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Greek default may shake EU, not Russia - analysts

Greek default, should it become a reality, and the country's ensuing walkout from the euro area are unlikely to cause a heavy impact on the Russian economy, but will surely deal a hard blow on the exchange rate of the euro and the integrity of the European Union, polled experts have told TASS.

The tensions over Greece's debt to the EU and the International Monetary Fund, currently standing at a mammoth sum of 240 billion, are white-hot. The EU's bailout program for Greece expired Monday midnight. Today, Greece may declare a default. Earlier, Prime Minister Alexis Tsipras declared that on July 5 the Greeks would vote in a referendum on the Eurogroup's lending terms, which the Athens regards as unfair.

Russian presidential press-secretary Dmitry Peskov said on Tuesday: "As before, we keep a close watch on the situation, but this is a question of Greece and its lenders above all." He declined to comment on Russia's attitude to the idea of extending financial assistance to Greece through the banks of the BRICS member-states, which are holding a summit meeting in Ufa next week.

Crisis and politics

"The financial crisis in Greece is an effect of the economic and budget crisis in the European Union. The EU was created amid abundant liquidity. That money is now gone," the head of the Neocon consultancy, Mikhail Khazin, told TASS.

"The European elites are losing the struggle with their own people, which is well seen in the emergence of Europe's counter-elites, as represented by Hungary's Viktor Orban, Greece's Alexis Tsipras, France's Marine Le Pen, Italy's Lega Nord (Northern League) party and so on and so forth. The European Union's counter-elites are reluctant to bow to dictating by the United States, which hopes to use a trans-Atlantic cooperation agreement to convert the EU into its own market," Khazin believes.

"The United States is keen to keep Russia, China and Turkey away from the European market. Washington's purpose is to sever energy ties between Russia and the EU, to prevent the laying of the Turkish Stream gas pipeline to Europe across Greece and to compel Europe to import hydrocarbons from the United States," Khazin said.

"Russia, China and Turkey will surely help save the crisis-stricken Greek economy. China alone will be able to inject hundreds of billions of dollars into Greece, whose port of Pyraeus alone makes the effort worthwhile. Should Greece leave the euro area, the situation in the European Union will get much worse. Such a shock may even cause the EU to collapse," Khazin warns.

Crisis and economics

The deputy chairman of Vneshekonombank's board, Andrey Klepach, is in no mood of over-exaggerating the significance of the Greek crisis.

"The European Union is capable of localizing it. Greece's expected default will cause adverse effects on the exchange rate of the euro," he believes.

"For Russia, the Greek default may be worrisome only from the standpoint of its European energy markets, and only in a very short term. It is important to see how the Greek affair will be evolving," Klepach told TASS.

The president of the Association of Russian Banks, Garegin Tosunian, believes that the European Union will not permit a default in Greece, because no one would benefit from it.

"Even if the default becomes a reality and Greece leaves the euro area, it will not spell disaster for the EU. True, the European Union may suffer some reputational losses, but these costs will pale into insignificance against the backdrop of a major threat to the exchange rate of the euro, which through the fault of the Greek crisis has been falling against the world's other currencies," Tosunian told TASS.

"The Greek default is unlikely to have any tangible effect on the Russian economy. Short-term fluctuations of the rouble's exchange rate are possible, but not to a very serious extent. Russian tourists will be the hardest-hit. Banks in Greece are in turmoil and travelers cannot be certain if there will be enough cash for them in the ATMs or if they can feel safe to make cash transfers to other countries. I believe, these are temporary problems," he remarks.

"The Greek crisis has shown that in a globalized world all political and economic alliances have their own problems. It is essential to avoid putting spokes in others' wheels and to extend a helping hand to each other to address the arising problems," Tosunian said.

[Source: By Tamara Zamyatina, Itar Tass, Moscow, 30Jun15]

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