Perfect Circle

At last, an opportunity to use my Putin cartoon.

It’s just a rumour, but I’ve been expecting that something like this will happen.

According to Spiegel, citing a senior figure in the ruling Syriza party, Greece is poised to sign a gas deal with Russia as early as Tuesday which could bring up to €5 billion into the depleted Greek coffers….

…the Russian leader is not acting out of the kindness of his heart, but merely engaging in another calculated move, one which kills two birds with one stone:

Following the death of the South Stream, whereby the EU pressured Bulgaria to refuse passage of the Russian gas pipeline to Europe, Russia needed an alternative route of bypassing Ukraine (and Bulgaria) entirely, something which according to Kremlin’s plan should happen over the next 3 years. And with Hungary and Serbia all eager to transit Russian gas to the Austrian central european gas hub, Greece was the missing link for a landline transit. With this agreement, Russia gets the green light to extend the Blue Stream all the way to Austria and preserve its dominance over the European energy market while leaving Ukraine in a complete bargaining vacuum.

Perhaps just as importantly, suddenly Russia will emerge as the generous benefactor riding to Greece’s salvation, in turn even further antagonizing the Eurozone and further cementing favorable public opinion. As a reminder, several weeks ago we showed that Russia already has a higher approval rating among the Greek population than the Eurozone. In this way, Russia has just won a critical ally for the very low price of just €5 billion, without even having to restructure the entire Greek balance sheet should Greece have exited the euro and been attracted to the Eurasian Economic Union. Which also means that all future attempts to impose further sanctions on Russia by Europe will fail thanks to the Greek veto vote. (slightly edited for readability)


Finally, for those confused about the flow of funds, here it is:

Russia (Gazprom) gives Greece money, which Greece uses to repay the IMF, which uses the Greek money to fund a loan to Kiev, which uses the IMF loan to pay Russia (Gazprom).

A perfect circle.

Given this perfect circle, I don’t see what’s to stop Russia simply paying Greece’s debts, especially if it’s going to get the money back via Ukraine.

putin-tracePutin would seem to be holding all the cards. By paying Greece’s debts, it would make Greece dependent on Russia, and keep it exercising its European veto on Russia’s behalf. Also, by paying Greece’s debts, it would be preventing a Greek default which could bring down the European banking system, with the implicit threat that it could precipitate such a crisis any time it liked. And in the process it would be able in a few years to export gas to Europe via Turkey and Greece, and be able apply pressure on Ukraine (by turning off gas supplies completely).

Greece offers Russia a back door into the EU, and they’ll want to keep Greece in the EU, acting as a Russian proxy. It might be Tsipras who attends EU conferences, but it may as well be Putin.

I’ve been expecting a Greek default almost any day. But now I wonder whether Greece will now “unexpectedly” manage to keep paying its debts, stave off bankruptcy, and remain in the EU.

All thanks to Uncle Vlad. Who, despite being an antismoker, may yet turn out to be the man to bring down the EU, and with it the EU smoking ban.


About Frank Davis

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13 Responses to Perfect Circle

  1. jaxthefirst says:

    Clever old Putin, eh? But the EU leaders should have been aware that this was always a possibility. Given the huge amounts of gas that they have to buy from Russia, it was always going to be likely that he’d use it to his advantage. It just goes to show how massively arrogant and out of touch they are – they think they are so supremely superior that they can’t even see when someone else is holding all the trump cards. Idiots. No wonder they’ve driven the whole of the Eurozone into the ground with their anti-business, idealist policies and their unceasing meddling in everything from how heavy industry operates to whether or not people enjoy a cigarette or two in a bar or a pub.

    It’s always been debatable which would be more dangerous to ordinary people – intelligent, canny (but evil) EU leaders, or inept, out-of-touch (but still evil) ones. Turns out, for those of us who despise the EU, that the inept variety was better after all, simply because they’re likely to bring about their own demise through sheer lack of any ability to accept how the world really is and by being more interested in strutting around bragging about how important they are than in doing an even half-ways decent job of running Europe.

