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INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
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C O N F I D E N T I A L SECTION 01 OF 03 ATHENS 002171 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 11/06/2017 
TAGS: PREL PGOV RU GR
SUBJECT: GREECE AND RUSSIA: THE GROWING TIES -- THAT BIND? 
 
REF: A. 06 ATHENS 1298 
     ¶B. ATHENS 2137 
 
Classified By: CHARGE D'AFFAIRES, A.I., THOMAS COUNTRYMAN.  REASONS 1.4 
 (B) AND (D). 
 
¶1. (C) SUMMARY AND INTRODUCTION: Since the collapse of the 
Soviet Union, economic, political, religious, and cultural 
ties between Greece and Russia have deepened and broadened. 
Increased economic cooperation -- particularly in the energy 
field -- has been the most conspicuous area of growth, but an 
up-tick in cooperation in other areas is notable as well.  As 
Russia lately has re-asserted its claim to great-power status 
and global influence, primarily through its dominance of 
energy markets, questions naturally have arisen in Athens 
about the expanding relationship and Greece's ability to 
manage it.  Observer opinions are sharply divided over the 
dangers inherent in the expanding relationship; some believe 
Greek diplomacy lacks the expertise and perspective to manage 
it effectively.  So far, GOG efforts are focused on 
protecting Greek interests, particularly in energy.  Greece 
sees its relations with Russia in strategic terms but has a 
hard time articulating the strategy.  END SUMMARY AND 
INTRODUCTION. 
 
THE EXPANDING RELATIONSHIP 
-------------------------- 
 
¶2. (U) Bilateral trade drives Greek-Russian relations and has 
significantly grown in volume over the last decade. 
According to statistics published by the Greek Embassy in 
Moscow, total bilateral trade in 2006 amounted to over 4 
billion euro, with Greek exports to Russia (441 million euro) 
dwarfed by Russian imports to Greece (3.58 billion).  Trade 
with Russia accounted for nearly five percent of Greece's 
cumulative trade turnover.  In the period 2004-2006, Russia 
climbed from 14th to 11th largest importer of Greek goods and 
from 5th to 3rd largest exporter to Greece.  Energy 
represents the most important sector in bilateral trade. 
Greek imports from Russia consisted almost entirely of energy 
products (83 percent), with Russia supplying 60 percent of 
Greece's petroleum and 82 percent of its natural gas (ref a). 
 
 
¶3. (C) Russia has also aggressively courted Greece in its 
new-found role as a regional energy transit leader.  After a 
delay of many years, Russia, Greece, and Bulgaria signed an 
agreement on the construction and operation of the 
Burgas-Alexandroupolis (B-A) oil pipeline in March 2007, 
though negotiations subsequently bogged down over 
supply-share arrangements.  The Russians have also pushed the 
Greeks very hard to allow Russian gas to flow through the 
Turkey-Greece-Italy (TGI) interconnector, which was intended 
for Caspian gas, and to permit the Russian South Stream gas 
line to transit Greek territory, an arrangement to which PM 
Karamanlis signed on in June (though that deal too has 
subsequently stalled).  Greek officials and energy executives 
assure us they understand the importance of diversification 
in energy supplies to Europe.  But observers are now 
concerned about Karamanlis's December 18 visit to Moscow, 
where he could finalie B-A -- which Karamanlis considers a 
legacy issue -- with concessions to the Russians on GI and 
South Stream (ref b). 
 
