Sunday, September 20, 2015

Greek-Iranian Emerging Relations in the Post-Sanctions Era, by Ioannis Michaletos

Greek-Iranian Emerging Relations in the Post-Sanctions Era: an Overview

Originally appeared in Balkanalysis, 12th September 2015

The Importance of Oil to the Bilateral Relationship

Oil remains a key sector where the lifting of sanctions will benefit the Greek-Iranian commercial relationship. Until 2012 and the start of renewed international sanctions on Teheran by the international community, including a hydrocarbons embargo, Greece was importing around 200,000 barrels of oil per day from Iran, being one of Iran’s best customers on a worldwide level.

The Greek refineries were importing the bulk of it, mainly due to the favorable open credit terms for up to six months that Iranian producers were providing, despite the “country risk” Greece was facing due to its mounting debt and the assorted problems that this entailed for the country.

The annual cost back in 2010-2012 for Greece was $5-6 billion paid to Iran, making this Mediterranean country of 11 million people one of the main suppliers of hard currency to Iran. The end of the Iranian imports and the demise of the Libyan production (which was happening at exactly the same time) forced Greek companies to increase supplies from Russia and Kazakhstan.

The past year has of course seen considerable turbulence in the price of oil globally which has numerous knock-on effects, diplomatically and commercially. But price fluctuation, while it can affect amounts, scale and profits, cannot by itself diminish the general importance of oil to the Greek relationship with Iran. In the strategic overview, the comeback of Iranian oil into the Greek market will be important.

Also, analysts should note that the semi-state company Hellenic Petroleum (ELPE) owes money to Iran, and at some point the latter will surely ask to be paid back: the total debt ELPE owes Iran is around 200 million euros.

This debt could not be repaid previously, because of the financial embargo. Thus it is absolutely sure that Iran will make a comeback in Greece, mainly centered around its very lucrative and important hydrocarbons export sector.

Other Expected Areas of Bilateral Trade

Greek companies producing agricultural supplements and products should do well in the post-sanctions era, since Iran is a big agricultural market. Also likely to benefit will be island resorts catering to rich Iranian tourists, plus jewelry and precious stones dealers. The tobacco industry, marble, aluminum, and the pharmaceutical corporations can also see growth in Iran, which has demand due to the long-time embargo to many types of medicine products.

A Long and Eventful Relationship

In addition, the two countries and cultures share a colorful history, dating back to ancient Greece’s famous “Persian Wars,” the conquest of Asia by Alexander the Great, the subsequent “Hellenistic period” in the Bactrian Kingdom and the continuous wars between the Greco-Roman world and the Persian Kingdoms between the 1st and 4th centuries AD.

Later on, the Eastern Roman Empire waged substantial campaigns in the Mesopotamia region against the Persian Kingdom. This series of wars ended abruptly when the followers of Mohammed conquered the then-Persia and cut off the Byzantines from them. For centuries thereafter relations between the Greek world and the Persian one was indirect, via trade and cultural exchange. This was facilitated by the Ottomans, who absorbed elements of Persian cuisine, architecture, vocabulary and culture, and brought them to Greece.

In modern times, a small Greek community, currently not more than 100 people, was formed by Greek refugees escaping from Kemalist Turkey back in the early 1920’s. Unable to return to Greece they settled in Teheran and built the “Resurrection Church” near the center of the city.

Relations were considered good during the period of the Shah, but during the Iran-Iraq war in the 1980’s, Athens supported Saddam Hussein’s war efforts, and bilateral diplomatic relations reached an historic low. However, from the mid-1990’s oil imports and commercial opportunities in the expanding Iranian market flourished. A new round of warm bilateral relations ensued, and at various occasions the Greek ministry of foreign affairs appeared to be attempting to mediate as an “honest broker” between Teheran and the international community, albeit with no tangible results.

Iranian Citizens in Greece during the Current Migrant Crisis

The current migration wave from the Middle East to Greece has brought more than 15,000 Iranian citizens into the country, most of them of Kurdish descent and traveling under illegal or semi-legal status.

On the other hand, some 2,000 Iranians reside legally in the country, many of them successful in trade and commerce. The impending lifting of sanctions has prompted Greece’s de facto national airline, Aegean Airlines, to start direct flights to Teheran, which has helped spur a new kind of “economic shuttle diplomacy” between prospective investors from the two states.

Greek Diplomatic Overtures to Iran during 2015

Further, throughout 2015 the Greek MFA actively tried to open up the Iranian market, while the first cousin of the recently-deposed Greek prime minister, named Giorgos Tsipras, tried unsuccessfully to request loans or credits from the Iranian national reserves.

Giorgos Tsipras was the general secretary of economic relations of the Greek MFA during his brother’s brief rule. The overture to Iran, which was also followed by a similar one to Venezuela, was part of Syriza’s failed strategy to exercise pressure on the EU and in particular Germany, regarding debt negotiations. This “multipolar participation” strategy represents a popular way of thinking among some of the academic-minded ‘experts’ who, for a few months at least, enjoyed some degree of political power.

Although this diplomacy was supposed to have been kept secret it was leaked to the media and also created negative attention. However, these overtures also had a subtle effect on Greek relations with Israel, which had been steadily forging closer ties with Athens during the governments of Samaras and his immediate predecessors. Greece’s new strategy to engage Iran thus has to take into account that Tel Aviv regards Iran as enemy-number-one, which in turn complicates the Greek-Israeli relationship.

