Friday, August 28, 2015

Chapter 7. Moscow. Fast Money and French Ladies.

Chapter 7. Moscow

The energy minister sat in his chair with his back to the window, which was filled with the stark silhouette of the Kremlin just across the square. He was in a sour mood. He’d just come back from President Putin’s office. His two underlings cringed in their chairs across from the desk, cowering lapdogs waiting for the next snarl.

“The president expressed his displeasure …with me…his most loyal ally…he asks, where is the money from the Europeans? Of course you can’t tell him the truth…buried in the steppes of the Ukraine…I tried to change the subject by saying that the Chinese gas deal was one of the biggest in history…and he says ‘Yes, money for my successor.’”

“That’s true,” said one of the underlings, “my comrade at the central bank says the foreign exchange reserves are plummeting.”

“Yes, that sank the pipeline deal to Bulgaria,” said the energy minister with anger in his voice. “One of my great accomplishments…so much potential…so few bribes…the Bulgarians squeaked when they left the conference room…”

“There will be more opportunities in the future,” said the other underling. “In fact, the Greek energy minister is outside waiting for our meeting.”

“Again?” said the energy minister. “Doesn’t he ever go away?”

“He has a deep commitment to Communist ideals,” said the underling.

“And no cash,” said the energy minister. He recalled the last visit to Moscow by Lafazanis and the young Alexis Tsipras—a mere boy, thought the energy minister—when they wanted a ten billion euro loan from Russia. As if dogs were going to start flying.

“Possibly we will discuss financing today?” said the underling. Trying to put a helpful tone to his comment, he added, “Possibly some financing from the Europeans…”

The energy minister scowled at him like he was idiot child. “The Europeans?” he asked.

“Uh huh, shall I get the Greek minister?” said the underling trying to slide away from the harsh glare of disapproval. It all rolled downhill in modern Russia, thought the underling, starting from President Putin.

“Show him in,” said the energy minister and he stood up as one of the underlings went to the door and opened it. The Greek energy minister Panayotis Lafazanis, dark haired and lightly bearded, came through the door and shook hands all around. He took a seat across from the Russian energy minister.

“We have a great opportunity to liberate Greece from the capitalist tyranny imposed from Berlin and Brussels,” said Lafazanis, opening with a burst of enthusiasm.

“How would it work?” asked the energy minister, wariness crossing his face.

“Russia would simply reroute the Bulgarian pipeline across the Black Sea to Turkey and then on to Greece,” said the Greek energy minister. “Here, I have a complete proposal,” and the Greek handed a document across to the Russian, who in turn pushed it over to one of the underlings.

“Costs?” asked the Russian minister.

“About two billion euros,” said the Greek.

“Reasonable,” said the Russian noncommittally.

“I can guarantee the Public Power Corporation of Greece will take a lot of the gas. It holds a near-monopoly of the Greek electricity market.” Lafazanis was the utilities’ long-time political patron; he controlled the utility workers’ union.

“Let’s say I initial the proposal today,” said the Russian energy minister, “pending securing the financing, of course. Where do we go from here?”

“Well, first, once the deal is signed off, Greece would like a five billion prepayment of gas transit fees,” said the Greek minister excitedly as he watched the Russian nod in understanding approval.

“Yes, that would be a small price to pay,” said the Russian. “That would put Russia in a strong position in the South Europe energy market.”

“Unlock the market,” said the Greek. “But there is a much larger opportunity…”

“A larger opportunity?” asked the Russian.

“Yes, as you know, the Greek people are voting on a referendum this Sunday…”

“Yes, but my understanding—correct me if I’m wrong—is that Europe says it’s a vote to leave the euro.”

“Yes, exactly…and the Greek people are posed to give the referendum overwhelming support and vote against more austerity from Brussels and Berlin…my faction of the Syriza party—the Left Platform—will then be able to create a government that will lead Greece out of the euro and back to the drachma and we can reassert state control over the economy…where it belongs.”

“President Putin would never allow me to comment on anything political, but wouldn’t there be large costs involved in rejecting a European bailout package?”

“That is the beauty of the moment,” said Lafazanis. “With only five to ten billion in backing from President Putin, we could put the Grexit plan in effect…possibly beginning in as little as two weeks’ time.”

