Russia and Greece Reach New Gas Deal

Greece could not reach a debt deal with its creditors, so it went to Russia. Greece has signed a controversial deal with Russia involving gas. The country still can stave off financial collapse with a meeting on Monday with leader of Europe, but Greece wanted others to see it has other options as well.

On Friday, officials agreed to construct a pipeline that would bring Russian gas into Greece and through to other parts of western Europe, reported the state media in Russia.

Alexander Novak the energy minister in Russia said the new deal took the relationship between both countries to another level.

Greece and Russia already have deep ties from the Orthodox Church and culture to commerce. Tourists from Russia visit in larger numbers each year. However, the two countries have become even closer since the Greeks voted Syriz the left wing part into power this year.

The new gas agreement will likely irritate the other countries in the European Union, who have restricted trade with the Russians due to the crisis in Ukraine and are attempting to reduce their dependence on gas from Russia.

Talks between the other governments in Europe and Greece over the debt crisis have grown acrimonious. A meeting Thursday of finance ministers ended with little progress and time is coming to an end.

Many doubt that Greece will find a way to pay its bills during the upcoming few weeks and it has refused to bow to the demand for more economic reforms from creditors.

According to a report out of Russia, the new pipelined for gas, which will be bypassing Ukraine, will cost close to 2 billion euros or approximately $2.3 billion and will be completed during 2019. All cost of the pipeline will be paid by Russia, with an understanding Greece will pay its share of the costs later.

Russia might offer discounted gas to Greece and Greece could earn revenue from transmission fees for the gas.

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