Official website of the President of Russia

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Federal Chancellor of Germany Angela Merkel (translated from Russian): Good afternoon, ladies and gentlemen,

I am pleased the President of Russia Dmitry Medvedev is paying us this visit, and that since yesterday evening we have been having detailed and substantive talks.

Our last meeting in Moscow was very brief due to the parade [celebrating the 65^th anniversary of Victory in the  Background information Great Patriotic War Great Patriotic War] and we only had time to exchange a few words, and so we decided to meet again here in a quieter setting to discuss bilateral matters and the international situation. Preparations for the G20 summit and an assessment of events in the world also came in for our attention. I spoke about the importance we in the European Union place on keeping the euro stable. This is why we adopted a package of measures to rescue the euro. We all share the view that keeping the euro stable is our main task, and one of the main tasks for ensuring stability in our world. The G20 will discuss financial market regulation. Russia and Germany both agree on this. I said that the question of reasonable budgets is a key issue in Germany’s eyes. We cannot achieve growth by running big deficits. We need to achieve sustainable growth. 

We discussed the whole range of international issues, including the question of closer cooperation on security between Germany and Russia. Mr Medvedev proposed developing new forms of security cooperation between the European Union and Russia. We think that we already have a good opportunity to build on the cooperation work that was going on at the ambassadorial level previously. We can develop this format by taking it to the ministerial level. 

We certainly have plenty to discuss, and we know how to listen to each other and how to find all kinds of solutions to even the most complex bilateral, regional or international problems.

Inside the EU we need to work together with Russia on laying the foundations for conflict resolution mechanisms covering both civil and military aspects. It has become apparent that the formats we have been using so far are insufficient. We need to maintain regular continued discussion on hotbeds of conflict. 

In Brussels there is a committee of the different countries’ ambassadors, who meet to discuss these issues. We could expand this committee’s work and have discussions take place at the foreign minister level. This is a body that we could use to resolve specific problems. I think that the situation in Trans-Dniester is a good example in this respect. It could provide us with an example of how this kind of dispute resolution mechanism can contribute to settling conflicts. We propose establishing this mechanism.

The German Federal Republic will put forward this proposal at this body’s next meeting in Brussels on Tuesday. Russia supports this initiative, and we think a positive reaction will come from the European Union too, and we will be able to take this practical step forward in expanding our cooperation with Russia. This cooperation will enable us to handle complicated situations better than was the case in the past.

Once more, thank you for this visit. We have tried to turn on the good weather too, so as to show ourselves in the best light.

President of Russia Dmitry Medvedev: Thank you very much.

Ladies and gentlemen,

I want to say thank you for today’s meeting. It has been unprecedented in terms of substance. Indeed, counting everything up, by my reckoning we have spent more than ten and a half hours in talks. That is a long time. I can tell you that when talks between state leaders last for more than 3–4 hours it is a sign that we are discussing many different issues. We certainly have plenty to discuss, and we know how to listen to each other and how to find all kinds of solutions to even the most complex bilateral, regional or international problems.

We agreed to continue our discussions very soon, above all on the economic side of things. We will have the opportunity to do this during the consultations in Yekaterinburg in July. We will talk there about the economy and about our bilateral projects. We did discuss these things today too, but our discussions centred more on security issues, on security cooperation between Russia and the European Union, and on European security issues and security in the broad sense of the word.

We hope that by making joint efforts we will be able to resolve all kinds of different problems. Ms Merkel gave an example just now of one issue on which we could hold more specific talks, in particular through the special Russia-EU committee on foreign policy and security. We already hold regular consultations, but we think it would be the right step to raise their level and give this mechanism a more systemic basis, make it a dedicated forum for exchanging views on current international affairs and security issues.

It could also work on drafting recommendations on various cooperation matters, including resolving crisis situations, in which Russia and the EU are involved as sponsors of settlement efforts, observers, or are for whatever reasons drawn into discussions on these matters. 

There is one area in which we think the European Union and Russia need to move faster and make concessions to each other (and we discussed at the Russia-EU summit): this is the abolition of visas.

