Russia can get a strategic geopolitical boost from Greece: Minister

Some fiscal measures are unpleasant: Greek minister

Greece's strategic location in the Mediterranean is a bonus for foreign investors like Russia, the deputy minister for foreign affairs in Greece told CNBC.

Speaking to CNBC on the sidelines of the St Petersburg International Economic Forum (SPIEF), Dimitris Mardas told CNBC Greece offered foreign investors the chance of a geopolitical boost, given its location straddling Europe and the Middle East.

"We're trying to attract investors, not only from Russia but from all over the world, who can invest in many areas because Greece has a dominant, strategic place in the whole of the Balkans, Turkey and Middle East. So this geopolitical factor is the main determinant favor for foreign investors."

Russia has been one of Greece's few "friends" during its recent period of economic turmoil. Nonetheless, many analysts have wondered what the Kremlin could want in return for investing in the country, at a time when relations between Russia and the rest of the European Union are frosty, with several pointing to Greece's strategically important location.

The same could be said of Greece's relations with the rest of Europe given its fraught negotiations over a third bailout and the demands for massive spending cuts in return for a third financial lifeline.

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Russian President Vladimir Putin visited Athens last month and talks focused on bilateral trade, economic and investment cooperation including projects in the energy and transport sector. Ahead of the visit, Putin even penned an article in Greek newspaper Kathimerini calling Greece "Russia's important partner in Europe."

Mardas said that his country had to pursue investment through privatization (as demanded by its latest international bailout) and through its various sectors.

"The first area is privatization and it's one of the tasks of our ministry to attract foreign investors in Greece. We present many opportunities in many areas – not only in energy, foodstuffs and tourism but in other areas such as aerospace and mechanical engineering, for example," he said, adding that Greece had small but dynamic firms in those areas.

He said that Greece had the potential to be turned into a "logistics hub," thanks to its numerous ports, including Piraeus.

Under pressure from its international lenders to privatize key state assets, Greece sold off the Piraeus Port Authority to Chinese company COSCO last year. The deal will see COSCO invest 350 million euros ($392.4 million) into the port over the next decade.

Despite Mardas' optimism over Greece's economic prospects, public opposition to austerity measures remains strong. Measures demanded of Greece's lenders in return for its third international bailout worth 86 billion euros include an overhaul of the country's pension system, tax hikes and strict fiscal targets, as well as the unpopular privatization program.

Greek Prime Minister Alexis Tsipras faced calls to resign on Wednesday as thousands of demonstrators took to Syntagma Square in Athens to protest a fresh round of austerity measures demanded by international lenders.

Angry protesters held banners reading "Go Home!" and "Shame on you!" outside a parliamentary session debating Greece's latest growth plan.

Tsipras had initially come to lead the country on an anti-austerity ticket although he capitulated to lenders' demands for more austerity (despite a referendum in which the majority of Greeks rejected bailout demands) when Greece came close to bankruptcy and crashing out of the euro zone last summer.

He was nonetheless re-elected after a snap election in September, giving him four more years in office but rival party New Democracy party has overtaken Syriza in opinion polls and some analysts have said that another election could happen in 2017.

Mardas told CNBC that the government has an order to govern for four years but that it had to enact austerity measures in the short-term.

"We know that there are some fiscal measures which are unpleasant measures, however, these measures are for a short-run. This means that when the recovery comes, and we expect it could even come this year, all these unpleasant fiscal measures will be relaxed in part or by the time that we have another kind of policy."

"This happens in all countries that face some kind of crisis. We have fiscal measures and austerity policies," he said, adding that the government was in the "worst period" of governing during its term in office.

"Our main goal now is how we can see the recovery of the economy and which way growth can come to Greece," he said.