Can Russia solve Greece's problems?
Thursday, June 18, 2015 - 02:05
Greece's Prime Minister Alexis Tsipras is in Russia to meet President Vladimir Putin as time runs out for Athens to reach a deal with its international creditors. Ivor Bennett looks at what he can achieve in a country where EU sanctions over Ukraine have just been extended.
A visit shrouded in secrecy but with a point difficult to miss. Greek Prime Minister Alexis Tsipras paying a visit to Russia as fears of a Grexit continue to grow. UPSOT (English) TSIPRAS "no time for interviews" Maybe not, but time for a meeting with Russian President Vladimir Putin. A reminder to creditors that Athens may have other options, but it won't be well received, says Justin Urquhart-Stewart of Seven Investment Management. SOUNDBITE (ENGLISH) SEVEN INVESTMENT MANAGEMENT, MARKET ANALYST, JUSTIN URQUHART-STEWART, SAYING: "It's putting further doubts that can he actually be trusted? What's he trying to do? Is he trying to negotiate an alternative just in case Greece isn't in the euro zone, isn't actually in the EU? Which will actually be frankly disastrous for everybody concerned. So I'm afraid that doesn't help much in terms of confidence." On his previous visit to Russia, Tsipras left empty-handed. But this time he could be more successful. Though a straight bailout has been ruled out, trade deals have been mooted. Along with an invitation to join the BRICS development bank. Plenty of opportunities for Russia too. SOUNDBITE (ENGLISH) SEVEN INVESTMENT MANAGEMENT, MARKET ANALYST, JUSTIN URQUHART-STEWART, SAYING: "Putin will love to of course be getting a large wooden spoon out to stir things up and make life more difficult for the EU partners. It's just another opportunity to get back at the people he blames for the problems Russia is now facing." The pair were meeting on the sidelines of the St. Petersburg Economic Forum. where business seems to be in full swing, despite an extension of sanctions. SOUNDBITE (ENGLISH) SEVEN INVESTMENT MANAGEMENT, MARKET ANALYST, JUSTIN URQUHART-STEWART, SAYING: "What you are seeing is some of the interesting trade sanctions being broken at the moment. I found an interesting example of some Serbian camembert. I wasn't aware that Serbia actually made camembert. But possibly relabelling French camembert as Serbian I think was quite interesting and imaginative if nothing else. So trade sanctions very rarely work, they normally go round the black market and go round the borders." Capital controls though may be harder to negotiate. Several large corporates are still frozen out from international markets And there's only so much help Russia can give. Still no sign of compromise though - Russia's Economy Minister signalling an extension to the ban on EU food imports as the counter-sanctions continue.