We therefore agreed to continue our consultations on this subject. We do indeed want to raise the level at which these sorts of decisions are coordinated and develop closer coordination, not so as to create yet another of the bureaucratic organisations of which Europe and Russia already have more than enough, but to resolve practical issues. In particular, we talked about Trans-Dniester today, about the possibility of combining our efforts to resolve this conflict. This could involve stepping up efforts within the 5+2 group, bringing together all of the parties, but also perhaps developing some new possibilities too, such as those that the Russia-EU security forum would give us. I think this is an interesting initiative and I hope it wins the support of all the EU countries. I am grateful to my colleague for the understanding she has shown on this issue.

We discussed a broad range of issues today. We talked about resolving international problems, discussed Iran, of course, Afghanistan, the situation in Central Asia, and also European security issues. All of the issues I just mentioned are part of European security in the broader sense. We also talked about continuing work on the draft treaty on European security through the OSCE and the Corfu process, and also, perhaps, through the new platform that we discussed today. 

We discussed the results of the recent Russia-EU summit in Rostov-on-Don. Overall, I am fully satisfied with its results. 

But at the same time, we also need to intensify our cooperation in a whole range of areas. We discussed the situation in Europe, of course, the economic situation and the crisis in the euro zone. I was very interested to hear Germany’s views on this matter considering that Germany is one of the main players in all of these processes. But the situation in the euro zone and the economic development situation in various EU countries in general have a big impact on many of the economic processes underway in our country too.

I am happy with the explanations I received, because the situation was looking rather tense not so long ago. But now I feel confident that our colleagues can cope with the problems before them, and that the positive work accomplished over these last years in building the common EU economic space and creating a single currency – the euro – will not be undermined and will have good prospects for the future. It is very important for all of us, including in the Russian Federation, to feel this confidence. I remind you that Russia has very strong trade relations with the European Union and holds a substantial part of its foreign currency reserves in euros.

We spoke about the future too, of course. There is one area in which we think the European Union and Russia need to move faster and make concessions to each other (and we discussed at the Russia-EU summit): this is the abolition of visas. We understand the difficulties involved, but at the same time, we think we need to be more attentive towards each other. We will continue to discuss this matter, of course.

This more or less sums up the range of issues we discussed over these ten or so hours. Our meeting took place in a very frank and friendly atmosphere, and the chosen venue contributed to this too. But we have not yet finished our exchange of views and, after sharing our thoughts and comments with you here, we will go back to the castle and resume our discussion.

Question (translated from Russian): I have a question for you, Mr President. Can we interpret this new security initiative as a sign that the summit in Rostov-on-Don did not produce the hoped-for results, and so you are now trying to build policy on a bilateral basis with the Federal Chancellor?

I have a question for the Federal Chancellor too. Did you tell President Medvedev about the rather busy week you have just had here in Germany, and did he perhaps give you any advice on how to achieve stability here?

Dmitry Medvedev: Our relations with our main partners are based on several different positions. First of all, we have long-term productive strategic relations with Germany as one of our biggest European partners, and our bilateral relations have always been very good, and I hope this will continue. At the same time, we realise that Germany is a member of the European Union, and many of the issues to be settled must be coordinated within the EU framework.

But I think nonetheless that events never develop along such purely theoretical lines. Every decision has its initiators, its supporters and lobbyists, and in this respect I think it can be useful to discuss good ideas at the bilateral level first, and then make the relevant proposals to the EU, European Commission and other organisations that make decisions at the overall European level. And so I see no contradictions in this respect. These steps in no way mean that we want to end our cooperation with Brussels or replace it with cooperation with other countries, even with partners as close and important to us as Germany. But, as I just said, good ideas need to crystallise at the personal level first, and then we can take them further. We have agreed on how to go about this.

Angela Merkel: First of all, concerning the Russia-EU summit in Rostov, I would not say that it was not a success. The summit addressed important issues. We know that Germany is working actively on a number of issues, the visa issue, for example. We discussed our concerns and problems, and we think that it is essential to hold active talks on this matter.

Second, security issues between the European Union and Russia are things we have been working on for a long time now. Mr Medvedev already put forward a proposal in this area some time ago now, and I wondered if it would be possible for us to establish some kind of more practical and rapid mechanisms alongside the OSCE to resolve these issues. We consulted with a number of our European partners and we think that it would be possible to establish a mechanism as an internal European initiative or an initiative within the framework for the security partnership between Russia and the European Union. But there are situations when one particular EU member country discusses this or that issue in more detail, and this is just one of the EU’s work methods. It would be very complicated and not very realistic to expect all 27 EU members to reach agreement among themselves, and only then present this or that initiative to Russia. I think that if one country is willing to take a step forward this is something to be welcomed. 

