Sunday, 8 February 2015

A Tale of Two Crises : Greece and Ukraine.

Germany must and can be proud that Nazism has been eradicated here but it’s one of history’s most cruel ironies that Nazism is rearing its ugly head in Greece, a country which put up such a fine struggle against it"-Greek Finance Minister, Yanis Varoufakis.

“The Russian president and the prime minister emphasized the need for substantial improvement of the cooperation between Greece and Russia -- countries with deep and historic ties -- especially in the sectors of economy, energy, tourism, culture and transport,”-Office of Greek PM, Alexis Tsipras.

“I think that the Greeks – who have a very difficult life – know very well what a wrong election result would mean for Greece and the eurozone....I wouldn’t like extreme forces to come to power.”-President of the European Commission, Jean-Claude Juncker

The Greek crisis and the victory of Syriza is no longer only about the economic issues of debt repayment and protest against IMF and EU austerity policies.It has become a geopolitical clash between Germany and Greece in which Athens is starting to pivot eastwards away from a German-dominated EU.

Greeks are angry about German intransigence on the existing debt repayment. Protesters in Athens have likened Merkel to Hitler as Greeks go hungry just as they did in 1941. Back then Germany treated Greece as a colony and plundered it the better to ready itself for the attack on the USSR.

While these comparisons are evident hyperbole and designed to be manifestly offensive, there could be no question of the devastating impact a German led EU austerity policy has had on Greece since 2010. The IMF's insistence on 'structural reform', cuts to public expenditure and privatisations only deepened the crisis in Greece.

More than that, the economic policies of 'the troika' (the EU, ECB and IMF) ended up allowing the Greek oligarchs to use their political power and insider dealings to privatise state assets and make vast amounts of profit which could be stashed away in tax havens and in the London property market.

Economic contraction. mass unemployment and falling incomes, as well as high energy prices, have set Syriza, which is dedicated to breaking that negative downward spiral, on a conflict course with Berlin not only over its economic policies but also in opposition to its backing for Kiev again Moscow in the Ukrainian conflict.

One reason Tsipras has opposed EU sanctions on Russia over Ukraine is that it led Putin to drop the South Stream pipeline in December 2014. However, by choosing to route gas via Turkey in the blue stream alternative, Greece was bound to be aggrieved at this loss of a key pipeline that would have benefitted Greece.

Rivalry between Greece and Turkey is starting to rise over the issue of the fate of Cypriot gas in the rather intriguingly named 'Aphrodite' gas field. Discovered in 2011 just as the crisis deepened with austerity cutting into Greek living standards, the reserves offer Cyprus and Greece the possibility of reduced energy costs.

This has presented an opportunity for Russia to play a balancing role between both as the eastern Mediterranean becomes divided increasingly between two competing power blocks. Turkey has been anxious not to be frozen out of benefitting from Cypriot gas while Tsipras has condemned Turkish drilling in Aphrodite.

Though the dispute over Cyprus is localised it is becoming interconnected with a wider regional struggle in the Near East for control over gas and the construction of pipeline routes westwards into an EU which is looking for 'energy diversification' away from having to depend too much on Russia.

The US would want to offset the possibility of Turkish and Greek divisions over Cyprus opening up further. Washington made clear that the debt had better be relieved because of the possibility of Greece turning towards Russia should a 'Grexit' happen: this would complicate Greece and Turkey's role as part of NATO.

High energy bills have reduced Athenians to burning rubbish and scrap wood to stay warm in the winter of 2014. Meanwhile Germany and the US would appear to be at odds not only over Washington's move to further militarise the Ukrainian conflict by sending arms to Kiev; they are at odds too over the EU's approach to Greece's debt.

As Paul Mason indicates, Greece has become a cockpit of visceral geopolitical and historical antagonisms once more for the first time since the Greek Civil war of the late 1940s. With the fall of the oligarchy that has ruled Greece since 1974, older enmities within Greece and in relation to external powers have returned.

Syriza, of course, is a leftist political formation which is against war and imperialism. The Greek left were against NATO the Kosovo War in 1999 and Syriza expressed in its manifesto a wish not to be shackled in a post-Cold war world within structures such as NATO which cost money Greece does not have.