BEYOND ENERGY 
------------- 
 
¶4. (C) The political-diplomatic realm also presents a complex 
picture.  When a common EU position has been identified, the 
Greeks generally adhere to it, and the Karamanlis government 
has supported the NATO-EU line in relations with Russia on 
such issues as the CFE Treaty.  But Greece -- as the only 
Orthodox country among the original EU 15 -- has at the same 
time claimed a special relationship with Russia vis-a-vis 
Western Europe.  During her December 2006 visit to Moscow, FM 
Bakoyannis spoke of Greece's "vanguard role" in strengthening 
ties between Russia and the EU, and last June, she told U/S 
Burns she regarded Greece as a "natural partner" for Russia. 
Putin has visited Athens twice in the last two years, and the 
Russian FM and DefMin have also visited recently.  Such ties 
translate into cooperation -- or at least a convergence of 
positions -- on such concrete issues as Kosovo independence, 
which Moscow (directly) and Athens (indirectly) have opposed. 
 Nevertheless, as the EU looks for a common position on 
Kosovo, Athens is attempting to reconcile its support for 
Belgrade with EU realities.  Athens does not see its dual 
partnerships -- with the EU and with Russia -- as conflicting. 
 
¶5. (C) Arms procurement is another area of potential 
cooperation, though so far there appears to be much more 
 
ATHENS 00002171  002 OF 003 
 
 
smoke than fire.  Moscow clearly would like to boost arms 
sales to Greece, probably as much or more for the political 
benefit as for the economic benefit, though the latter could 
be substantial.  Rosoboronexport and its agents are a 
prominent presence on the Greek arms-procurement scene, and 
Russian officials often speak of their desire to increase 
sales to Greece.  Greek officials, who often use defense 
procurements to curry political favor with foreign 
governments, have not been unreceptive to Russian advances 
and have discussed many proposals with the Russians.  But 
apart from the TOR missile deal in the late 1990s -- which is 
beset with technical problems and kickback allegations -- 
Greece has not signed a contract with Russia for a 
significant military system in years. 
 
¶6. (C) The purchase of Russian Beriev BE-200 fire-fighting 
aircraft is one deal the Greeks have been considering for 
some time.  The forest fires in August were an opportunity 
for the Russian planes to prove themselves in the Greek 
context, and Moscow was first to offer them when Greece asked 
for international assistance with aircraft (on a 
cost-reimbursed basis, like most other European countries). 
The Greeks are supposed to conduct an international tender 
this fall to replace their aging fleet of Canadair aircraft. 
The Russian BE-200 and a newer Canadair model are the only 
contenders, but each has problems: the Canadair are more 
expensive to purchase but cheaper to operate, while the 
Russian plane is unwieldy and requires fresh, not salt, 
water, which is at a premium in Greece.  There is, however, 
no question that Russia's swift provision of aircraft last 
August will be a major factor in Greece's eventual purchase 
decision. 
 
SOME TOUGH QUESTIONS 
-------------------- 
 
¶7. (C) Observers are sharply divided over whether this 
growing closeness is a cause for concern.  Retired Greek 
Ambassador Alcibiades Carokis told us the Karamanlis 
government was playing with fire in its dealings with Putin 
and wondered whether his former colleagues at the MFA 
understood the implications.  He worried that increased 
dependence on Russian energy could result in increased 
political dependence and questioned whether Greece had either 
the political will or the diplomatic skill to manage its 
relationship with Russia effectively.  "The Russians are very 
aggressive," he said, "and I really don't know what (the 
current Greek leadership) is trying to do." 
 
¶8. (C) Other observers take a more nuanced position, noting 
both the advantages and disadvantages of Greece's relations 
with Russia, though they too emphasized the negative risks. 
Andrew Liaropoulos, senior analyst at the Research Institute 
for European and American Studies (RIEAS), surmised that the 
various pipelines could finally make Greece an important link 
in the global energy chain and increase investment and 
technical know-how.  On the down side, however, Greece 
appeared headed for near complete dependence on a single 
energy source, which would likely result in Moscow also 
gaining a greater political voice in the region.  On Kosovo, 
Liaropoulos believed Greek cooperation with Russia added 
diplomatic weight to Greece's desire to preserve existing 
borders; but in the end, Athens could find itself supplanted 
by Moscow as Belgrade's voice to the West (if that ever could 
be said to have existed). 
 