Regarding the events of the last week, the talk about the euro’s exchange rate, we did discuss these matters. We talked about developing our budgets, looked at where we can make savings, and where we can invest in the future. We have a lot in common in this area. This concerns education and science in particular. Demographic development is another issue that Russia, the European Union and Germany are all working on. We will have the chance to keep discussing the week’s other issues of concern over lunch.

Question: I have a question about visa-free travel. We in Russia were somewhat disappointed by the results of the Rostov-on-Don summit. We have been discussing this matter since 2004, and Russians were promised that within three to five years this issue would be settled definitively. But now we are told that the time has only come now to start detailed discussions on the long-term prospects for abolishing visas. Is this issue never going to get beyond the framework of long-term plans? And what do you as leaders plan to do to speed up this process, if you have such plans? 

Angela Merkel: I stressed again today that Germany takes a fairly cautious line. Abolishing visas is not about Russia specifically, or Germany, but is about our common approach. We take this same approach towards Ukraine and other countries around the world. But I do think that we can make progress on this issue insofar as the individual EU countries are ready. The time has come when we can no longer keep postponing this matter. I understand Russians’ concerns when they ask what sort of good relations is it with Europe if people cannot even travel freely and get to know each other. People in the streets ask this question and I understand them very well. The time has come to start taking concrete steps towards settling this issue. We need to look now at what must be done in order to introduce visa-free travel. For a long time we did not discuss this matter in concrete terms. I think that we have therefore come to an important stage now. I must take the European Union’s defence on this issue though, because it really is a case when each of the member countries has to agree. I will talk with our Interior Ministry and Foreign Ministry to find out what issues they still want to raise with Russia in this regard, so that we can work out how to move forward in settling this matter.

Dmitry Medvedev: I will add just a couple of words. Our position is very clear. Russia is ready to abolish visas. We have changed our internal laws, introduced a new system of registration, biometric data in passports, and have signed a large number of the readmission agreements that are one of the fundamental conditions for being able to abolish visas. The most important thing of all, in my view, is that this really is an exceptionally important matter for people in Russia and throughout the European Union. If we take this step it would make a real quality change to our lives and turn us into genuine strategic partners. 

Regarding the concerns that exist, I know that different countries have their worries, including Germany, as Ms Merkel mentioned just now, but the simple truth of the matter is that we simply need to be more vigilant about who is entering our countries and put more effort into fighting crime. I said today that the most dangerous individuals travel freely even with the visa system in place. They use methods that make it hard for any police force to track them down. And we therefore need to combat them using different methods too, in the same way that we are combating terrorism all around the world. 

But ordinary travel, ordinary people are a different case and must be treated accordingly, and so we hope that the discussions we had at the summit in Rostov-on-Don, and the talks today with my colleague will not only continue but will be stepped up as much as possible, because until we settle this issue we will not be able to build a truly extensive partnership for the future.

Question (translated from Russian): My question is for both leaders. You no doubt discussed the Iranian nuclear programme. What concerns do you have with regard to this situation, including taking into account new sanctions?

And a question for the Federal Chancellor. You spoke about the euro crisis and the need to save. What is most important for you now, and which side of the budget demands the greatest attention, revenue or expenditure? 

Angela Merkel: Yes, of course we discussed Iran. There has been good progress in work on joint UN Security Council resolutions. We have made considerable diplomatic progress in the talks that have taken place. This was not the case two years ago. This is linked to the fact that the Iranian nuclear programme has become a source of increasing concern. We now share the same view of the situation and can expect to see the UN Security Council approve sanctions very soon. Of course we want to give Iran the opportunity for positive development. We have always taken this kind of parallel approach, making offers on the one hand, and on the other making it clear that if no real change is forthcoming sanctions could be imposed. I am very pleased that we can say now that this is a joint position taken by not just the USA, the European Union and Russia, but by China too. This is a big step that the international community has taken.

Second, concerning our country’s future, we spoke about globalisation and competition. In our consultations on the budget we need to look at Germany’s ability to keep living in the future. Will we invest in the areas we think necessary for our future development, or are we in a state where, faced with demographic problems and growing competition around the world, we are not investing in the areas we should be? The government will hold a meeting behind closed doors tomorrow to examine these issues of the future and set its priorities straight. We need to establish the right balance between social spending and investment in the future. This does not mean that we need to increase budget spending. We need to make our social sector more effective. We need to realise that we can spend only as much as we earn. And so we need to make greater efforts to invest in the future. We need to make sure that we spend our money as effectively as possible. We need to ensure that we have balanced spending. I think this is what our citizens want to see.