“Yes, an interesting proposal,” said the energy minister. “Many in Moscow have long admired your personal devotion to Marxist principles against the Brussels neoliberalism and the mercantile orthodoxy of Berlin. The president has expressed that to me personally.”

“When we get word from Moscow,” said Lafazanis, “we of the Left will lead a government that will move on the Greek central bank and financial institutions…mobilize the hidden wealth of Greece for the benefit of the Greek people.”

“I will personally take your proposal to President Putin,” said the energy minister as he stood up and shook the Greek energy minister’s hand. “My aides will show you the way out.”

The Russian energy minister sat back down and gnawed on his knuckles. Soon his aides came back in and sat down.

“Maybe President Putin is trying to trick me,” said the energy minister, deeply conflicted, openly troubled. The underlings had never before seen him like this—indecisive.

“If I so much as whispered a hint of approval at the Greek proposal, he might see me as a fool,” said the energy minister, truly anxious. “After the bollixing up of the Ukrainian gas situation…”

The two underlings sat silent.

“And I know what President Putin will say,” said the energy minister, coming to a realization of the proper course of action, “sell gas for cash—or come back dead on your checkbook.”

“Yes, the foreign cash reserves,” said one of the underlings, echoing the obvious.

“Keep an eye on the Greeks,” said the minister returning to his customary decisiveness. “If the Greeks stay in the euro, possibly we could squeeze some cash out of a Greek bank, get them to finance a pipeline,” and the energy minister turned towards one of the underlings and smiled, “like you suggested.”

The underling basked in this rare and unexpected praise.

“Otherwise,” said the energy minister with disdain, “they’re just anchovies drying in the sun.”


Jack, with James in tow, was ushered into the office of the central committee of the Syriza political party in Athens along with Costas. A slogan over the top of the portal to the meeting room said “Ever onward to victory – Ché Guevara.” On the wall were colored poster prints of Lenin, Stalin, and the iconic beret-wearing Guevara poster. Crossed red flags adorned another wall. Red posters with black clenched fists and faces upturned to the sky shouting “Power to the People” in multiple languages graced another wall. Soft strains of L’Internationale hummed from ceiling speakers.

James looked around in wonder. He couldn’t wait to get back to London and tell his colleagues about this visit; it was like time traveling back to 1957, he thought. Jack had told him they would be visiting aging radicals from the revolutionary Left. Jack had dismissed them as “low flying jimmies,” a leftover term from the era of Margaret Thatcher to describe Scottish Labor MPs languishing away on the back benches.

An elderly Greek with long stringy gray hair stood up. He held his hand out to Costas, the banker, and said sardonically, “Ah, the paymaster has arrived.”

Jack leaned over and whispered to James, “Costas pays the rent on the headquarters.”

“You’re having a good week,” said Costas to the aging Leftist.

“And Sunday we will win the referendum. Democracy will speak. We in the Left Faction will be vindicated.”

“Yes, the referendum is on our minds,” said Costas. “Petros, I want you to meet my British banker friend and his associate.” He introduced the two Englishmen.

“Ah, the imperialists come crawling on their knees to the tribunes of the people,” said Petros.

“Petros is the grand old man of the Left Faction of Syriza,” said Costas.

“The Greek people will speak Sunday in the referendum,” said Petros. “Then Europe will see a proud people assert their rights…democracy will again walk the streets of Athens…”

“Well, what we would like to see is a proud people get their money out of the ATMs next week,” said Jack as he shook Petros’ hand.

Petros looked over at a young woman hovering nearby and asked, “Tea for our guests, please.” He turned back to Jack and said, “Yes, but this morning even the IMF said that Greece’s foreign debt must be restructured…the Troika is broken…the capitalist front is cracking.” A slow smile came over Petros’ face; he’d never thought he’d live to see the day.

“We fully agree,” said Jack.

“What he means,” said Costas, “is that it’s other people’s money that will get restructured.”

“Not exactly,” countered Jack. “All that debt is just paper held by the big international agencies in Brussels and Washington. It’s hardly money at all—it’s the stuff of bureaucratic make believe.”