The Hidden Side of Things: Projected Iranian Intelligence Activity in Greece

In security terms, the present cooperation between the two countries is at an almost non-existent level, a fact that most probably will change once all sanctions are lifted.

The reason to expect a closer security relationship is partly because Iran is a major transit zone for illegal migration flow that ends up in Greece via Turkey. Iran is as well as part of the famous Afghan heroin route towards the Balkans. Since both of these issues have both a national and EU importance for Greece, there are plenty of opportunities for police cooperation between the two states. In fact, it might be beneficial for certain European countries which do not want to risk their relationship with Israel to ‘outsource’ this liaison task to Greece- which is in any case the frontier country for the EU.

On the other hand, it is more than certain that Iran will be mostly interested in expanding its intelligence and counterintelligence reach in Greece. It will be keenly interested in increasing surveillance of the anti-regime Iranian diaspora community members who reside in Greece.

These number perhaps more than 500 people. In 2010, during repeated hunger strikes by anti-regime Iranian immigrants in Greece, surveillance of these people by the Iranian state apparatus was noted by Greek intelligence in Athens. In fact, this interference almost led to a diplomatic confrontation with the Greek side, but the issue was handled in discreetly and was defused.

Iran’s Future Ambitions: Protector of the Shia in Greece, and Beyond

Teheran is expected to be active in Athens not only diplomatically, commercially and for its own internal security purposes. Rather, it is increasingly clear that Teheran sees itself as the protector of not only the local Iranian community, but of all Shia adherents residing in Greece. This group in total possibly numbers more than 60,000 people.

Organizations such as the Pakistani Shia “Tehrik-e-Jafaria,” various Afghani Shia groups, Iraqi Shia, Lebanese, Yemenis, Indian and others are revolving their activities around the presence of Iran in Greece and the Balkans in general. In reality, Iran is not a nation-state, but a hub of a wider political-religion alliance which can be understood as the ‘Shia Axis,’ stretching from Latin America across to Indonesia, with more than 250 million adherents and allies.

Security Concerns about Iranian Affiliations in Greece

A WikiLeaks cable (November 2009, 09ATHENS1643-19) details a dialogue between then-Greek Public Order Minister Michalis Chrysohoidis and then-US Ambassador Daniel Speckhard. The Greek official claimed that the notorious Greek terrorist group “Revolutionary Struggle” had links with Iran, and that some of its members were traveling to Lebanon and Iran.

During that period, the Greek newspaper Proto Thema reported that Greek terrorists were being trained in Hezbollah camps in Lebanon, while back in 2007 US congressionally-funded research detailed that Hezbollah members are active in Athens and raise funds by tobacco smuggling. In January 2007 the US Embassy in Athens was hit by an RPG rocket launched by the Revolutionary Struggle group, which subsequently issued a proclamation. It concluded by expressing its support for Hezbollah’s struggle in Lebanon.

The Iranian bank “Saderat” has a branch in Athens which temporarily is closed for business due to international sanctions, regarding its possible financing of Hezbollah. However, it is almost certain that if sanctions are lifted this bank will be open for business again.

Unsurprisingly, Israeli interest in Iranian activities in Athens has been steadily increasingly in recent years, and it became more overt after the terrorist attack against the Israeli embassy in late 2014. However, a Greek terrorist group took responsibility for that attack.

The Soft Power Approach: International Organizations

Perhaps the main importance of Greece to Iran can be detected in the “soft power” approach that Teheran has established in Athens. In this period, an organization called the “Union of Muslim World Publishers” established its European headquarters in Athens. Iran opened it in Athens on October 25, 2012.

According to the public relations office of the Union of Muslim World Publishers, a ceremony was held October 2012 featuring Ali Zarei Najafdari, secretary general of the union, Mohammad Hussein Mozafari, Iran’s cultural attaché in Greece, and Mohammad Reza Pakravan, Iran’s cultural contact with Greece.

In his address, Najafdari asserted that the union will run representative headquarters in the five continents of the world, following the agreements reached in the general assembly of the union. He noted that given its legacy of being such a historical civilization, Greece was chosen by the union to host its headquarters in Europe. This was said to be a bid to cement cultural relations with the thinkers, publishers and elites in various fields in the region. He went on to say that new headquarters will open in various other regions in the world to expand the union’s expansion.

Iran also retains a state school for expatriates in Athens, state airlines offices, a state-sponsored cultural center, and a library which is very active, along with press agency staff. They also undertake a wide range of activities with Shia NGOs based in Greece.

Conclusion: Positive Economic and Diplomatic Relations Expected

Despite these overtures, Iran’s presence is not likely to be considered threatening to Greek society. In fact, the estimate is that once sanctions are lifted energy trade and the general business climate will boom between the two countries, and secondary sectors such as tourism will be augmented as well.

Security and in particular police collaboration will also flourish. Positive relations between Greece and Iran are likely to cause consternation in several world capitals, but it could possibly benefit the Greek state security apparatus- which would be seen as suddenly more important to cooperate with by countries fearful of Iran.

In wider geostrategic terms, though, few problematic developments should be expected; stable relations will develop with no real diplomatic changes of balance.