Does Greece have a Plan B?

Stanly Johny | Updated on March 09, 2018 Published on February 20, 2015


That’s a billion dollar question

It’s a game of brinkmanship being played out in Brussels, between the Eurozone leadership and the new left-wing government in Greece. Obviously, both are under pressure, as the current €240-billion bailout programme for Greece expires on February 28. If a new deal is not reached by that time, the Greek government will run out of money, forcing it to default on payments, which would set the stage for what analysts call a “Grexit” (Greece’s exit from the euro currency area). The area of contention is the austerity measures imposed on Greece by the Eurozone as a condition for the bailout. The Syriza government led by Alexi Tsipras has vowed to dismantle these measures.

Greece has sought an extension of a long agreement for up to six months, which would not only give it an immediate financial relief, but also more time to negotiate a new bailout package. While it’s a climb-down from Athens’ previous stand, Prime Minister Tsipras still says his government would continue its anti-austerity measures. Germany, the largest euro economy, has already rejected the Greek request. The future is suitably hazy.

What’s interesting is Tsipras’ government has suddenly warmed up to Russia even as the Brussels talks were going on. There are two schools of opinion on Greece’s strategy. One says Tsipras has drawn up a pragmatic line vis-à-vis Russia so that he could use Athens’ veto power in EU on potential further sanctions on Russia as a bargaining chip to extract maximum from the Eurozone. The second school says there’s a Plan B. In case there’s a Grexit, Athens would turn to Moscow or Beijing for financial help. Russia will be more than willing to help Greece as it’s a NATO member, and would offer Moscow a strategic opportunity to expand its reach into the NATO red zone.

It’s to be noted that the new Greek leadership has increasingly been critical of sanctions on Russia. Foreign minister Nikos Kotzias was in Moscow last week, where he deplored the EU sanctions. Besides, defence minister Panos Kammenos of the rightwing Independent Greeks party that supports Tsipras’ coalition is known to be an “old friend” of Moscow. The indications are clear. A Grexit would alter not just Europe’s economy, but its geopolitics as well.

Stanly Johny, Assistant Editor

Published on February 20, 2015

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