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President of Russia Vladimir Putin: Ladies and gentlemen,

First, I would like to thank Mr President and Mr Prime Minister for the invitation.

I would like to say that our talks took place in a very constructive and business-like atmosphere. The main result is that we have confirmed our mutual intent to develop cooperation between Serbia and Russia in various areas. We have noted that our relations are developing quite well, if not to say very well. Against the backdrop of the current problems in the global economy, an annual growth of over 16 percent is a very good index.

Russia’s investment in Serbia’s economy is also growing. Currently it has reached about $3 billion. Our leading companies are operating steadily. One of the leaders of our cooperation – NIS – is picking up speed. Russian participants have already invested $2 billion and are ready to invest another $1 billion.

Only recently, when the Russian company was joining NIS it was a losing business. Today, it is successfully operating and is a major source of budget revenue in Serbia, accounting for 14 percent of overall budget revenue. Our other companies, like LUKOIL, have already invested $300–400 million and are ready to develop their cooperation.

We cooperate in many other areas as well, such as energy, machine building, high technologies, and, of course, agriculture. Today Serbia supplies about $130–150 million worth of agricultural produce to Russia. If we implement the agreements we have reached today in the course of our negotiations, in a very short period of time this amount can grow to $500 million.

The Serbian economy benefits from this as well in terms of additional jobs and taxes collected at all levels of the budget system. This is also a positive factor for Russia because of the vacant positions that have appeared after Russia imposed limitations on the delivery of agricultural produce from countries that joined or initiated sanctions against it. In other words, this could turn out to be a blessing in disguise. I believe this is a good chance for producers in those countries that wish to develop relations with the Russian Federation.

We naturally discussed political issues as well. As you may know, we advocate a comprehensive resolution of the Kosovo issue on the basis of the UN Security Council Resolution 1244, and we have always adhered to this position and intend to do so in future.

Our political relations are also very stable. We expect that after Belgrade assumes Presidency of the OSCE in 2015, we will be able to continue our constructive work with this organisation as well, with the support in this case of our Serbian friends.

We will be very happy to see the Serbian leadership, the President of Serbia in Moscow on May 9 next year for the celebration of the 70^th anniversary of Victory over Nazism.

I am very happy and grateful to the Serbian leadership for the invitation to visit Belgrade during the celebration of the 70^th anniversary of the liberation of this country from Nazi occupation. This is a page in our common glorious history that unites us and creates a good foundation for the further development of our relations.

Thank you.

Question: Mr President, you have just said that Russian investment in the Serbian economy has reached $3 billion. Considering the situation that is developing on the investment market and given that a number of countries are trying to make Russia’s existence on this market difficult, how do you see the prospects for Russian-Serbian investment cooperation? Maybe you discussed some specific future projects today. Thank you.

Vladimir Putin: Those who tried to make our economic life difficult are making it difficult for themselves as well. We know that the losses experienced by agricultural producers in those countries of Europe that imposed sanctions against Russia (and we were forced to reciprocate by limiting supply of agricultural produce) run into billions of euros. We would not like to carry on this way, but this is what we have at this point. As I have said, for countries like Serbia this is a favourable time to occupy its proper spot on our market.

In this connection, we are ready – this is something we discussed with the Prime Minister – to invest into the development of Serbian agriculture together with Russian producers and, by the way, with those producers in Western Europe who would like to operate in Serbia to ship their produce to the Russian market. We have very good relations with many producers, with major European companies and this is where I see opportunities for joint work.

As for other investment, it is also mutually beneficial, and here I am referring not only to energy, important as it is, but also to machine building and infrastructure development. I already mentioned that Russia has allocated an $800 million loan to Serbia for the development of its railway network. The first stage is being prepared for implementation – worth $104 or $105 million.

We have said today that we are ready to carry on this work, but generally we are talking here not only about state investment but private investment as well. I believe that in the next three years it can be at least doubled to reach $6 or even around $10 billion.

Question: Do you expect a gas crisis in Europe this winter? And in this context, what are the prospects for the implementation of the South Stream project?

Vladimir Putin: The South Stream project cannot be implemented unilaterally. This is just like love: it can only be happy if there are two people in this wonderful process and both want to develop their relations. Same here: we cannot unilaterally build a pipeline system worth billions of dollars if our partners are still considering whether they need to implement this project or not.

Incidentally, I would like to draw your attention to the fact that there have been extensive discussions in connection with and during the construction of the North Stream – the pipeline system along the bottom of the Baltic Sea. Now that it is built, everyone is happy and they all thank those who initiated the project, who built it and who organised the work because the project turned out to be very timely.

The same is true of the South Stream. I am certain that this project is profitable for European consumers because it significantly reduces transit risks.

The delays in the construction of the South Stream only have to do with political considerations and in this case, quite obviously, politics are damaging the economy. To an extent, this is reducing the competitive advantages of the European economy compared to those of other regions of the world.

As for possible crises, whether we expect them or not, we would not like to see any critical situations developing in autumn and winter. I can assure you that there will be no crises through the fault of the Russian participants in energy cooperation in Europe. Russia has always been a reliable supplier; we have sufficient resources to provide for our own needs and for the growing needs of our consumers in Europe or Asia.

However, there are significant transit risks, and if we see that our Ukrainian partners begin unsanctioned siphoning of our gas from the export pipeline system, the way they did, say, in 2008, we will reduce our shipments by that very amount, just as we did in 2008.

However, I really do hope this does not happen, I hope that shortly – I am having meetings in Italy today on this issue as well, our partners are in close contact, both European and Ukrainian ones – I hope we manage to reach agreement on all matters and put an end to all disputes.