Greece has a $360 billion debt bill due this month and needs help. The European Central Bank (read: Germany) just made paying that debt harder for Athens, and the time bomb is ticking.
Russia Today’s Max Keiser has a solution though: the debt-hobbled Greece should go to debt-hobbled Russia for support. Here’s how he outlined the plan on the February 3 Keiser Report:
It’s hard to see how Russia has anyone’s financial back, though, given its own debt problems. The ruble lost nearly half its value last year, and S&P recently downgraded Russian debt to junk status. Offering Russia as a viable creditor without even mentioning the country’s own problems is a serious case of looking at things through rose-tinted glasses.
It’s true that Russia has a remarkably low debt-to-GDP ratio (around 12 percent), but that comes from two factors:
- Russia defaulted on its debt in 1998, so no one wants to lend to Russia in the first place
- While Russia’s public debt is technically low, much of the lending the government relies on passes through nominally private entities like oil giant Gazprom that are actually state-owned. The government has a controlling interest in publicly traded Gazprom (which faces difficulty paying its own massive debt with gas prices the lowest they’ve been since the credit crisis).
Still, Keiser isn’t alone in promoting the idea on RT and in the broader world of European diplomacy. But for what it’s worth, newly elected Greek Prime Minister Alexis Tsipras seemed to close down the Russian Option, saying “Right now, there are no other thoughts on the table.”