Greek PM Tsipras defies European Union with visit to Russia. Demands $382 billion reparation from Germany

Greek PM Tsipras defies European Union with visit to Russia

Greek Prime Minister Alexis Tsipras today defied the European Union when he paid a visit to the Russian president,Vladimir Putin in Moscow. The meeting described as an eye-catching visit  has fuelled EU fears cash-strapped Athens is cosying up to Russia. The EU are so uncomfortable with the visit amidst the series of sanctions it has slammed on Russia over conflicts in Ukraine.

The two-day trip comes as Tsipras is battling to unblock a rescue package from the EU and IMF, with some in Brussels warning against any move to barter financial support from Moscow for political backing over the Ukraine crisis.

But analysts say that while the visit might see Moscow lift an embargo on Greek fruit, overall it is more about political grandstanding aimed at pressuring Europe rather than a serious shift in policy.

Tsipras, a former Communist who came to power in January, has made no secret of seeking closer ties to Russia at a time when Moscow is at loggerheads with the European Union over the conflict in Ukraine.

He has travelled to Moscow already last year, prior to his election win, to meet with several officials and lawmakers.

A number of Greek officials have openly broached the prospect of Athens turning to Russia or China for financial assistance if loan talks with the EU end in failure.

Russian President has however stated that Greek PM has not made any financial aid appeal. Mr Putin said that Russia would consider loans to Greece for joint infrastructure projects, including a natural gas pipeline. Russia was among Greece's leading trade partners before sanctions on its energy industry and Greece's own economic woes dropped trade between the two countries by 40%.

Mr Putin called for trade relations to be restored to their previous level, and said the two leaders discussed "various ways of cooperating, including major projects in energy".

"Under these plans, we could provide loans for certain projects. This is not about aid but about financial cooperation in major projects," Mr Putin said.

One of those plans is for a pipeline called "Turkish Stream", to channel natural gas from the Turkish-Greek border into Greece.

According to the BBC Mr Tsipras received a warm welcome in Moscow, which has seen its ties with the EU strained over Russia's actions in Ukraine.

The Russian president said the two leaders would "analyse what the two of us could do to restore the previous rate of growth" in trade.

Russia is not in a position to solve Greece's economic issues however, said Constantinos Filis from the Institute of International Relations.

"Russia is not and cannot be a (EU) substitute for Greece. It can only be a supplementary option," he said.

Greece demands $382 billion reparation from Germany

Meanwhile the cash-strapped Greece has demanded reparations from Germany. Greece says Germany owes it $382 billion in money and archeological objects stolen by the Nazis in the Second World War.

The Start reports that after decades of demanding the country’s cash and treasures back, Greek parliamentarians last Monday put a final price tag on how much they believe Germany owes them in repatriation payments — €278.7 billion ($382 billion), said Deputy Finance Minister Dimitris Mardas.

The money is expected to aid the debt-burdened Greece reduce its $431-billion debt and could save the Mediterranean nation from looming financial ruin as it struggles to make payments to its creditors.

On a recent visit to Berlin, Greek Prime Minister Alexis Tsipras said there are moral and ethical reasons why the Germans should reimburse Greece for the almost incalculable pain and suffering bestowed on the nation during the war.

Not only were ancient Greek treasures pilfered by the Nazis and money taken out of the Greek banking system, tens of thousands of Greeks starved to death so the Nazis could feed its war machine.

Tsipras’s left-leaning Syriza Party blames Germany for the recent hardships most Greeks have suffered due to austerity cutbacks in exchange for billions in loans to keep the country afloat. Germany, the economic engine of Europe, is one of Greece’s biggest creditors.

However, Germany is rejecting Tsipras’s arguments. German Vice Chancellor Sigmar Gabriel even called the Greek proposal “dumb,” reported the Telegraph, adding it confuses the current problem of Greek debt with the past. Germany said it paid Greece repatriation funds in 1960.

It all doesn’t add up for Miranda Xafa, a senior fellow at Waterloo’s Centre for International Governance Innovation.

“Greece had the opportunity to ask for additional reparation payments when Germany was reunified in 1990, but didn’t. Now that Greece is in dire straits financially, it pops up a request for reparations out of the blue,” Xafa said from Athens. Xafa also served as a member of the executive board of the International Monetary Fund in Washington from 2004 to 2009.

“I thought this issue had died out when Prime Minister Tsipras told Chancellor Angela Merkel during his recent visit to Berlin that Greece is asking for moral, not financial compensation,” she added.

Tsipras is reaching far and wide in his search for funds to prop up Greece. On Wednesday, much to the dismay of most European leaders, Tsipras is travelling to Moscow to meet with Russian President Vladimir Putin for what is being billed as talks on a wide range of subjects including finance and gas prices.

On Thursday, Greece must make a €448 million ($613 million) debt repayment to the IMF. Greek Finance Minister Yanis Varoufakis has promised Greece will not default.

And at the end of the month, Greece owes another €80 million euro ($108 million) in interest payments to the European Central Bank.

Some believe Greece could eventually default on its payments due to the Syriza government’s slow pace of economic restructuring and its wish to restore social spending to help the impoverished Greek people.

Greece is trying to reach agreement with official creditors, but progress is painfully slow, said Xafa.

“To make things worse, the Greek government’s legislative initiatives so far go in the wrong direction, insofar as they tend to raise government spending. The slow pace of progress has increased the risk of default, as Greece is running out of cash fast ahead of large debt service payments due in May and June, mainly to the IMF,” she said.

“Unless bailout funds are received in early May a disorderly default looms.”