The Greek crisis of the last months has not just had one dimension. Apart from being a financial and social crisis, the state of the Greek economy has also effects on the country’s foreign policy and its broader geo-strategic interests in the Balkans and eastern Mediterranean.

First, the Greek crisis brings into  the spotlight the European Union’s two tier structure. Europe’s South (Portugal, Spain) has become financially pressed and dependent on the the so-called “large-states” of the Union, like Germany and France.

Slowly but steadily, the relations between Europe’s North and the South are becoming as significant as the East-West axis following the end of the Second World War in 1945.

For many decades, Southern Europe has been at the forefront of the waves of immigration coming from Asia and northern Africa. Financial instability certainly do not help on such situations, especially when you are the entry point for these waves of immigration.

By having to fix their internal fiscal policies, countries like Greece, Portugal or Spain become less capable of dealing with immigration and the broader security issues which arise at their borders.

Second, the Greek budget crisis could have significant implications in the historically troubled Balkan peninsula.

As long as the European Union faces increased internal problems, it is unlikely that Brussels will move to enlarge the EU in the foreseeable future.

States like Croatia, Albania or the Former Yugoslav Republic of Macedonia will probably face huge obstacles in negotiating their entry into the EU with the Union’s problematic bureaucracy.

And as long as the financial regulation of members’ ‘wounded’ economies (Greece, Ireland etc.) remains a priority, the prospect of an increase in the number of member states becomes less likely.

Third, nobody should not dismiss the impact the ongoing financial crisis in Greece is having on Greek foreign policy.

Under Papandreou Athens was supposed to play a more active role in the geopolitical proceedings in Eastern Mediterranean.

However the serious internal economic and fiscal developments have distracted the government and taken its attention away from diplomatic issues.

With the Prime Minister working “full-time” job in negotiating with the EU-IMF Troika, Foreign Minister Dimitris Droutsas will certainly have a tough job.

A serious question that arises from the Troika’s involvement in Greece’s domestic politics is whether Greece will be able to exercise a totally independent foreign policy.

As long as Athens relies on it’s strong European partners and the International Monetary Fund for support, the Greek diplomatic independence is at stake.

Therefore, a crucial question is the following: what concessions have been made and how onerous are the terms of the rescue deal for Greece’s national interests?

According to Greek Constitutional Law Professor Georgios Kassimatis*, the EU-IMF deal has seen “Greece’s relinquishment of it’s sovereign rights” in case the country fails to pay it’s debts.

Given this situation, everybody understands that for first time since the 1974 restoration of Democracy, Athens has a very limited range of diplomatic tools available to it to use.

A holding phase at this points is more advisable. Although there are important issues which need to be settled (Cyprus, Greco-Turkish donispute, Macedonia’s name), Greece cannot deal with these issues by itself, especially under the present circumstances.

On the other hand, the Greek government should not be a passive observer of the geopolitical developments in the region.

Apart from maintaining peaceful stability in the Athens-Ankara relationship and enhancing it’s ties with Israel, Greece should start seeking new, fruitful alliances with giants like Russia and China, which could be proved unexpectedly beneficial in the future.

* Professor Kassimatis’s text was presented by Mikis Theodorakis during a speech in Athens, December 1, 2010. Source: Eleftherotypia, 4.12.2010.