Publication: Eurasia Daily Monitor Volume: 4 Issue: 236

Following the defeat of German General Erwin Rommel’s vaunted Afrika Corps in North Africa in 1943, British Prime Minister Winston Churchill pressed for a subsequent Allied invasion of either Italy, the Balkans, or Greece, arguing that the regions represented the “soft underbelly of Europe” to forestall Soviet moves there. Sixty years later, it would seem that Gazprom, rather than the Red Army, has made significant inroads into both Italy and Greece, only this time, the weapon is natural gas and oil sales.

Quite aside from the issue of energy dependency, the Russian Federation is in discussions with Greece to sell it significant amounts of military equipment, a first for a NATO ally. What discreet pressure Washington and the European Union can bring to bear on Athens remains to be seen, with Turkey as an additional observer anxiously concerned about Greece’s “weapons and pipelines” diplomacy.

At the heart of Washington and Ankara’s anxiety is the proposed South Stream natural gas pipeline, projected to deliver Russian gas under the Black Sea to Bulgaria and then onward through Greece, Italy, and other European Union states. A Burgas-Alexandroupolis oil pipeline is also in the works.

Greek Prime Minister Costas Karamanlis, on his second official visit to Russia this year, is building upon the momentum gained since he announced Greece’s participation in the South Stream project on June 23. Six months ago Gazprom and Italian energy company ENI signed an agreement for a pipeline from Russia’s Krasnodar Beregovaya compressor station under the Black Sea to Bulgaria, with two subsequent branches via Romania and Hungary to Austria and Slovenia and via Greece to southern Italy. The pipeline would have an annual capacity of 30 billion cubic meters (Prime-Tass, December 18).

Cooperation on South Stream and other energy projects is proceeding apace. The Russian government monopoly Transneft issued a press release stating that Russia, Bulgaria, and Greece had initialed an accord to create a company to build the Burgas-Alexandroupolis oil pipeline bypassing the Bosporus, an adroit piece of diplomacy that undercuts Turkey’s complaints about the Bosporus and Dardanelles being turned into a tanker superhighway for Russian and Kazakh oil exports (Interfax, December 18). In a now familiar pattern of Russian energy-export hardball, under the terms of the agreement Russia will have a 51% stake in the company. The South Stream pipeline is to come on stream in 2013 and Russian President Vladimir Putin told reporters that Gazprom may extend its gas supply contract with Greece until 2040, after the current contract expires, doubling its deliveries. To put Putin’s proposals in perspective, in January-August 2006 Gazprom’s gas exports to Greece totaled a paltry 1.65 billion cubic meters.

For his part Karamanlis was effusive about his meetings with Putin, telling journalists, “The historic ties between our countries are getting stronger, especially in the sphere of energy, which is particularly important for us.”

If the issue of Greece providing a conduit for southern Europe, thereby increasing energy dependence on Russian natural gas, is not a worrying prospect, the growing cooperation between Russia and Greece in the military sphere is an additional cause for anxiety.

Putin is upbeat about increased Russian-Greek military cooperation, telling reporters, “Russia does not have any limitations on its collaboration with Greece in this direction, except those which we took upon ourselves within the framework of international obligations. These concern weapons of mass destruction…Everything else is possible…[including] possible joint developments and production of weapon systems and special technology on Greek territory,” concluding that Russia was “a very reliable partner” (ANN, December 18).

The growing Athens-Moscow political nexus apparently will not be limited to energy and military cooperation. That Greece may well prove to be an interlocutor for Russian interests with the European Union seems evident in an exclusive interview Karamanlis gave Itar-Tass in Athens prior to his departure for Russia. He stated that Greece hopes for the earliest beginning of talks on concluding a new agreement between the European Union and Russia. Karamanlis said, “Relations between the two sides [Russia and the EU] are at a very high level thanks to the cooperation they are developing and the dialogue held between them on various bilateral and international issues. Despite this I believe there are major possibilities for the improvement of our cooperation. Especially if we assess the political events of recent years that have allowed the EU and Russia to attain rapprochement on issues of principles and interests, as well as the fact that there are international problems linked with our region. Then it is obvious that the necessity of further dialogue and coordination of activities becomes more imperative and urgent” (Itar-Tass, December 17).

For the last seven years Washington has failed to address the Greek-Turkish dispute within the larger context of either its relationship with its NATO “southern tier” allies or Russia’s relations with the EU. South Stream and the Burgas-Alexandroupolis oil pipeline represent sophisticated maneuvers by Moscow to expand its influence in southern Europe by diminishing Washington’s influence there. In fact, it neatly cuts Turkey out of the transit equation, while the Burgas-Alexandroupolis pipeline ostensibly addresses Ankara’s environmental concerns over the Turkish Straits. If Washington is to halt or reverse its declining influence with its southern European NATO allies, then some new thinking is needed – and the sooner the better.