Israel-Greece Ties Keeps Flotilla Anchored

Greece’s move to prevent a flotilla from departing its ports and challenging Israel’s blockade of the Gaza Strip highlights the deepening ties between the once antagonistic countries.

After a previous attempt ended in violence last year, pro- Palestinian activists planned a second, bigger convoy this month to undermine the blockade of Hamas-ruled Gaza by delivering aid without permission. The effort fizzled as Greece stopped seven ships from sailing, saying they lack proper safety equipment.

Greece only established full diplomatic relations with Israel in 1990, one of the last European states to do so. Its strengthening rapport with Israel, spurred in recent years by the Jewish state’s worsening relationship with Turkey, has led to increased military cooperation and the prospect of greater economic integration, including natural gas sales.

“The relationship with Israel is multidimensional; it’s economics, tourism, military exercises, and part of the equation is natural gas,” said Aristotle Tziampiris, associate professor of international relations at Greece’s University of Piraeus. “It was the deterioration of the relationship between Turkey and Israel that provided an opening.”

The impediments thrown up by Greece may have averted a repeat of last year’s confrontation at sea, when Israeli naval commandos dropped from helicopters onto the deck of one ship in a six-vessel convoy. Israel says people on board shot first and attacked with iron bars, an allegation the passengers denied. Nine Turks were killed.

Greece instead offered to send the aid “through existing channels, as requested by the UN Secretary General,” according to a July 3 statement from the Foreign Ministry.

Foe to Friend

Israel says it won’t allow the vessels to reach Gaza, citing concerns over arms smuggling. The activists say the blockade is illegal and causes hardship for Gaza’s population.

Ties between Greek and Israel have been slow to develop. The relationship was especially acrimonious during the 1980s, when then-prime minister Andreas Papandreou was a strong supporter of the Palestinian Liberation Organization and a vocal critic of Israeli policies.

His son George Papandreou, the current Greek prime minister, has taken a different approach. In July 2010 he became the first Greek premier to visit Jerusalem in decades. The next month he hosted Israeli Prime Minister Benjamin Netanyahu on an unprecedented visit to Athens.

Netanyahu, 61, singled out “my friend” Papandreou, 59, in a July 1 speech praising U.S. and European leaders for opposing the flotilla.

Leviathan Field

The biggest potential for economic cooperation lies with Israel’s natural gas discoveries, especially the Leviathan field that lies close to Cyprus and holds an estimated 16 trillion cubic feet. Israel and Greece have discussed exporting the gas either through an undersea pipeline to the Greek mainland or via a liquefied natural gas conversion plant to be built in Cyprus.

“Greece could very much become a hub for Israeli gas exports from the Leviathan field to Europe at a time when Europe is seeking to diversify away from its reliance on Russian gas,” said John Sitilides, chairman of the board of advisers for the Southeast Europe Project of the Woodrow Wilson Center, a Washington-based research institute. “This is a relationship that makes sense.”

Important for both countries are the reciprocal military advantages the Israel-Greece relationship provides, says Alon Liel, former director-general of the Israeli Foreign Ministry. He cited as one such benefit media reports of Israeli willingness to accept deferred payments for weapons from its government-controlled arms industry to Greece.

Military Drills

Greece in turn is providing Israel with airspace, land and sea territory to conduct large-scale military exercises, replacing what had formerly been Turkey’s role. Greece and Israel have conducted at least two joint military exercises in the past year, including a just-concluded two-week aerial drill.

Israeli officials also see an opportunity to increase trade. Shipments between the countries were $412.8 million last year. Trade so far this year was $179.1 million, up from $153.6 million in the January-May of 2010, according to the Israeli statistics bureau.

“There is the potential to increase trade, certainly from the Israeli side, in water technology, alternative energy, health care and homeland security,’ said Dan Catarivas, director of the international department of the Israel Manufacturers Association, which on July 12 is hosting Greek President Karolos Papoulias at a trade promotion event in Tel Aviv.

Turkey Ties Totter

Among the Israeli companies doing business in Greece are Teva Pharmaceuticals Inc., the world’s largest generic drugs company, and agrochemicals maker Makhteshim-Agan Industries Ltd. (MAIN)

One of the beneficiaries of Israeli business may be the Greek tourism industry, with the country increasingly popular as the preferred Aegean resort in place of Turkey. The number of Israeli tourists in Greece increased 139 percent in 2010 to 197,159, according to the Hellenic Statistical Authority.

As ties with Greece strengthen, some of Israel’s links to Turkey are fraying. In the first five months of this year, the number of Israelis traveling to Turkey fell 60 percent, Hurriyet said last month.

Israeli and Turkish officials will meet later this month to continue discussions on the Mavi Marmara incident and how to repair the relationship between the countries, an Israeli government official said, speaking on the condition of anonymity because he wasn’t authorized to comment on-record.

Turkish Prime Minister Recep Tayyip Erdogan told his parliament on July 8 he insists Israel formally apologize for the incident and pay compensation to the victims’ families if it wants to renormalize the relationship. Israeli Foreign Minister Avigdor Liberman told Army Radio on July 10 that Erdogan’s statement shows he is “not serious” about renewing ties.

To contact the reporter on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net; Paul Tugwell in Athens ptugwell1@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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