Greece has democratically overturned the political rule of the oligarchs in Greece. Syriza has little sympathy for those governing Ukraine after what some on the Greek left regard as 'fascist coup' given legitimacy by the EU and the US so as to advance the power of the IMF and western geopolitical interests.

Tsipras in May 2014 came close to endorsing such a position in Athens. He said "We should not accept and recognize the government of neo-Nazis in Ukraine. We in the EU should not give preference to changing borders, but must respect the position of the peoples, who had decided to create a Federation within the state"

The federalisation of Ukraine, as opposed to the eastern regions breaking away, became inevitable when Kiev proved determined in 2014 to pursue a military as opposed to a diplomatic solution to the Ukrainian crisis. However, that was not a German policy as much but down more due to incompetent bungling diplomacy.

EU sanctions on Russia led by Germany not only made the economy in Ukraine deteriorate further without forcing Putin to stop covertly backing Russian speaking insurgents in the east. They affected Greece both in affecting its strong trade ties with Russia and leading Putin to drop the South Stream pipeline.

While finance minister Yanis Varoufakis has claimed that taking Russian aid was 'not a thought on the table' this would imply it is not a thought that would not otherwise be considered if Germany is not prepared to climb down over the issue of refusing to renegotiate Greek debt repayment.

While finance minister Varoufakis went to Berlin first and then London, Tsipras' first moves were towards both Russia and Cyprus. Russia would certainly be seeking a stake in drilling for gas in the Aphrodite field and had offered to help bail Cyprus out as recently as 2013 before the Ukraine crisis.

The Ukrainian conflict has prevented both Russian gas being exported to the Balkans via the Black Sea Russia is trying to counter US moves to back the Kiev government with weapons by an attempt to influence Greece to reject sanctions through the promise of using its influence in Turkey to get more gas pumped to Greece.

While the US has appeared determined to ratchet up the military conflict in Ukraine, Putin would appear to be trying to act rather as Germany under Bismarck in the nineteenth century in posing as an 'honest broker' in the resolution of potential disputes in the Eastern Mediterranean over access to gas.

The danger to Greece in threatening to reject NATO and the EU, and tilt towards Russia, is that it might go beyond the point at which the US thinks acceptable. Already Radio Free Europe is starting a smear campaign in painting Syriza as a sinister crypto-Muscovite force in league with Russian fascists.

Tsipras has accepted an invitation from Putin to visit Moscow on May 9, though he decided not this time to use Greece's veto power to block additional sanctions on Russia after the shelling of Mariupol. However, there is no guarantee Tsipras would not the next time if the war in Ukraine goes on.

Moreover, should Berlin not back down over the debt, Greece could well be forced to go its own way and out of both the EU and NATO. It's likely Tsipras is playing hard ball so as to renegotiate Greece's position within the club of Western states but the Ukrainian crisis is helping to cause a systemic crisis.

Ukraine is both a consequence and a further cause of both the West and Russia having tried to overplay their hand during the 2013 protests. Having started off as a reaction to Putin's attempt to get Yanukovych to join Putin's Eurasian Union, the protests against that spun rapidly out of control.

Germany, after having come out publicly in favour of the Euromaidan protesters who demanded moving towards joining the EU along with other states, held out the alternative carrot as a way of motivating the protesters to demand a new pro-western government without having any back up plan.

Ukraine's economy had already been tanking for some time before 2013. In fact, it was the more industrialised eastern regions that were faring better than the largely agrarian west towards Poland. With the overthrow of Yanukovych the eastern Ukrainians began to fear for their economic interests

Fast tracking Ukraine into the EU and even NATO, as was implicit in certain initiatives as the Eastern Partnership dominated by the neoconservatives Radek Sikorski and Carl Bildt, would mean accepting the same sort of IMF 'structural readjustment' measures being imposed upon Greece.

It hardly went unnoticed in Ukraine's eastern regions in 2014 that the IMF bailout for Ukraine would mean the same austerity measures that had been imposed on Greece being visited upon Ukraine: it would have devastating consequences on ordinary Ukrainians while empowering the oligarchs all the more.