¶9. (C) Ioannis Michaletos, a RIEAS Balkan Analyst, similarly 
ved was poised to move beyond the 
energy sector: Greece had a perennial problem attracting 
foreign investment and thus needed the capital, but 
increasing "state capitalism" in Russia and the growing power 
of the siloviki (the former and current security force 
personnel occupying increasingly prominent positions in 
Putin's Russia) meant Greece could find its financial system 
penetrated by Russian intelligence agents.  Michaletos and 
Liaropoulos were also pessimistic about the Greek 
leadership's ability to manage the relationship.  They argued 
that Greece continued to work on an ad hoc basis in its 
dealings with Russia and that Greek diplomacy lacked the 
expertise and perspective to see the "global picture." 
 
A MORE POSITIVE VIEW 
-------------------- 
 
¶10. (C) Chrysanthos Lazaridis, senior political advisor to 
New Democracy MP Antonis Samaras, took a more sanguine view. 
Lazaridis agreed that Greek diplomacy appeared unprepared to 
deal with the expanding Russian relationship and said 
Greek-Russian relations would continue to be defined by 
 
ATHENS 00002171  003 OF 003 
 
 
short-term objectives and peripheral concerns, which the 
Greek leadership mistook for "global" issues.  But he 
believed Greek-Russian diplomatic overtures in any case were 
mostly for show and lacked real substance.  Apparent 
cooperation on such issues as Kosovo represented a 
convergence of interests that would evaporate once the issues 
were settled.  Similarly, the pipeline projects were not 
important in the long run given the energy independence 
offered by transporting oil by sea.  Thus, while the Greek 
leadership was largely unprepared to deal with Russia, the 
problems were not so great that they wouldn't work themselves 
out. 
 
QUO VADIS, MOSCOW? 
------------------ 
 
¶11. (C) Johns Hopkins-trained Constantine Schinas, 
Expert-Counsellor on Russian Affairs in the MFA A5 
Directorate for Russia and the CIS Countries, offered perhaps 
the most balanced view, though he expressed real concern 
about the direction in which Russia appeared to be 
developing.  Schinas said the core of the relationship was 
economic, while much of the politics was "symbolic."  He 
noted Greek-Russian historical ties but said Greece's 
"special relationship" with Russia stemming from the common 
Orthodox faith really functioned only on a sentimental level. 
 Periodic summits took place and bilateral action plans were 
sometimes signed but there was no real substance.  Similarly, 
despite the hype, there were few military sales to Greece, 
primarily because Greece did not want to commit to systems 
that would not be NATO-compatible. 
 
¶12. (C) Economics -- and the energy question, in particular 
-- was another matter.  Schinas said as Greece had grown 
increasingly dependent on Russian energy, the GOG had watched 
with concern Moscow's attempts to use the cut-off of 
supplies, first in Belarus then in Ukraine, for political 
purposes.  Schinas thought the Kremlin had miscalculated and 
may have learned its lesson, but these incidents were 
troubling. 
 
¶13. (C) This brought Schinas to the crux of the matter. 
Russia might simply be interested in maximizing its energy 
market share and thus had an interest in Western Europe 
prospering and growing economically.  On the other hand, 
Russia's recent movement toward authoritarianism was 
disconcerting and raised the possibility that its ultimate 
goal was reasserting its political power through energy. 
 
COMMENT 
------- 
 
¶14. (C) So far, the Greeks have looked out for, and defended, 
specific interests, and we have seen them take tough 
negotiating positions with Moscow on energy deals.  But the 
Greeks often define their interests in regional, not global 
and strategic, terms.  This has been evident across a range 
of issues, from Afghanistan, to NATO enlargement, to security 
in the Aegean.  Our conversations with Schinas at the MFA 
suggest there are some in the GOG who are thinking about the 
big picture on Russia.  But we agree with those who question 
Greece's ability to manage its relationship with Russia 
effectively. 
 
¶15. (C) The Greeks clearly enjoy being courted by the 
Russians, even if they often play hard-to-get.  Putin has 
visited twice in the last two years, and we do not expect any 
slowdown in Russian advances.  This is why high-level visits 
to Greece by U.S. officials, such as Secretary Bodman's visit 
later this month, remain important. 
COUNTRYMAN