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Russia denies report of €5B pipeline deal with Greece

Debt-stricken Greece, which faces mounting bills, is searching for a solution to its cash crisis.

By Doug G. Ware
The cash-strapped Greek government is reportedly seeking financial assistance from Russia, involving a planned natural gas pipeline called Turkish Stream. Photo: UPI/Hugo Philpott
The cash-strapped Greek government is reportedly seeking financial assistance from Russia, involving a planned natural gas pipeline called Turkish Stream. Photo: UPI/Hugo Philpott | License Photo

MOSCOW, April 18 (UPI) -- After a similar natural gas transportation system was taken off the table in December, the Russian government is said to have promised debt-stricken Greece 5 billion euros in advance of a new pipeline to help deliver gas to Europe -- a reported deal Moscow denies.

Word of Russian financial help comes as the cash-strapped Greek government faces hefty bills to the International Monetary Fund and other organizations -- including a due amount of nearly a billion euros next month. Last week, Athens made a 450 million euro loan payment to the IMF.

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Germany's Der Spiegel reported Saturday that Russia's payment of three to five billion euros to Greece would be an advance on returns from the Turkish Stream pipeline -- which will reportedly provide Moscow with transit fees in the future.

Russian government spokesman Dmitry Peskov, however, denied his government is offering such a deal, Britain's The Telegraph reported.

Earlier this month, Greek Prime Minister Alexis Tsipras visited with Russian President Vladimir Putin in Moscow in a trip many believed was intended to broker financial assistance for the Mediterranean nation.

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If reports of the deal are true, a Greek government official was quoted by Der Spiegel saying it can "turn the tide" regarding the country's financial troubles. The deal might be signed as early as Tuesday, the report said.

"I'm happy for Greece if it's so. I hope it is," German Finance Minister Wolfgang Schäuble said. "Anything that helps Greece is good."

Greece isn't only seeking money from Russia. China purchased 100 million euros worth of short-term government bonds last week, the Telegraph report said. Greece is hoping for billions more from China as part of the privatization of the port of Piraeus.

In December, Russian officials scrapped a similar seven-year-old gas pipeline project called South Stream. In its place, to help meet Europe's natural gas needs, officials proposed Turkish Stream.

"We expect it to be realized and help enhance Europe's energy security, therefore freeing it from problem transit states," Russian Foreign Minister Sergei Lavrov said in January.

Russia meets about a quarter of the natural gas needs for the European economy. The majority of that runs through the Soviet-era transit network in Ukraine, where lingering debt issues and ongoing conflict present risks to traditional energy routes.

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The Turkish Stream is expected to go into operation in 2019.

Daniel J. Graeber contributed to this report

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