Dmitry Medvedev: On the subject of Iran practically everything we discussed has been mentioned and there is nothing really I can add. No one wants sanctions, but in some cases we end up having to agree to them. The situation today is that an agreement on sanctions has more or less been settled, and we hope that the Iranian leadership will heed the international community’s voice. They cannot pursue this irresponsible behaviour endlessly, but need to listen to what the international community is saying, need to talk with their partners in the international community. This is the only way to resolve these very complex issues. This is the line we have taken in our dialogue of late. It is true that our positions have come closer together on this issue over these last few years. I think this is very important for the international community’s future and for the future of our relations with countries in Europe, and with other countries too, with the United States and China.

We deal with very complex issues within the G20, but we need to take a common stand on some matters, including nuclear programmes that raise concern, and not necessarily just the Iranian nuclear programme.

But the thing I think we need to keep in mind for the future is that if these kinds of decisions are taken we hope very much that further steps to monitor the situation, decisions on restrictive measures and additional clauses will be made on the basis of international consensus, and not in accordance with this or that country’s personal desires. We have to act all together, otherwise our positions start to diverge, and this would be the wrong direction to take. 

Question: Ms Merkel, you said that a package of measures to stabilise the euro has been approved. Do you think these measures are sufficient, and could you perhaps be more specific about the key measures involved?

Mr President, I have a question for you too. If the euro continues to fall what impact could this have on Russia’s economy, and do you plan to take any preventive measures?

Angela Merkel: The protective ‘umbrella’ for the euro, the measures Germany is taking, demonstrate our political commitment to standing together to defend our common currency and ensure that speculators do not push it into instability. Germany needs a stable euro because without it, it will be much harder to overcome the economic crisis. 

Of course, these measures will not solve all the euro’s problems and countries will also therefore have to carry out their obligations to change the structures of their budgets, because the current situation is primarily due to the fact that some countries have not done enough to guarantee their own stability and this has created the risk of market speculation. The first thing is for countries to implement the measures taken by the International Monetary Fund and the European Bank so that stabilisation mechanisms can be put in place. We are not just talking about temporary measures, but about the need to address the root of the problems. We are buying time, of course, but we need to stabilise the euro and protect our common currency. 

Dmitry Medvedev: The situation with the euro is a cause of concern for our people, our companies, and of course for our decision-makers too, for obvious reasons. We have very extensive trade relations with the EU and with individual EU countries. Many Russians keep their savings in euros. And so we are far from indifferent to this currency’s fate. In passing, I think that the euro is a good invention, despite the current crisis. It was not the euro that caused the crisis, after all. We know where the crisis began and for what reasons. 

There is no point in our going back over all the causes and origins now though. That is something we have been doing in the G20. The most important thing right now is for our European partners to stabilise the situation. A series of complex consultations, in which Germany took a very clear and firm line, as we discussed yesterday, resulted in the stabilisation package that has just been approved, and I hope that this package works and that the general situation in the euro zone will remain absolutely stable. This is important for the euro zone itself, and also for its partners such as the Russian Federation. But I would go further still and say that this is essential for global financial system, because if we were to pull the euro ‘leg’ off the global financial system ‘chair’, I fear that the consequences would be worse than the start of the crisis in 2008. Just as we all followed developments with the dollar very closely we now have our eyes glued on the situation with the euro.

The system of global reserve currencies is not ideal. I have said this many times. I think it needs to develop. New reserve currencies should emerge, and the existing reserve currencies must be strong and stable. We want the dollar to have a normal, stable, and predictable exchange rate, and we want the same of the euro. I hope that the global financial system will find the optimum solution to this situation.

This is something we will discuss at the G20, of course, but as I say, this is not just a European problem or a problem affecting relations between, say, Russia and the euro zone. This is an international financial problem. But I hope the decisions the European Union has taken, and which I have been briefed on by my partners at the Russia-EU summit in Rostov-on-Don, and yesterday by Ms Merkel, will create the foundation making it possible to maintain stability and sustainable development within the EU and the euro zone. I wish our partners success in this difficult work.