When Russia started exploiting the fears of eastern Ukrainians and in Crimea about what the 'fascist coup' would mean, one seemingly proved by the very real and dangerous co-opting of far-right paramilitaries as volunteer battalions to re-impose Kiev's authority in the east, the stage was set for civil war.

The IMF bailout was designed to prop up the Kiev government and prevent the state collapsing as well as to exploit the situation to enrich the right oligarchs; they would privatise Ukrainian assets, cut social expenditure and provide fresh, cheap and obedient labour supply for western corporations.

The danger of that callous form of 'disaster capitalism'-or the shock doctrine as Naomi Klein has called it-are clear; as in Greece, it led to the use of the far-right nationalist card as a way to deflect attention away from the cynical power game played by the oligarchs and so into the search for scapegoats.

Luckily for the Ukrainian oligarchs there was always Russia and long prior to the protests of 2013 the Ukrainian far right of Svoboda and Right Sector had been blaming 'Jewish-Bolshevist' Kremlin forces for Ukraine's economic predicament. Having used their muscle to oust Yanukovych,they needed a new role.

It is hardly surprising that in Athens Tsipras and Syriza would come out in opposition to Kiev given that they would fear any attempt by the Greek oligarchs to play a similarly sinister game in trying to use the neo-Nazi Golden Dawn party, which came third in the 2015 elections, to protect their interests.

Syriza has ranged itself in direct opposition to the oligarchs, many of who own Greek media channels. "We are going to destroy the Greek oligarchy system" said Varoufakis. Instead of taking Russian bail out money the emphasis is on clawing back the money the oligarchs looted from the Greek state.

The difference between Greece and Ukraine is that the Ukrainian protests against Yanukovych in 2013 were the right sort of protests against the wrong sort of oligarchs who backed a leader close to the Kremlin. Those protests were always backed with money as part of "democracy promotion".

Yet with Greece threatening not to repay the IMF it might be decided this time that these sorts of protests are of the wrong sort against the right sorts of oligarch who, through their influence in the two political parties that were willing to repay the debt, might after all start needing external help.

Even without that form of correct 'democracy promotion', through financing protest oppositionists should Greece's economy not improve fairly soon, it needs remembering that Greece has a relatively recent history of being ruled by the army as after the 1967 coup until 1974 when military rule ended.

While such a drastic course would surely be incompatible with EU membership, it could always be on the cards should Greece exit the Euro and the EU and then, moreover, threaten to leave NATO, ( one reason the US backed the 1967 military junta rule ) as part of the Greek state is still hostile to the left.

Update February 9 2015: Cyprus Announces Plans for Russian Military Bases.

Few seem interested in this angle on events in Greece. But events seem to have borne the prospect of a tilt towards Russia by Cyprus and Greece. Last night Cyprus announced plans to host a Russian base. This is about raising the stakes with the EU over the debt and countering Turkish hostility to Cypriot drilling.

Business Insider reported the news yesterday evening,

Cypriot president Nicos Anastasiades announced that the country is ready to host Russian aviation and naval bases. The official agreement on military cooperation between the two nations is expected be signed on February 25, 2015, according to

"There is an old [defense] agreement, which should be renewed as is. At the same time, some additional services will be provided in the same way as we do with other countries, such as, for example, with France and Germany," Nicos Anastasiades said. "Cyprus and Russia have traditionally had good relations, and this is not subject to change."

Cyprus' announcement comes after Russia expressed interest in having a military base in Cyprus in late January, according to the Global Post and Greek Reporter.

Notably, Cyprus is one of the 28-member states in the EU, which have been imposing sanctions on Russia over the past year in response to the actions in Ukraine.

And just like Greece has recently caused a stir by complicating the process of extending sanctions on Russia, Cyprus, too, just voiced some opposition to the additional sanctions on Russia, adding that many EU members share that opinion.

"We want to avoid further deterioration of relations between Russia and the European Union," the Cypriot president reportedly said. So military cooperation between Cyprus and Russia is yet another red flag for the EU.

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