“Except when the German führer uses it as a club,” said Petros. Debt was the new concentration camp of the Fourth Reich.

“Point taken,” agreed Jack. “But the immediate problem is to put money into the Greek ATM machines next week.”

“Yes, well I can see…after the capitulation, the Greek government will have to dictate appropriate terms to the Eurogroup,” said Petros.

“That’s the spirit,” said Jack. “We think Syriza should broaden its coalition into a truly National Front.”

“Yes, a Popular Front…establish true unity of the working classes,” said Petros, nostalgia starting to put a dreamy look in his eyes.

“Yes, establish the people’s agenda and then throw the Europeans a couple of bones on tax and pension reforms,” added Jack. “That will bring additional money for true reform.”

“Pensions?” asked Petros with a suspicious eye. “The widows…the orphans…”

“You can always backtrack later,” said Jack.

“That’s true,” said Petros with a deeply thoughtful look. “As the Chinese Comrades say, if the cat catches mice, who cares what color it is.”

“Chairman Deng, I believe,” said Jack.

“For an imperialist,” said Petros to Costas, “he’s a pretty good fellow traveler.”

“We’ll see if his check clears the bank next week,” said Costas gravely. He looked at Jack and bore in. “Right? English.”

“Absolutely. We stand ready next week after the referendum to put the strong and loud voice of the Overseas Investment Association behind the proposals of the Greek government for the third bailout.”

“We’d rather eat ashes than cave to the German jack boots,” said Petros. Costas winced. “Besides there are alternatives…comrades in Moscow and China who stand ready to invest in the New Greece.”

“But probably not sixty billion euros worth,” said Jack. “Our contacts with the Chinese say they are very skeptical about what they call Greece’s Golden Begging Bowl…they respect strength, not supplication…they are deeply imbued with the sacrifices of the Long March…”

“Golden Begging Bowl?” asked Petros with a hurt look on his face. “They say that about us?”

“Yes,” replied Jack and he leaned over and said in a loud whisper to Petros, “We have an important Chinese contact on our committee, sort of an ex officio member.”

Petros’ eyes went wide. “You do?”

“Yes, one of the men building the new port facilities at Piraeus…a billion for one…a billion for the second…You know, Bulldozer Yan of China Construction Group.”

“Bulldozer Yan is with you?” asked Petros. “Very Silk Road.”

“Yes, part of the team that wants to turn Piraeus into the next Rotterdam, make it the biggest container port in the Mediterranean.”

“Yes, I know the projects,” said Petros’ eagerly, the two biggest construction projects in Greece in years with the promise of more to come. Union members were getting steady work.

“Well, your energy minister is stiffing the Chinese on their bid for the Greek electricity grid…and the overall port facility management concession has been frozen…and Bulldozer Yan’s new contracts are on hold…not good…”

“We can’t give up all the crown jewels to foreigners…even fellow Communists…”

“Yes, well Bulldozer Yan told us the Chinese are very disappointed in the lack of solidarity shown by Syriza to Chinese development projects.”

“Worse,” added James. “You’ve derailed the Chinese takeover of the national electricity distributor Admie. Not good. That’s where new money comes from.”

“Repudiating the cave-ins and giveaways by the Moderates was part of the Syriza program,” said Petros. “We won the election.”

“But you’re losing the economic war,” said Jack.

“You know what happens if you get pushed out of the euro?” said James.

“We go back to the drachma and liberate the Greek people,” said Petros, but doubt had crept into his voice.

“Yes, and the Chinese will be waiting for you,” said Jack.

“To help?” asked Petros, a ray of forlorn hopefulness in his voice.

“To buy,” said Jack firmly. “They think the drachma is play money. The Chinese have lined up the financing so that when Greece exits the euro the Chinese can come in and buy up the choice properties at a big discount…the day after Grexit he says cash will be king…The Chinese have geared up a bank…”

“Yes, I’ve heard the Chinese have a new bank,” said Petros, trying to put the confusing pieces together in his head.

“And that new bank is all Chinese. That means no namby pamby meddling from the Americans in the new bank,” added Jack. “All Chinese.”

Petros gulped. He remembered talking with the Greek negotiators about the port contracts; the Chinese had not left a crumb on the table, they had said. The union representing the workers on the construction projects came away empty handed…very hard...tougher than the Germans…much lower wages…

Jack watched.

