Trump’s Iran Move May Swamp Greece

https://www.nytimes.com/2018/05/18/opinion/trump-iran-deal-greece.html

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After eight years of being kept afloat by loans from its European Union partners and the International Monetary Fund, Greece suddenly risks being swamped by waves caused by President Trump’s unilateral stirring of the Middle East’s caldron of tensions and conflicting interests.

Compared with the immediate danger of regional conflict and even greater bloodshed, the danger to Greece may seem secondary, but it illustrates the unforeseen consequences of impetuous American actions.

Washington’s withdrawal from the nuclear deal with Iran and its decision to move its embassy in Israel to Jerusalem could trigger a chain of events that would jeopardize Greece’s fragile economic recovery. With the last of three international bailout agreements set to end in August, the government has been pressing the message that Greece will soon be a “normal” country, able to hold its own in the international economy. Turbulence in the region would create new threats to its economy, its security, even its relations with its key partners — the United States and the European Union.

Greece already has problems with neighboring Turkey. President Recep Tayyip Erdogan is campaigning for re-election in snap polls on June 24 and has invested in stoking nationalist fervor — primarily against Kurds in Syria, Turkey and Iraq, but also against the United States and Greece.

Ankara’s worsening relations with Washington and European capitals over a host of issues have led to more pressure on Greece: a sharp increase of immigrants and refugees crossing from Turkey in recent months, the ongoing detention in Turkey of two Greek soldiers who strayed across the border in early March and a series of confrontational military actions by Turkey. These all highlight the dangers that Greece faces as the European Union’s frontier state in a turbulent region.

Mr. Erdogan presents himself as the victim of an attempted coup, allegedly by a United States-based former ally, Fethullah Gulen, and as the champion of Muslims everywhere, including the Palestinians. Lately, in the region’s fluid network of rivalries and alliances, Turkey, a NATO member, has cultivated closer ties with Russia and Iran while chafing against American constraints on its occupation of part of northern Syria. The drawing of battle lines over Mr. Trump’s recent actions could lead to greater tension among Turkey, the United States and Israel.

Meanwhile, Greece’s relations with the United States and Israel have never been better. The U.S. ambassador to Greece, Geoffrey Pyatt, refers to the country as a pillar of stability in the region and U.S. officials make use of important air and naval facilities at the Souda Bay military base on Crete. The leaders of Greece, Cyprus and Israel held their latest trilateral meeting just last week, focusing on energy issues. Greece’s increased strategic value could work in its favor, as the country seeks American and European backing to keep Turkey in check and to help its own economic revival. However, the more Washington and Brussels lose leverage with Ankara, and the more unilaterally Turkey acts, the greater the risks for Athens.

For Prime Minister Alexis Tsipras, whose radical left-wing Syriza party is in a coalition with the far-right nationalist Independent Greeks, closer relations with the United States and Israel at this time could also create domestic complications. If the United States and Israel become embroiled in further bloodshed, such as that which attended the opening ceremony of the American Embassy in Jerusalem, the government will not want to appear too close to them. Several leftist groups are keen to prove they have greater “anti-imperialist” credentials than Syriza. Last month, after the United States, Britain and France carried out missile strikes against Syria in response to the regime’s alleged use of chemical weapons, Communist Party demonstrators in Athens tried to pull down a statue of Harry Truman.

Even more ominous than the tension with Turkey is the possibility that Mr. Trump’s policy on Iran and Israel could drive a wedge between the United States and the European Union, especially if American officials carry out their threat to impose sanctions against European companies doing business with Tehran.

Athens would then face difficult and dangerous choices. Greece, a NATO member, has relied on the United States as its major ally since 1947, when Washington, through the Truman Doctrine, helped the government win a civil war against Communist forces.

But Greece is also a member of the European Union. Its partners in Europe pledged most of the 326 billion euros that, in three bailouts since 2010, have kept the country from bankruptcy. The United States has contributed only through its share of the 32.1 billion euros that the International Monetary Fund lent Greece.

Greece’s economic recovery depends on negotiating with its European partners a reduction of its public debt (318.3 billion euros last year), so Athens cannot afford to isolate itself in Europe by taking the United States’ side in any major dispute. But neither can it depend on the European Union’s nascent defense capability in an increasingly unstable region.

This instability is the greatest immediate threat. Greece needs high growth and an annual primary surplus of 3.5 percent until 2022 to meet conditions set by its creditors in exchange for any debt write-down. And the economy’s viability will depend on the size of this reduction. Any significant rise in oil prices, skittishness in the markets and regional security fears that could keep tourists and investors away would undermine the recovery effort. The country is heavily dependent on tourism, which last year contributed 10.3 percent of G.D.P. (18.3 billion euros).

The bailout may be ending and the government may be declaring that it does not need an emergency credit line after August, but after eight years of austerity, reforms and sacrifices, Greece is clearly not out of trouble. And factors beyond its control could soon determine its immediate future.