ECONOMY

The Russians are coming

The US State Department spokesman’s written statement last Thursday, which expressed US support for the Burgas-Alexandroupolis oil pipeline project that is to convey Russian oil, put paid to persistent rumors about American opposition to this particular project. In any case, Russian oil could reach and does reach Europe by ship from the port of Novorossiysk via the Bosporus; moreover, US oil major ChevronTexaco will participate in the pipeline project. There are, however, serious US objections to the transfer of Russian gas via a pipeline that is to start in Turkey, cross Greece and end in Italy. This is an independent project whose implementation has barely begun. We should also note that neither is the European Union happy to be dependent on Russian energy sources. It is for this reason that a special meeting of European energy groups is taking place this week, obviously to prevent Russia from becoming a monopoly source of energy. The heart of the matter is that Russia is transforming itself from the West’s major military adversary into a very powerful trade partner. Investments by Russian companies abroad are rapidly increasing; in the first quarter of 2006 alone, they increased 50 percent, compared to the same period in 2005. This trend can also be felt in Greece, where Russian firm Sistema acquired Intracom Telecom. There are also rumors that oil giant Lukoil is negotiating a shareholding in Greek refiner Motor Oil. Greek companies are also active in the Russian market, especially through food exports and in the transport and tourism sectors. It is estimated that about 50 Greek companies are active in the Russian market. Russia is also among the top 15 destinations for Greek exports. Despite the recent big increase in bilateral trade, state officials say that Greek investments in Russia «are still low and, in any case, below the expectations of the Russian market.» At present, the biggest Greek investor in Russia is Coca-Cola Hellenic Bottling Company (HBC) which operates 14 bottling plants. Last year it acquired, jointly with The Coca-Cola Company, Multon, one of the top Russian juice makers, for 360 million euros. The following articles show clearly that, under President Vladimir Putin, Russia is clearly trying to buy political influence with the riches it is accumulating through energy exports. The upward spike of oil prices has played a decisive role in the Russian economic boom; in turn, the oil price rise is, partly, the result of the radicalization of the Islamic world and instability in the Middle East, situations Russia has not done anything to shape. Putin is simply taking advantage of the fluid global situation. At this juncture, through its limited means, Greece is trying to take advantage of Russia’s newfound strength in order to advance its own economic interests without seeking to alienate its traditional allies.