“Yes, I can see his point of view…but Comrade Putin…” mumbled Petros.

“Doesn’t have any money,” said Jack. “That’s why the South Stream Project through Bulgaria collapsed last year…it’s very expensive to liberate the eastern provinces of the Ukraine from German economic imperialism and still do all the pipelines…and with the capitalist sanctions…”

“Yes, that’s true…the Germans are heartless plunderers…we learned that in the war…”

“Now, if you were to decide to go with Comrade Putin—I’m sure he’s all for solidarity on mutually beneficial terms, but the Ukraine crisis has interrupted the march of progress…foreign exchange reserves are in short supply—“

Petros’ expression fell. Yes, the energy minister had come back yet again from Moscow empty handed. The Russians had expressed interest…“pending financing,” they said…

“We might be able to help with some international financing,” said Jack. “My associate here…”

“Let me introduce myself. James Smith, sir. I’m with River Bridge Capital…City of London…”

“He’s a spy for British Petroleum,” said Petros almost in a shout. “Trying to cram the Azeri pipeline down our throats.” Petros glared at Costas as if he were a traitor for bringing these foreigners into the sanctum. The Azeri pipeline was a Brussels-approved pipeline to bring Azerbaijan gas through Turkey and across Greece to Italy. Brussels wanted to diversify energy sources away from Russia. The Greek energy minister’s efforts to try to do something with Russia was a major annoyance, a bad faith card being played in the geopolitical poker game by what Brussels regarded as Greek amateurs.

“No, sir,” said James. “Our only investments are with the bank headed by Costas and his associates.”

“First they take over the banks, then the pipelines,” sneered Petros.

“The possible problem, Petros,” said Costas, “is if there is no third bailout, there may be no banks to take over.”

“We have plans for that…you’ll see,” said Petros. “We will mobilize the hidden wealth of Greece…for the people…the international comrades will come to our assistance…”

Jack looked at James and shrugged his shoulders. Something else was going on with the Left Faction.

“Next week,” said Costas ominously, “we all must be prepared to discuss hard choices…”

“New money,” added Jack.

“Sources of financing must be identified,” warned Costas. He looked at Petros and added, “For the pensions…the finance ministry tells me that one-half the funds come from international credit…”

“And,” said Jack, “it would be a lot easier if Greece were still in the euro…but if required we could do dollars or pounds…whatever works for you…possibly our commissions will be more generous than Comrade Putin’s…”

Costas looked at Jack with sharp appreciation—he had said the right words at the right time. The Englishman knew how to grease a wheel.

“Yes, I can see. I have a lot to discuss with the Old Comrades on the central committee,” said Petros wanting to end the conversation; he was afraid he’d said too much already. The foreigners were tricky.

“Your recommendation would be key. The prime minister values your counsel,” said Costas.

“Yes, Alexis is such a good boy, I’m sure he will be reasonable,” said Petros. He looked at Jack earnestly. “The commissions, you say?”

“Cold cash in the Cypriot bank of your choice.”

“Yes, sometimes pragmatism must yield to…” Petros’ voice trailed off.

The visitors departed. Out of the balcony, the young woman watched them leave. She texted her boyfriend at the Russian embassy: Brit SIS agent and BP rep bribed Petros into supporting bailout and the Azeri pipeline.

The Russian was on to Moscow in minutes. He remembered the original message from the energy ministry in Moscow, so detailed, so farsighted. How had Moscow seen all of this so clearly? He wondered.

La Duchesse

Jack and James sat at a far table in the back corner of the lounge at La Grande Bretagne. The waiter set cold beers down on the table. James dived right into his and then set the glass down. He looked at Jack and asked, “What do you think?”

“Watch the pensions, not the pipelines,” said Jack. “Untold wealth from the pipelines is an illusion, though I’m not sure the Syriza Leftists know that. They’re in a time warp.”

“Why the pensions?”

“Because the Europeans can always use the pensions to get any government in Athens to go along with whatever the final deal is. No Greek government can destitute grandma.”

“I see,” said James. “But it might cost more than I thought to buy over all the old revolutionaries.”

