Crisis-hit Greek PM pledges deeper ties with Russia

(MOSCOW) - Greek Prime Minister George Papandreou, whose country is fighting an unprecedented debt crisis, pledged Tuesday to deepen ties to Russia as he met its leaders in Moscow, who made no specific offers of assistance.

"Rest assured that our goal will be to further deepen our relations," Papandreou during talks with President Dmitry Medvedev.

Papandreou is under pressure to get Greece's finances in order amid warnings from trade unions that the country may be nearing breaking point.

The country's ballooning public deficit has driven up the total debt to about 300 billion euros (408 million dollars), or 113 percent of GDP, nearly double the 60 percent eurozone limit.

Both Medvedev and Russian Prime Minister Vladimir Putin pledged to deepen economic ties with Greece but neither said Moscow was ready to help Athens weather the crisis.

"As far as Greece's current economic difficulties are concerned, we know about them," Putin said after the talks with Papandreou. "Of course there's nothing good about it but we believe they can be overcome," he said.

Putin's spokesman, speaking before the talks, said Greece had not asked Russia for financial support and that Russia also had no plans to raise the subject.

"But if the Greek colleagues raise the issue, we will discuss it," the spokesman Dmitry Peskov told AFP.

Following his talks with the Greek premier, Medvedev also gave little indication as to whether Russia would throw a lifeline to the indebted country.

Meeting with World Bank president Robert Zoellick earlier Tuesday, Medvedev said he had recommended that Papandreou to turn to the World Bank and the International Monetary Fund for help.

Zoellick said he had asked Russian Finance Minister Alexei Kudrin whether he was going to meet the Greek premier too, quipping: "You never know who is going to ask for money."

In an interview with the Russian news agency ITAR-TASS in Athens, the Greek premier said ahead of the visit his country would offer to promote the South Stream, one of Putin's pet projects, within Europe.

"With an aim of promoting the construction of the pipeline, Greece will turn to European bodies together with other European countries through which the pipeline will run so that it becomes part of the trans-European network," Papandreou was quoted as saying.

That statement led some observers in Russia to believe that Papandreou was seeking to convert his promotion of the South Stream within Europe into some financial help from Russia.

Both Putin and Papandreou pledged that Greece's financial problems would not get in the way of the South Stream gas pipeline, which will carry Russian gas to Europe through the Balkans, avoiding its neighbour Ukraine.

"I believe that we will emerge stronger out of this situation," Papandreou said.

"There are no problems with financing whatsoever," Putin added, noting that at least "ten European countries" were interested in the project.

In 2008, Russia offered a 500-million-dollar loan to Iceland to help it out of its deep economic crisis but the promise was withdrawn amid an increasingly tight budget situation in Moscow.

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