As Greece prepares for a showdown with its European creditors, the country says it has other friends it could lean on. Namely, Russia and China.
Greece will ask for more time to negotiate a new long-term debt deal when it meets with eurozone finance ministers in Brussels on Wednesday. But both sides are far apart and the clock is ticking: Greece’s bailout expires at the end of February. Debt deadlines are looming, and government reserves are fast depleting.
“We have other ways of finding money,” Greek defence minister Panos Kammenos said on Greek television, “It could be the United States at best, it could be Russia, it could be China or other countries.”
Kammenos is head of the right-wing Independent Greeks party in the ruling coalition.
The comments come as the standoff between disgruntled lenders — in particular Germany — and Greece hardens.
Greece has promised to scrap many of the reforms that were required to secure its €240 billion ($272 billion) bailout, and wants to renegotiate the terms of the loans. But its European creditors are standing firm.
At the same time the small Mediterranean nation has drawn closer to old ally Russia. Relations between Russia and the EU are the worst they’ve been since the Cold War due to the Ukraine crisis.
Foreign minister Nikos Kotzias met with his Russian counterpart Sergei Lavrov in Moscow on Wednesday. Kotzias is said to have had close links to the Greek communist party during the Cold War. He also has a record of supporting Russia, including under Putin.
The two countries have established trade ties. Almost 13% of Greek imports came from Russia in 2013, according to the IMF. The countries have agreed to make 2016 the “Year of Greece” in Russia, and the “Year of Russia” in Greece.
But deeper financial links look unlikely. Berenberg economist Rob Wood said Russia is not in a position to provide enough aid to Greece. Russia’s economy is on the ropes as a combination of low oil prices and Western sanctions slam growth.
And if Greece was to turn its back on Europe, its banking sector – which faces dwindling sources of funding – would come under more stress. Russia doesn’t have the financial resources to keep its banks afloat, Wood said.
“It would be an enormous commitment and not something you could rock up to Moscow and ask for,” Wood said.
Then there’s China. China has invested heavily in Greece’s ports and has other trade ties with the country. It also has substantial foreign reserves of around $4 trillion, which could easily wipe out the loans Europe has issued to Greece. But there’s no obvious advantage to China stepping into a regional problem.
“Would China really want to wade into the middle of the eurozone in an antagonistic way?” said Wood. “For Russia there’s upside in destabilizing their opponent, but for China, I can’t see any upside, politically or economically.”
As for the United States, associate professor at the London School of Economics Spyros Economides said it’s unlikely it would move to rescue Greece.
“It may exert some kind of influence in European circles to make sure that Greece is not cut adrift. Would the [U.S.] step in and bail out a member of the eurozone? I can’t see that happening,” he said.