Putin Bails out Greece and Cyprus for Control of Their Energy Assets
President Vladimir Putin had more than one fish to fry in dispatching a flotilla of 11 Russian warships to the eastern Mediterranean this week. While the world media and intelligence experts took it for granted that Moscow was bent on thwarting foreign intervention in Syria first, followed by Iran, the Russian President had his eye firmly fixed on the up-and-coming gas and oil fields of the eastern Mediterranean, not far from Syria.
The Russian warships were also on hand to secure the hottest new acquisitions about to fall in Moscow’s lap.
According to DEBKA-Net-Weekly's intelligence and Moscow sources, Putin seized on the Eurozone crisis with an offer to bail out the Greek and Cypriot economies, just as European Union and US financial czars were flapping about for ways and means to minimize the damage caused by their exposure to the sinking Greek economy.
The Russians are driving hard bargains with Athens and Nicosia, our sources report. Credit lines granted by Moscow to rescue them from economic disaster will cost them dear in many fields, including sovereignty, our sources reveal:
1. Greece will have to sell out its entire energy infrastructure to Russian companies – power stations, oil and gas import firms, oil and gas pipelines running through the country – and here comes the punch line – all its offshore Mediterranean and Aegean oil and gas fields, both developed and still in the planning stage.
Russians directors will hold majority membership on all the boards of Greek energy enterprises.
Athens will then be awarded credit lines to a level not yet fixed but estimated in the $10-15 million range.
Cyprus like Greece must mortgage its oil riches to Russia
2. Cypriot banks have suffered knock-on damage from defaults on loans to Greece with disastrous effect on businesses and households, compounded by multibillion losses from the restructuring of Greek bonds earlier this year.
Moscow is offering Nicosia a $5 billion “loan” on easy terms. Repayment will be made by the “sale” of administrative and strategic control to Moscow of the oil and gas pipelines planned to link Cyprus and Greece when their Mediterranean gas and oil fields come on stream.
Russia’s state-controlled energy giant Gazprom will thus have its hand on the spigot of Cyprus’s energy exports.
3. For the Kremlin, the deal with Athens was a breeze: Alexis Tsipras, head of the far-left Greek SYRIZA group and main opposition party, and also some leaders of the socialist PASOK group within the government coalition, have closer ties to Moscow than to Brussels. It was therefore not hard to persuade the Greek government to accept the Russian proposition in principle and start implementation.
In Cyprus too, Moscow found a willing partner in President Demetris Christofias of the local communist party Akel, although he keeps up the pretence that negotiations are still ongoing.
Russia strikes two more footholds in the Mediterranean
"Don't worry, we won't be bringing communism to Cyprus because we have relations with Russia," Christofias told reporters last week, flanked by European Commission President Jose Manuel Barroso.
"Like any other European Union state, we maintain the right to also maintain relations with third countries." The Cypriot president spoke the truth. Receipt of $5 billion from Russia now and $2.5 billion last year will not bring communism to the island because even in Russia it is hard to find.
But his smooth assurances neatly disguised the fact that the European crisis has had the indirect consequence of restoring Russian influence to Greece and Cyprus for the first time since it was displaced at the height of the Cold War half a century ago.
This development belies the confident assertions by American strategic planners that by backing Bashar Assad, Moscow has forfeited all its power points in the Middle East. In fact Putin is sitting pretty at two solid points in the Mediterranean in addition to Syria.
It is also a knock for Israel. The Binyamin Netanyahu government sets great store by the alliance established between Israel, Greece and Cyprus for economic, energy and military cooperation as a key buttress for its Middle East standing.
Israel received a similar Russian proposition
During his visit to Jerusalem on June 25-26, the Russian president also offered Israel Gazprom financing for developing its offshore oil and gas fields, constructing pumping stations and building pipelines for exporting the oil and the gas. Putin explained that the Russian presence in Israel’s energy industry would neutralize the security perils hanging over its gas and oil fields from the Hamas in Gaza, Hizballah in Lebanon and Turkey.
It goes without saying, Putin stressed, that none of those three would dare attack a Russian oil drilling platform or pumping station.
Israel has not so far given the Russian president an answer.
But this week, Israeli Navy Commander Gen. Ram Rothberg presented the government his plan for securing the new oil and gas fields – plus a bill for its cost totalling $1 billion.
Putin did not let the grass grow under his feet. Bypassing Israel, he pushed ahead and seized on the economic weakness of Greece and Cyprus to get what he wants from them: a major Russian stake in the new Mediterranean energy bonanza.