Consular assistance in Russia

Russia is currently at war in Ukraine. Are you in Russia and need consular assistance? Find your country’s embassy in Russia on EmbassyPages.

Home News Greek PM Tsipras to guest star at Putin’s investment drive

Greek PM Tsipras to guest star at Putin’s investment drive

Published on 17/06/2015

President Vladimir Putin will showcase plans for a Russian recovery to investors at a key economic forum this week, signing a major gas deal with Greece as it teeters on the brink of default.

Greek Prime Minister Alexis Tsipras will meet Putin on Friday at the St Petersburg International Economic Forum, making his second visit to Russia in less than three months.

Once billed as Russia’s answer to Davos, this year’s forum will be overshadowed by the conflict in Ukraine, as well as taking place against the backdrop of increasingly tense wranglings over the Greek debt crisis.

Analysts say they expect few deals to be signed at the event amid continuing Western sanctions over Moscow’s alleged support for the pro-Russian separatists fighting in eastern Ukraine.

Tsipras has openly criticised the sanctions, but his dealings with Putin are unlikely to help his immediate problem of a deadline at the end of the month for a 1.6 billion euro ($1.8 billion) payment to the IMF.

“Tsipras is looking to manoeuvre” in an impossible situation, but his efforts are unlikely to bring Athens any hard cash, said Yevgeny Gontmakher, an economist with the Russian Academy of Sciences.

“He makes these trips to Russia to show the Europeans that he has other cards to play. Objectively, Russia is not capable of resolving the problem of Greek debt.”

The Russian government has repeatedly stressed that Greece has never requested direct financial aid from Moscow.

But ever since the radical-left Syriza party swept Greece’s elections in January, Moscow has been courting Tsipras, a former communist who has made no secret of his desire for closer ties with Russia.

Russian gas giant Gazprom has proposed footing the bill for building a Greek pipeline extension of the Russia-Turkish TurkStream project that aims to deliver gas to Europe while bypassing Ukraine.

Greek Energy Minister Panagiotis Lafazanis said while on a visit in Russia earlier this month that the financing has been agreed for the project, adding that construction would boost employment and cost $2 billion.

– Returning investor interest –

Sanctions and the falling oil price have contributed to Russia’s recession and to a 40 percent plummet in the value of the ruble last year.

The Kremlin has used its relationship with Tsipras to show that Russia’s economy is still strong and to point out cracks in European solidarity over the bruising sanctions against Moscow.

Putin, who is set to speak to international investors at the forum on Friday afternoon, has repeatedly stressed that the economy has passed the peak of the crisis and is beginning to recover.

He is likely to drive that point home in St Petersburg, but no major deals are expected to be signed at the event, despite a revival in interest in Russia investment among some businesses.

“Despite the sanctions, despite the confrontation between Russia and the West, the first shock has passed and after one year, there is a surge of interest from investors,” said Nikolai Petrov, a professor at the Higher School of Economics in Moscow.

The heads of oil giants Shell, BP and Total plan to come, and BP is close to signing a deal to buy a 20 percent stake in an oil field from Russia’s state-owned Rosneft, according to a Financial Times report.

The United States has warned Americans against attending, however.

In 2014, many CEOs from European and US companies cancelled their attendance after Russia’s annexation of Crimea from Ukraine.

“Russia is flouting most fundamental principles of international law,” US Ambassador in Kiev Geoffrey Pyatt wrote in a message to those considering attendance.

“Not time for ‘business as usual’,” he said, warning US businesses of economic and “reputational risks”.