Speculation rife over Russia’s Turkish Stream loan to Greece

Turkish Stream route [Gazprom]

An agreement between Moscow and Athens for the construction of the “Turkish Stream” gas pipeline, expected to bring up to €5 billion to Greece, may possibly be signed at the start of next week, Greek government sources said on Saturday (18 April).

According to an article in Greek financial newspaper Agora, the amount will be an advance on the profits to be made by the Greeks from transit fees. The article said signatures cementing the deal agreed in Moscow during a recent visit by Prime Minister Alexis Tsipras may be placed as early as Monday.

Turkish Stream, which will transport Russian natural gas via Turkey and Greece to the rest of Europe, is expected to be implemented by 2019.

>> Read: Athens plays Russian card, eyes Turkish Stream

But on Saturday, the Russian president’s spokesman Dmitry Peskov said no such loan is planned.

“[Russian President Vladimir] Putin said himself during the media conference that nobody asked for our help. Naturally energy cooperation was discussed. Naturally, the parties of the high level talks agreed to work out all details of these issues at an expert level. Russia didn’t offer financial help because it was not asked,” the spokesman told the Russian radio station Business FM.

In the meantime, a recording emerged in which Greece warns of a “contagion effect” for world finances if his country is pushed out of the eurozone.

“Anyone who toys with the idea of cutting off bits of the eurozone hoping the rest will survive is playing with fire,” he told La Sexta, a Spanish TV channel, in an interview recorded 10 days ago.

“Some claim that the rest of Europe has been ringfenced from Greece and that the European Central Bank has tools at its disposal to amputate Greece, if need be, cauterise the wound and allow the rest of eurozone to carry on.”

“I very much doubt that that is the case. Not just because of Greece but for any part of the union,” he said, speaking in English.

“Once the idea enters peoples’ minds that monetary union is not forever, speculation begins […] who’s next? That question is the solvent of any monetary union. Sooner or later it’s going to start raising interest rates, political tensions, capital flight.”

His comments were recorded before those of Mario Draghi, the European Central Bank’s president, who this weekend said the eurozone was better equipped than it had been in the past to deal with a new Greek crisis but warned of uncharted waters if the situation deteriorates.

Greece’s leftist government is trying to negotiate a deal with its lenders from the European Union and the International Monetary Fund to unlock further aid under its €240 billion bailout.

Eurozone deputy finance ministers gave Athens last Thursday a deadline of six working days to present a revised economic reform plan. Eurozone finance ministers will meet on 24 April to decide whether to unlock emergency funding to keep Greece afloat.

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