodoni, a major Greek producer of feta and yogurt, provided a reality check. Outside investors are dismayed by the lack of predictability and transparency in the Greek economy, he warned, and are alarmed by the amount of debt companies there carry.

Mr. Putin echoed that sentiment. After arguing that Russia’s economic problems were receding, he shifted the focus, drawing laughter and applause by noting that the solution to the Greek conundrum lay elsewhere.
The Greek problem, he said, “is not just a problem for Greece, but for all of Europe.”




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