“Possibly not so much,” said Jack. “We just have to splinter Syriza. It’s divide and conquer. Didn’t you learn anything in business school?”

“Just some case studies on light influence buying…coopting regulatory agencies…stuff like that,” said James.

“Don’t worry. We splinter the radicals and the moderates will band with the other political parties and deliver the majority—they all want to stay in the euro. They gave that away at the beginning of the negotiation last January.”

“But it’s looking like we’re going to lose on the referendum on Sunday,” said James. “We’ll have crowds throwing flowers on Monday…the government in disarray on Tuesday…and revolution on the streets on Wednesday…you’ll need that queen on Thursday, Friday for sure…the bankers will insist.”

“Understand,” said Jack and he peered at his iPhone as he scrolled down the list of contacts.

“Here we go,” he exclaimed. “La duchesse. Zizi Lambrino.” He looked at James and said, “Look it up.”

James quickly Googled the name and read through the Wikipedia listing. “Doesn’t do us any good. She’s long dead.”

“It’s the just the beginning of a long story, my boy,” replied Jack. “The original Zizi was the daughter of General Constantin Lambrino of an old and distinguished Byzantine imperial family when she met and fell in love with Prince Carol during the Great War. They eloped and were married in the Orthodox Cathedral in Odessa, the Ukraine. Later the king compelled the annulment of the marriage but not before a son Mircea Carol was born. Prince Carol, later king, and the Romanian government continued to support mother and son in French exile forever after. Responsibility was acknowledged.”

“So, how does your Zizi Lambrino fit in?” asked James, now intrigued by this Balkan royal intrigue as he took another sip of beer.

“General Constantin Lambrino also had a son and he arranged a ducal title for his son to go with the family’s vast estates. But in the late 1930s, the family—ardent traditionalists--was compelled to flee before the black tide of fascism, finally settling in Monaco after an odyssey across the troubled landscapes of the Balkans at war—never a pretty sight. There the duc used the last of the ducal jewels to purchase a beautiful Belle Époque property while he went to work as a croupier at the casino. His son, the cousin of the original Zizi Lambrino, went to work as a clerk at a Lebanese bank and worked his way to great prominence in certain banking circles; he knew the secret ways of exile communities, the hidden façades behind which lie expatriate wealth.”

“And Zizi?” eagerly asked James, now hooked.

“She is the granddaughter of the bank clerk. Her father also rose to international prominence in banking circles.”

“And she is where today?”

“She is a leading real estate broker in Monaco; she’s on the Rolodex of every LLC lawyer in every tax haven in the world.”

“And how do you know her?”

“When I was first with Barclays International…and in those days there was a lot of restless money out there in what had once been the empire…and it couldn’t go home again…individuals of sharp discernment started to settle in Monaco…and sometimes the money would stay in a distant affiliate of Barclays and we would write a fully secured mortgage on a Monaco property…”

“A mirror financing,” said James.

“Exactly,” said Jack. “South African gold mining shares…for the sunny vistas of real estate overlooking the azure waters of the Mediterranean.”

“And Zizi?”

“That’s when I met Zizi. Dark, vivacious, could sell a camel to an Arab…simply extraordinary.”

“Why do you think she will want to come to Athens to be Queen of Greece?”

“It’ll only be for a couple of days…and she’ll do me the favor…we have flats in the same beautiful old Belle Époque building in La Condamine section of Monaco…away from the high rises…deep in the past century…on those streets in the spring twilight…the grace of the past comes back.”

“And la duchesse? The title?”

“An honorific that goes with the eldest daughter of the eldest son of the late great-grandfather Constantin…but she’s a blood relative of a woman who was once married to the crown prince of Romania who later became king of Romania…and remember that marriage was in the Orthodox Cathedral in Odessa…we’re looking at an Orthodox throne in Athens.”

“Still sounds kind of distant,” said James.

“Distance is in the eye of the beholder,” said Jack rubbing his hands together. “Let me give Zizi a call.” He looked at the contacts on his phone screen and double tapped a number.

“Hello, Zizi? How are you? It’s Jack. Can we chat for a minute? I have an opportunity that might prove lucrative for you.”

No comments:

Post a Comment