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The President signed the distinguished visitors’ book, following the meeting, which took place at Vienna Economic Chamber.

President of Russia Vladimir Putin: Mr President, Mr President of the Chamber, ladies and gentlemen,

It is a great pleasure to greet here today Austrian business leaders, in particular those who link their interests and long-term plans to our country, to Russia. As the President noted just now, we held a similar meeting in 2001 and again in 2007. I am sure that our discussion today will also be useful and substantial.

Our bilateral economic cooperation has grown steadily over recent years. Trade turnover increased by almost 5 percent in 2013. Russia is one of Austria’s ten biggest trade and economic partners. The structure of our reciprocal exports and imports is also improving: the share of services was up by 20.2 percent in 2013 and reached nearly $3 billion. We have, unfortunately, seen a slight drop in trade over the first four months of 2014, but I think this drop can be put down to seasonal factors and we will soon pick up the positive trend once more. 

Our reciprocal investment is growing too. Austrian investment in Russian assets came to $7.5 billion at the start of the year, and Russian investment in the Austrian economy was at a similar level, perhaps slightly less, but comparable in any case. We think that reciprocal investment of this sort will continue to develop.

We are carrying out big projects in a diverse range of sectors, from machine building and construction to transport and tourism.

Austrian companies supply composite materials for the aircraft manufacturing industry and are working in the automotive industry. In particular, the company Magna is working with Russia’s GAZ, producing the GAZelle NEXT model for small and medium-sized businesses, which is enjoying good demand on the Russian market. These vehicles have been certified for sale in Europe too. 

Austrian companies have built Russia’s first fibre-optic production plant. We are in the process of organising production of modern metro train carriages too. 

The Austrians made a big contribution to building the sports infrastructure for the Sochi Olympics. Ladies and gentlemen, total Sochi Olympics-related orders carried out by Austrian business came to $1.65 billion. Austrian companies will also be able to take part in building facilities for the 2018 FIFA World Cup in Russia.

The Intergovernmental commission will play a part in building up our trade and investment cooperation. We also hope for active participation from the Russian-Austrian Business Council and the recently opened Innovation Support Centre at the Russian Trade Office in Vienna. 

Our bilateral relations in the energy sector are strategically important. Austrian oil and gas company OMV has been working fruitfully with Gazprom for a long time now and has without question made a strategically correct choice in favour of active participation in building the South Stream gas pipeline.

This is not a project aimed against anyone. I want to stress this point once again. This is a project that was undertaken in the interests of Europe’s energy stability in general and the interests of our partners. It is not against anyone, but is for our interests. We never work against anyone. 

Mr President already mentioned the countries this pipeline will cross. I want to note that the shareholders and participants in the project include Italian, German and French companies. We can thus be completely confident in calling this a European project. There is no sense in politicising anything. Russia needs this project and so do our partners in Europe.

Our experts estimate that bringing Austria into this project would make it possible to reduce substantially the overall pipe-laying costs. Austria’s Baumgarten would truly become a key energy hub in Central and Eastern Europe and Austria would be a major hub for Russian gas on the European continent. 

Today, Gazprom and OMV representatives signed an agreement on a joint project company and agreed on the company’s management structure, financing principles, and distribution of profits between the participants. This lays the base for starting practical preparation for building the Austrian stretch of the gas pipeline. 

South Stream’s swift implementation would strengthen Europe’s energy security, diversify hydrocarbon supply routes and make them more reliable. This is particularly important against the background of the serious crisis in Ukraine, which is a transit route for the biggest gas pipeline system. We and our European partners have already encountered crises in the past. We hope that our Ukrainian friends will succeed in resolving all of these problems through a process of internal political dialogue. But let me say again we need to diversify supply routes whatever the case, given the European economy’s growing demand for energy resources.

We see the European Union as Russia’s key partner in the energy sector, but our work together must be predictable and based on the principles of mutual benefit and common interests of the energy resource producers and consumers.

Unfortunately, some Western politicians make insistent calls to artificially reduce Russia’s share in European energy supplies and see EU dependence on Russian gas as a threat. I do not think that there is anything to fear in this respect because this dependence is always reciprocal, and interdependence is always the basis and guarantee of stability.

I think that our Austrian colleagues understand better than many the groundless nature of fears of excessive dependence. Our country has been exporting energy resources to Europe for more than 45 years now and has always met its obligations on time and in full. In 1968, Austria was the first Western country to sign a long-term contract with the former Soviet Union for natural gas supplies. Since then, Austrian consumers have received around 190 billion cubic metres of Russian gas. At the same time, more than 40 billion cubic metres of gas transits via Austria every year to other European countries.

Colleagues, let me assure you that Russia will continue to provide the best conditions possible for European companies’ activities on our market and show our openness to business.

This strategy is bearing fruit. Russia’s economy received almost $80 billion in direct investment last year. Yes, we are aware of the capital flight problem, but this is mainly the conversion of rubles into dollars or euros. In terms of direct foreign investment though, Russia has made it into the world’s top three for the first time. 

Our GDP increased a little last year, by 1.3 percent. This is slightly less than the 2012 figure, but there was growth nonetheless. I think that we will achieve a higher figure for 2014 than we forecast at the start of the year.

We are seeing quite a good dynamic overall in the economy at the moment and the pace is picking up. Industrial growth was close to 2 percent for the first five months of 2014. Consumer demand was up by 3.2 percent for the first quarter. 

Russia has made progress in reducing administrative pressure on business. We are very much aware of our problems and are working closely with the business community to improve the situation. We have simplified customs and tax procedures and reduced the number of various compulsory bureaucratic permits and agreements.

According to World Bank data, in 2013, our country was among the top three in improving the business climate, moving up 19 points in one go on the rating. Russia is now in 17^th place for registration of ownership rights, and in 10^th place for execution of contracts. Overall, these are satisfactory results and a satisfactory pace of improving the climate for doing business.

We are constantly working to improve our laws and regulations. We currently have around 160 draft laws in preparation, all aimed at further improving the business climate. We plan to complete this ambitious work by the end of next year. I am sure that investors will soon be able to appreciate for themselves the greater ease and convenience of working in our market.

The big integration project that we are carrying out together with Belarus and Kazakhstan opens up new opportunities for Austrian producers and entrepreneurs. In Kazakhstan’s capital, Astana, we signed in May the Agreement on the Eurasian Economic Union, which will come into force on January 1, 2015. This will create a common market with a total population of more than 170 million people and free movement of capital, goods, services and labour. Of course it will be impossible to avoid some restrictions and exemptions in the initial stages, but we will gradually move towards eliminating this. What I want to stress is that I hope this will offer European business, including Austrian business, better, more favourable conditions for working in Russia, Kazakhstan and Belarus, seeing as the Eurasian Union is being established exclusively on the base of World Trade Organisation norms.

Ladies and gentlemen,

Austria is a traditionally important and trusted partner for Russia. We sincerely want this to continue. Our joint efforts pursue the ultimate goal of economic growth in our countries, creating new jobs, and raising our peoples’ living standards.

Ladies and gentlemen, allow me to thank you for the invitation and for the attention with which you have listened to me. I also want to thank many of you for the years of work together and I would like to express the hope that other Austrian companies will also join this excellent group that is already working with us. Russia’s authorities will do everything possible to ensure that your work in Russia is successful, fruitful and profitable. 

Thank you very much for your attention.