    I don’t know if Putin will choose to bring the EU down. I suspect he won’t (sadly), because it probably suits him very well to have a struggling Europe on his doorstep, largely dependent upon him for its energy, which he can use as a major bargaining chip to make sure that the EU doesn’t do anything which will stop him from doing precisely what he wants to do (whatever that is – empire building, probably). A collection of different nations as neighbours, all thriving and doing very well (as I am sure they would do if free of the EU) would make life altogether more difficult for him.

    Shame he’s an anti-smoker. He’d be even more of a cool, dashing hero if, as well as sticking the proverbial two fingers up at the self-important EU and his troublesome neighbours in Ukraine, he was also seen brazenly ignoring the instructions of the puritan health lobby by gratuitously smoking at every opportunity, whenever and wherever he wanted.

    • Frank Davis says:

      He’d be even more of a cool, dashing hero if, as well as sticking the proverbial two fingers up at the self-important EU and his troublesome neighbours in Ukraine, he was also seen brazenly ignoring the instructions of the puritan health lobby by gratuitously smoking at every opportunity, whenever and wherever he wanted.

      Exactly. If there’s anything that shows that Putin has feet of clay, it’s that he’s an antismoker, and is therefore in thrall of all that nonsense. He even hosted the WHO antismoking summit in Moscow last year, at the height of the ebola epidemic.

  2. waltc says:

    Talk about the devil and the deep blue sea or the rock and the hard place, the floundering countries of the EU simply get their choice between irrational masters.

    RUSH: Well, smokers aren’t killing anybody.

    CALLER: Except themselves.

    RUSH: Yeah, but how long does it take?

    CALLER: If you’re in an environment where somebody smokes, you can get secondhand disease from —

    RUSH: No.

    CALLER: — secondhand smoke.

    RUSH: No. You can’t. That is a myth. That has been disproven at the World Health Organization and the report was suppressed. There is no fatality whatsoever. There’s no even major sickness component associated with secondhand smoke. It may irritate you, and you may not like it, but it will not make you sick, and it will not kill you.

    CALLER: Okay.

    RUSH: Firsthand smoke takes 50 years to kill people, if it does. Not everybody that smokes gets cancer. Now, it’s true that everybody who smokes dies, but so does everyone who eats carrots.

    CALLER: Yeah, but people in the hospital with scalpels are not doing it to hurt anybody. I mean, when you pick up a cigarette and you’re smoking, you’re kind of doing it because you have some kind of —

    RUSH: Right.

    CALLER: — psychological need.

    RUSH: You know, I was cutting a steak one day for lunch in Sacramento, in fact, and I missed and I hit my finger. I didn’t do it on purpose, but I’m damn glad there were bandages. Maria, here’s the point. Here’s the point. You are having a knee-jerk reaction, and I’m glad you called. I’m glad you called, because you’re giving me an opportunity to explain this thing further.

    CALLER: Okay.

    RUSH: In our country, for the longest time, we have created a hatred for people who smoke. Some people actively despise them and hate them. We have not banned the product. We continue to sell the product, and we profit from the product. We fund children’s health care programs with the tax revenue from the sale of tobacco products. If tobacco is so deadly, if it is so bad, why does our government permit it to be sold? And the answer is —

    CALLER: We tax everything. We tax everything in the United States. Everything is taxed. You’re making money from everything here.

    RUSH: I’m telling you, there ought to be some measure of appreciation for people who buy tobacco products, despite the forces arrayed against them, It’s getting harder and harder to use tobacco products, unless you want to call marijuana tobacco, and you can do that anywhere, for the most part. But the fact of the matter is they have to endure a lot, the public hates them, they’re despised, they can’t smoke in places of comfort anymore, can’t even smoke outside in a park! And yet their actions and their taxes and their purchases are funding children’s health care programs. I’m just saying there ought to be a little appreciation shown for them, instead of having them hated and reviled. I would like a medal for smoking cigars, is what I’m saying.

    CALLER: You could say the same thing about all these people that are drinking soda like Coca-Cola and eating potato chips .

    RUSH: What’s wrong with that?

    CALLER: And chocolate bars, pretzel, popcorn, everything, all that, all those kinds of foods are kind of harmful. I mean, they say that it’s increasing the obesity in the United States, and everything, but, I mean, people have a right to eat what they want, drink what they want.

