The Greek Crisis: Why Russia Doesn't Matter

"If the Greeks ask for a loan then we will consider it, but they have not yet asked," Russian President Vladimir Putin's spokesperson, Dmitry Peskov, told the AP.

Greek Prime Minister Alexis Tsipras is in Russia now, triggering speculation that he is looking to his Eastern neighbor for help, as his nation struggles to extract loans needed to avoid bankruptcy from its regular creditors. The topic wasn't on the agenda when the two heads of state met, according to the AP, but Russian officials are still open to an arrangement.

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Rumors Abound

Speculation Stirring

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Benzinga spoke with Joe Brusuelas, chief economist for McGladrey LLP, about the possibility of Russian aid to Greece.

Fool's Gold

Indeed, Russia's $2 trillion economy pales in comparison to the European Union, which boasts a collective GDP of more than $18 trillion. Moscow, furthermore, is in the midst of mutually imposed sanctions with much of Western Europe and the United States. The country, teetering on the edge of recession of its own, would likely struggle to extend any meaningful amount of aid to the Greeks.

Brusuelas, therefore, posits that Russian aid to Greece would represent more of "an old-fashioned quid pro quo" than an effort to solve the nation's financial problems.

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The two countries signed an agreement on Friday to allow Russia to build an extension on a prospective gas pipeline that would carry Russian gas through Turkey to Europe. Brusuelas thinks that Russian credit could just be a bargaining chip to buy Greek cooperation with the pipeline project. On a higher level, a closer partnership with Greece could allow Russia an opportunity to wedge itself into Western European affairs.

Brusuelas says that Tsipras, knowing Russia isn't in a financial position to relieve Greece from its turmoil, is instead "trying to play the [political] dimension as a way to leverage bargaining power with the [EU]." However, "such signaling is counterproductive," as Brusuelas doubts either Brussels or Washington will fall for the ploy.

He notes, furthermore, that even if Russia did want to help Greece, buying up significant amounts of Greek debt now would be a curious move. Greece will likely soon have to impose financial regulations to restrict capital outflows, he says, meaning that Russia would essentially by giving Greece money that it would not legally be able to return.

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The Real Stakes

Brusuelas calls the speculation of Russian aid to Greece a mere "sideshow" – a distraction from more pressing questions about the country's short-term financial solvency.

He highlights the fact that capital outflows have been picking up as the Greek bank run has been accelerating in recent weeks. The situation has deteriorated to the point where Greek banks may be unable to open their doors Monday morning, which could lead to a rapid escalation of the country's financial crisis.

According to Brusuelas, the question of whether or not the Troika can overcome politics to keep the Greek economy afloat is what observers should be focusing on instead of Russia.

He expects EU players to cave and extend the necessary aid sometime on Sunday.

Looking forward, Brusuelas sees mid-July as the real "drop-dead point" for the Greek crisis. On July 19 and 20, Greece will owe the European Central Bank €3.2 billion. If Syriza officials fail to reach an agreement with creditors by then, default would be just around the corner.