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Putin: EU should help Greek economy

Published 20/06/2015

Vladimir Putin, left, and Greek prime minister Alexis Tsipras held talks at the St Petersburg International Investment Forum (AP)
Vladimir Putin, left, and Greek prime minister Alexis Tsipras held talks at the St Petersburg International Investment Forum (AP)

Russian president Vladimir Putin has criticised the European Union's handling of the Greek debt crisis, insisting its focus should be on helping the country restore economic growth.

Mr Putin was speaking as Greece continued on a collision course with its lenders, with the prospect of possible default and a disorderly "Grexit" from the European single currency looming ever larger.

He said Moscow should be "applauded" for sealing an investment agreement with Greece on a pipeline to carry Russian gas to Europe via Turkey, with the potential for transit payments worth hundreds of millions of pounds a year to Athens after its completion in 2019.

The deal came as Greek prime minister Alexis Tsipras visited St Petersburg for talks with Mr Putin, which ended without any offer of a Russian loan to ease the current crisis.

Time is running out for Mr Tsipras's left-wing Syriza government, which must find 1.6 billion euro (£1.15 billion) to repay the International Monetary Fund (IMF) by June 30.

Eurozone leaders are insisting they will only release the next tranche of bailout funds Athens needs to make the payment if it signs up to tough new austerity measures - something it is refusing to do.

But Mr Putin said: "If the European Union wants Greece to pay its debts, it should be interested in growing the Greek economy, helping it to pay its debts.

"The European Union should be applauding us. What's wrong with creating jobs in Greece?"

Chancellor George Osborne warned the EU needed to be "prepared for the worst" after a meeting of eurozone group finance ministers in Luxembourg yesterday failed to break the deadlock.

Hopes of preventing the first withdrawal of a member state from the euro - with unpredictable and potentially far-reaching consequences for the rest of the continent - now appear to rest with an emergency summit of eurozone leaders in Brussels on Monday.

Amid signs that ordinary Greeks are taking their money out of the banks in increasing amounts - with two billion euro (£1.4 billion) reportedly withdrawn in the last three days - Mr Osborne said the Treasury was stepping up measures to protect the UK economy from any fallout.

"We have entered the eleventh hour of this Greek crisis, and we urge the Greek government to do a deal before it is too late," said the Chancellor. "We hope for the best, but we now must be prepared for the worst.

"In the United Kingdom we've taken the measures to increase our economic security so we can deal with risks like this from abroad. And clearly now we must go on and complete that plan."

Mr Putin's comments came as he met the heads of international news agencies - including Press Association chief executive Clive Marshall - on the margins of the St Petersburg International Economic Forum.

Addressing the forum earlier in the day, Mr Tsipras sought to turn up the pressure on the Europeans, indicating that he could look to Russia for help instead.

Such a move would alarm EU leaders, threatening to undermine solidarity at a time when they are seeking to maintain pressure on the Kremlin over the continuing conflict in Ukraine, with the renewal of sanctions requiring unanimous approval from member states to prevent them expiring next month.

Standing alongside Mr Putin, the Greek prime minister said Russia was "one of the most important partners for us".

In an apparent nod to his hosts, Mr Tsipras added: "We are at the moment at the centre of a storm, of a whirlpool. But we live near the sea, so we are not scared of storms, we are not scared of open seas, and of going into new seas. We are ready to go to new seas in order to reach new, safe ports."

He called on the EU to return to its founding principles of "solidarity, justice and social justice", warning that "strict economic measures will lead us nowhere".

"The so-called problem of Greece is not just a Greek problem, it is the problem of the whole European Union," said Mr Tsipras.

"We can't continue carrying the burdens of the past. If we continue doing so, continue making the same mistakes again and again, then we are doomed to failure."

Moscow had appeared to indicate it was ready to offer financial help to the Greek administration, with Deputy Prime Minister Arkady Dvorkovich saying Russia would "consider" a loan and Mr Putin's spokesman adding: "We would do this because they are our partners and this is a normal practice between countries who are partners."

However, a Kremlin spokesman said the possibility of a loan "wasn't discussed" during face to face talks between Mr Putin and Mr Tsipras, as the two leaders focused on "the necessity of developing investment co-operation".

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