    RUSH: No, they don’t. That’s the point. The kids in school in Virginia do not. They have to eat the crap that Michelle Obama puts in front of ’em. We don’t have the right. In New York City you can’t buy a Slurpee bigger than 16 ounces. In New York, you can’t eat what you want. This is the point, Maria, this is what’s happening. Every day we’re losing a little of the everyday freedom you just described. Every day, little by little, so much so we don’t even notice it until it reaches a tipping point.

    What’s so bad about potato chips, for crying out loud. Look at all the things we demonize. Soda pop, potato chips, look what they’ve made you believe. They’ve got you believing all that stuff kills people. I’ve never seen a death certificate: Cause of death: Frito-Lay. I’ve never seen it. I’ve never seen Cause of death: Tobacco products. Not everybody who smokes gets cancer. The most shocking event in the world is when somebody gets lung cancer and they never smoked, and everybody says, “How the hell did that happen?” Because everybody’s been so persuaded to believe that it’s automatic.


  4. smokingscot says:

    There may be another sting in the tail with Greece. The Finns are going through an election where their coalition may have to include the Finn Party – and they oppose EU-led bailouts and want Greece out of the eurozone!

    Preliminary results (and they’ll be dribbling in all night) indicate the Finn Party’s may come in 4th with close to 16% of the vote.

    The last coalition consisted of four parties that worked terribly hard to keep the Finn Party out. This time the likely head of the lead party has stated he’s quite happy at the prospect of the Finn Party
    joining in the coalition.

    (What’s ironic is Finland’s actually in deep financial slurry and may itself need an EU bailout in the very near future).

    All with be revealed in a couple of months time when they eventually staple together some sort of coalition.

    • nisakiman says:

      Yes, I’ve been following the Finnish situation with some interest. As you say, they are themselves in deep shit financially, with an under-performing economy, so I do wonder why they are so implacably opposed to the kind of bailout for Greece that they may well need themselves in the not-too-distant future. Maybe they think that if Greece gets the money, there will be none left for them! :)

      Whatever, the Greeks are playing a high-stakes game by introducing Russia into the equation, and it may well turn out to be their trump card. They do after all have traditionally close ties with Russia by way of a shared religion, a tie not to be dismissed lightly. For many, the orthodox church is more important than any political consensus or economic imperatives.

      Watch this space!

  5. DICK R says:

    Well done Putin, another nail in the EUSSR coffin is always welcome!

  6. Greek eurozone exit edges closer as markets brace for Athens default

    As eurozone officials prepare for further talks on Greece, investors are sceptical that Athens can agree reforms that will unlock further bailout funds

    • Eric Dufau 1h ago

      Come on, Greece, exit the Euro zone, exit the EU. There will a couple of difficult months, but restoring your independence through re-establishing a Greek central Bank (owned by the Greek state, obviously) will put you back on tracks. Great bargain: you Greeks won’t fall into slavery. From then on, you would be able to join the BRICS and everything will be fine.
      Icing on the cake, you’ll have the immense pleasure to watch the entire collapse of the EU house of cards. And maybe more – I don’t see how the TAFTA will work, with all those crumbling nations.

  7. Frank Davis says:


    Greek sources have told The Telegraph that Syriza may sign a deal with Russia for Gazprom’s “Turkish Stream” pipeline project as soon as next week, unlocking as much as €3bn to €5bn in advance funding.

    This confirms a report in Germany’s Spiegel magazine, initially denied by both the Russian and Greek governments. It is understood that the deal is being managed by Panagiotis Lafazanis, Greece’s energy minister and head of Syriza’s militant Left Platform, a figure with long-standing ties to Moscow…

    Bridging finance from the Kremlin would transform the situation, allowing Greece to avert a disastrous clash with the IMF. Syriza could then confine its dispute to EMU creditors and particularly to the ECB, the body deemed enemy number one by embittered Syriza ministers.

    The drama has escalated into a bizarre form of brinkmanship for the highest stakes, with Greece effectively playing off Moscow, Brussels, and Washington, against each other in three-way geo-strategic poker.

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