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Greece: how important it is to be reliable partner

Oil&Gas Materials 1 July 2015 00:01 (UTC +04:00)
Relatively not a long time ago, one could hardly believe it: a European country is on the verge of bankruptcy. It is unlikely that the founders of the European Union were building a community one of the members of which could end up in such a position, but the fact remains.
Greece: how important it is to be reliable partner

Baku, Azerbaijan, June 30

By Maksim Tsurkov - Trend:

Relatively not a long time ago, one could hardly believe it: a European country is on the verge of bankruptcy. It is unlikely that the founders of the European Union were building a community one of the members of which could end up in such a position, but the fact remains.

Today, June 30, should have become crucial for new modern Greece. The country, which was facing economic default, could prolong its agony by paying a tranche worth $1.6 billion to the International Monetary Fund. In this situation, lenders would see the light at the end of the tunnel, and could concede to Athens and extend the program of financial assistance from the EU and the IMF, which also expires today.

However, the Greek Finance Minister Yanis Varoufakis said that the country will not be able to pay this amount either, which is in fact tantamount to a declaration of its bankruptcy. Hopes for reaching an agreement with creditors to extend the program, without which nobody will give money to Athens, are fading away with each passing hour.

It turns out that the new government, which took office in January against the background of promises to save Greece, could cope with the situation. Populist slogans and statements of leftist forces were supported by the Greek people, but absolutely did not work in practice, and it should not be surprising.

From the very first days, Tsipras' government chose a policy of uncertainty and getting dividends even with respect to projects approved and adopted by the previous government, and showed itself as not a completely reliable partner.

It is about both SOCAR's purchasing 66-percent share in Greek DESFA natural gas transmission system operator and Greece's participation in the Southern Gas Corridor project that is being implemented on Azerbaijan's initiative.

Naturally, it is hard to imagine that Greece could repay its debt worth over 300 billion euros in one fell swoop. The deal worth 400 million euros is currently being considered by European Commission's Directorate-General for Competition and even these funds would be helpful to the Athens.

However, even in this situation, Greek Prime Minister Alexis Tsipras contrived to say that the Greek government is thinking over maintaining a 51 percent share in the gas operator. However, it is another deal with a different cost.

The similar situation can be observed in the Southern Gas Corridor project, to be more precisely, in its TAP segment. Greek side first expressed its commitment to the reached agreements, but then hinted that it would like to get more benefits from using it, despite the fact that the project has great financial indicators. Greece will earn from the construction, transit, will be able to use the inlet gas, employ tens of thousands of citizens and foreign investments will be made in the country.

However, by behaving this way, Greece loses not only time and money, but also the credibility of its partners, investors, current and future creditors.

Possibly, by choosing the opposite model of behavior, Greece wouldn't have spoiled the image of a reliable partner and the creditors wouldn't have turned their back on it. But that's another story...

Edited by CN

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Maksim Tsurkov is Trend Agency's staff journalist, follow him on Twitter: @MaksimTsurkov

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