Following a phone conversation between Greek Prime Minister Alexis Tsipras and Russian Deputy Finance Minister Sergei Storchak on May 11, the latter invited Greece tobecome the sixth member ofthe New Development Bank of BRICS countries.
“The Prime Minister thanked Storchak and said he was pleasantly surprised bythe invitation forGreece tobe the sixth member ofthe BRICS Development Bank. Tsipras said Greece is interested inthe offer, and promised tothoroughly examine it. He will have a chance todiscuss the invitation withthe other BRICS leader duringthe 2015 International Economic Forum inSt. Petersburg on June 18-20,” SYRIZA said in an e-mailed statement.
Storchak is a representative ofthe BRICS Bank which is now being established. The newly appointed chief ofthe bank is Kundapur Vaman Kamath, the former non-executive chairman ofICIC Bank, India’s second largest bank.
Russia, which faces Western sanctions over the Ukrainian conflict, hopes the new bank will challenge the two major Western-led institutions, the World Bank and the International Monetary Fund (IMF).
For its part, Greece is struggling to repay its multibillion euro debt to the troika of international lenders – the IMF, the European Central Bank (ECB) and the European Commission.
Natalya Orlova, chief economist at Russia’s Alfa Bank, toldNew Europe on May 12 that the decision to invite Greece to join the BRICS bank is political. “I don’t see any economic reason why this should happen. I think it’s more political step,” Orlova said, adding that Russia wants “to challenge the EU, the only instrument of the only structure where Greece can participate”.
Meanwhile, Moscow and Athens have been strengthening economic cooperation. Greece’s government has agreed a number of strategic deals with Russia during Tsipras’ visit to Moscow in April, including participation in the TurkishStreamproject that will deliver Russian gas to Europe via Greece. Tsipras and Russian President Vladimir Putin discussed further the natural gas pipeline across Greek territory on May 7. Putin told Tsipras by phone Russia is ready to consider providing finance to Greek companies that will participate in the construction of the gas pipeline continuing the Turkish Stream.
See also: Putin offers Greece pipeline financing help
On July 15, 2014, inFortaleza, Brazil, the BRICS member countries signed an agreement toestablish the $100 billion New Development Bank, formerly referred toas the BRICS bank, and a reserve currency pool set at $100 billion. Russia will contribute $18 billion tothe pool, alongwith India and Brazil. China is expected tocontribute the largest share of $41 billion, withSouth Africa chipping inthe remaining $5 billion.
The bank is expected tobe one ofthe largest financial institutions tofund various infrastructure projects inthe BRICS countries and emerging economies.
Orlova told New Europe that there is an attempt to deepen the cooperation between Russia and China. “At least from the Russian side this is the most important change over the last six months,” Orlova said. “Now I’m not sure these projects imply that there will be a new Asian-style IMF which will emerge.
My impression is China will focus on financing the projects which are economically interesting for China. This can be done through the BRICS structures or this can be done via Chinese structures, but in terms of Russia’s role and Russia’s participation it’s all about the country’s willingness to receive Chinese investments,” the Alfa Bank economist noted.
http://www.neurope.eu/article/russia-invites-greece-to-join-brics-bank/