Sanctions Are Now Syriza's Bargaining Chip

JAN 28, 2015 8:47 AM EST

By Leonid Bershidsky

Bloomberg

“…I predict the Greek government will ultimately trade its sanctions vote for debt relief. If so, it will be revealed to be another bunch of cynical horse-trading politicians rather than a force for change, even as Greeks rejoice at seeing their national debt shrink…”

Greece's new rulers are engaging in dangerous brinkmanship: They may be bargaining too hard for the debt write-off they seek from the European Union.

On Tuesday, in one of its first foreign policy moves, the Syriza-led government distanced itself from an EU statement calling for additional sanctions against Russia for its interference in Ukraine. Since these can be imposed only by the unanimous consent of the EU's 28 members, Greece is essentially threatening to torpedo any further sanctions.

The leaders of the far-left Syriza party are blatantly pro-Russia.  Alexis Tsipras, the new prime minister, has echoed the Russian line that "neo-Nazis" are part of Ukraine's government (they are not, though some are parliament members, and neo-Nazi units fight on the Kiev side in the eastern Ukraine conflict). He has gone out of his way to stress Greece's "strategic partnership" with Russia. And the first foreign official he met with as prime minister was Russian ambassador Andrei Maslov.

Yanis Varoufakis, the Greek intellectual who has been appointed finance minister, is no friend of Russian President Vladimir Putin -- he once voted against Athens University awarding the Russian leader an honorary degree -- but in March he wrote a blog post calling on the EU to "stop meddling" in Ukraine. He accused the West of double standards in objecting to the Crimea annexation and described Ukraine as "the battleground between Russia's industrial neo-feudalism, the U.S. State Department's ambitions and Germany's neo-Lebensraum policies." In line with this judgment, last September, the six Syriza members of the European Parliament voted against the ratification of Ukraine's trade and association pact with the EU.

Greece's new foreign minister Nikos Kotzias has been photographed in the company of Alexander Dugin, a Russian imperialist ideologue who is close to the Russian private backers of the rebellion in eastern Ukraine.

And Greece's new defense minister, Panos Kammenos -- also the leader of the nationalist Independent Greeks, Syriza's junior coalition partner -- visited Moscow not long before the election, where he said  "sanctions against Russia are contrary to the interests of the people of Greece."

Within Europe, however, taking such a resolute stand against the Russia sanctions is extraordinary. So far, even the eastern European leaders who have grumbled about the sanctions have reluctantly voted for them. Tsipras's action puts Greece at loggerheads with Germany and Chancellor Angela Merkel, who by default has become the chief Western negotiator with Putin on the Ukraine issue. Merkel believes in punishing Russia for its expansionism and aggression. Could it be that Syriza doesn't care about that?

If Syriza is indeed headed for a confrontation with Germany, it risks jeopardizing its chief goal, the one that got it elected: a big write-off of its public debt. This is vastly more important to the Greek economy than any boost the country might get from resuming fruit exports to Russia or hosting more Russian tourists. Yet without the consent of Germany, Greece's biggest creditor, no write-off is possible.

Most likely, Syriza is trying to drive a hard bargain with Germany by demonstrating its ability to wreak havoc on European unity. The Greek government made its formal objection to the EU sanctions statement not as a matter of principle but on procedural grounds, saying it wasn't consulted before the statement was issued. Tsipras is signaling that Greece wants to be taken into account (and helped financially) before it toes the party line.

For an EU member, this is hardly acceptable behavior. Players more experienced than Tsipras understand that to get things done within the bloc, it helps to be polite and deliberate rather than loud and impatient. Merkel is especially irritated by tough-guy negotiating tactics (it's one reason her talks with Putin are not going well). Humility might work better, especially since Germans already understand that writing off some Greek debt is better than seeing Greece leave the euro area.

Though I think Europe's Russia sanctions are senseless and work only to prolong the conflict in Ukraine -- and I would not mind if Syriza nuked them -- I predict the Greek government will ultimately trade its sanctions vote for debt relief. If so, it will be revealed to be another bunch of cynical horse-trading politicians rather than a force for change, even as Greeks rejoice at seeing their national debt shrink. Merkel, for her part, may find Syriza's behavior distasteful, but European unity on key issues matters too much to her to let the exasperation show.

To contact the author on this story:

Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:

Mary Duenwald at mduenwald@bloomberg.net