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Pipeline to Revive Greek Economy

Pipeline to Revive Greek Economy
The struggling Greek economy may get a boost from oil and gas pipeline projects with Russia, Prime Minister Vladimir Putin and his Greek counterpart said Tuesday, signaling a new urgency for the projects to start up.

Putin Says Pipeline to Revive Greek Economy.

The struggling Greek economy may get a boost from oil and gas pipeline projects with Russia, Prime Minister Vladimir Putin and his Greek counterpart said Tuesday, signaling a new urgency for the projects to start up.

Moscow and Athens vowed to achieve progress with the Burgas-Alexandroupolis oil pipeline in the near future, even as Bulgaria, another partner in the plan, has suspended its participation for additional scrutiny.

Tuesday's statements showed that Russia still counted on building the Balkan line despite being discouraged by Bulgaria, which prompted the government in Moscow to seek joining an alternative pipeline, through Turkey.

?We have a mutual desire to do so,? Greek Prime Minister George Papandreou said at a joint news conference with Putin after they held talks. ?I don't see any major obstacles for us to move on more dynamically.?

The pipeline ? from Bulgaria's Black Sea coast to Greece's Aegean Sea coast ? would take oil around the dangerously congested Bosporus straits.

Sofia took a timeout last summer to study the environmental impact of the proposed construction after a new government took office. Energy Minister Sergei Shmatko said at the end of last year that Bulgaria also questioned its financial gains from the deal.

Greece has a newfound motive to speed up the project:its troubled government finances that have become a headache for the entire European Union. Papandreou suggested that work on the pipelines would revitalize the economy.

?The difficult situation will foster their implementation as soon as possible,? he said.

He said Monday, before the visit, that construction might begin within half a year, RIA-Novosti reported from Athens.

Putin said large projects are a tool to overcome crises. In the case of Greece, they would also attract the desperately needed investment from the global financial market, he suggested.

?There's enough money for this type of projects,? Putin said. ?There would be absolutely no problems with funding them.?

Moscow's support for the Turkey route around the Bosporus leaves a question of which of the two pipelines will materialize or have an economic sense. Both compete for the same Russian and Kazakh oil that will be sufficient to fill just one of them to capacity, said Alexei Kokin, an oil analyst at Metropol.

Russia and Turkey agreed to step up their efforts to build the $2.5 billion Samsun-Ceyhan pipeline at a meeting between Putin and his Turkish counterpart Recep Tayyip Erdogan last month. Currently, Turkey's private company Calik Energy and Italy's state-controlled Eni are partners in the project through a 50-50 joint venture.

Moscow, which had previously snubbed Samsun-Ceyhan, would clearly prefer the Balkan option, largely for reasons of diversification, Kokin said, pointing out that Turkey also controls the Bosporus straits. The Balkan route is also shorter and cheaper to construct, he said.

The South Stream pipeline ? for Russian gas to travel to Europe under the Black Sea ? is a more distant prospect, but with the same kind of uncertainty from Bulgaria. Papandreou said Tuesday that Greece was ready to set up a joint company with Gazprom to design the country's stretch of the gas line.

Gazprom chief Alexei Miller met Bulgaria's president and prime minister Tuesday, but a statement from the world's largest gas company didn't appear to indicate that he secured positive backing from the country's government.

The sides only agreed that the immediate goals included a feasibility study for the Bulgarian leg and creation of a joint venture to do the design, Gazprom stated. Miller and his counterparts also proclaimed the importance of the new route for Europe's energy security, the company said.

The South Stream would bypass Ukraine, the transit country that engaged in frequent gas trade disputes with Russia, which often prompted supply disruptions westward.

?Putin also played down Greece's economic troubles on Tuesday, telling Papandreou that the United States was no better than Greece in handling its debt and fiscal deficit.

"As we all know, the global economic crisis started neither in Greece, nor in Russia, nor in Europe," Putin said, Reuters reported. "It came to us from across the ocean," he said, referring to the United States.

"[In the United States] we can see similar problems ? massive external debt, budget deficit," Putin added. The U.S. Congressional Budget Office projects U.S. debt to hit 60 percent of gross domestic product at the end of 2010, while Greece's debt has reached 112.6 percent of GDP.


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