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Prime Minister of Italy Silvio Berlusconi (retranslated): Good afternoon, everyone.

We are here with our good friend Dmitry Medvedev, who has once again come to visit Italy. He has visited our nation many times and it was a pleasure to spend this meeting in a very friendly, cordial setting.

We talked and discussed various issues regarding important situations taking place around the world, and commented on the results of the G8 and G20 summits, in which we participated several weeks ago.

We also had a chance to start discussing international issues. We will resume these talks during our dinner, which will begin a little later. After that, the visit will continue with a slight deviation from our agenda; we will take a tour of the Milan gallery, drink an aperitif, and visit the Milan Cathedral, which President Medvedev would like to see. And after that, we have a choice artwork that we can view in Milan.

I would like to point out that we have over 100 thousand churches, over 40 thousand elegantly furnished and decorated palaces, over four thousand museums, and 2,500 various archaeological sites and historic buildings. For example, La Scala is an historic building, and we will see it. The visit should be expanded a bit, by several hours, because it does not correspond with the beautiful offerings we have here in Italy and in Milan. Mr President has promised that he will return frequently.

You do promise, don’t you, here, in front of this public? Very well, marvellous.

After that, I invite the President to have dinner at my private residence in Arcore and visit the university of liberty, Liberta. This university will begin its work in January or February.

I have already invited Mr President as a speaker, taking into account that he has been active in politics for the last 20 years, working with our friend, Prime Minister Vladimir Putin (incidentally, Mr Putin has already visited the university) and asked the President to give a lecture at this university in the future.

As for our bilateral relations, we have to admit with satisfaction that our turnover increased by 40 percent in the first four months of this year.

Next, we must prepare for what we consider a wonderful event: the Year of Russian Language and Culture in Italy, as well as the Year of Italian Language and Culture in the Russian Federation in 2011.

In addition, we discussed a variety of issues regarding Italian companies working in Russia, and Russian businesses and operating companies, ensuring that our two governments will work to support these companies in every way.

We also touched on international topics. We talked about the Middle East. Who wouldn’t want direct talks to commence as soon as possible following the standstill after what happened in Gaza?

We talked about relations with Iran. Everyone wants to return to the negotiation table. We also talked about Afghanistan in the context of the last conference that took place in Kabul on July 20^th.

As for the G8, we confirmed our common view that it is imperative and expedient to preserve this format, whose framework allows for discussions and important decisions to be made. We agree that this format allows leaders from the eight most industrially developed nations of the world (we meet two or three new leaders of these nations at every G8 meeting) to spend two days together, discussing issues and forming friendships. It lets leaders talk about various problems in the framework of this friendly atmosphere, through one-on-one meetings and general discussions, so that we may resolve problems quickly and effectively, and subsequently go on to discuss these issues over the telephone.

In conclusion, we talked about UN Security Council reform. Within the framework of this visit, we will be discussing this issue in more detail later.

Mr President, as you can see, I have made my opening remarks, and now I am passing the floor over to you, so that you can speak and then we can take questions.

I hope that all the questions will be addressed only to President Medvedev.

President of Russia Dmitry Medvedev: Thank you, Mr Berlusconi.

I am very grateful for this invitation to visit Milan. I have been visiting Italy for various reasons for almost 20 years now. Before, I would come here on vacation and on business, but in recent years, I come here to represent our nation. It just so happens that in all this time, I have never been to Milan, and at some point, this had to be changed.

I am very thankful to Mr Berlusconi for inviting me to have this working visit here, in the north. We are northern people – I, too, come from the northern part of the Russian Federation, and so it is very convenient to have conversations like these not only in our capitals, but in our nations’ other cities as well.

Just now, my colleague talked about what we did. Indeed, everything he said is accurate and I am ready to confirm it 100 percent. These are precisely the topics we touched on. We began with international problems, but we have not yet finished. I suppose that we will continue this discussion during our walk and during dinner. I hope that we will also be able to discuss other issues.

We talked about the G8 and the G20 as formats bringing together key international players and key economic systems.

Just now, Mr Berlusconi said that the G8 is a very convenient format for discussing current international issues, especially since every time we meet, there are two or three new leaders that join us. But there are leaders that have been tested by time, who have participated in G8 meetings many times. One of them – the most experienced – is Mr Silvio Berlusconi. So in this regard, I always watch him carefully during discussions to see what he is doing and how he reacts to various issues, because many events have occurred in recent years. Naturally the G8 is changing, the G20 has been created, but in many ways, the topics that we are discussing remain the same. These include conflict situations, problems related to international terrorism, and states that do not always properly uphold their international obligations. And so, we also discussed these problems today.

We talked about the Middle East, Iran’s nuclear programme, the situation around Afghanistan, the institutions that must resolve these problems, and naturally, the United Nations, which needs to change in accordance with the changes taking place in the world.

The question is, how can this be done? This is the main point of debate. During the G8 summit, which was held in Canada, we discussed this openly and in detail. We do not agree on everything, even within the G8. But what’s important is that we are ready to modernise the work of the UN and the United Nations Security Council.

We discussed a variety of bilateral issues that are constantly on the agenda during these meetings. We talked about how our economies are overcoming the crisis. I was happy to hear what my colleague Mr Berlusconi said about how the Italian economy is dealing with the crisis. It is wonderful to note that the current figures demonstrate that overall, the Italian economy is growing.

I told Mr Prime Minister [of Italy] about how things stand in our nation. Overall, our development is going nicely as well, and our economy is in decent shape. But this does not mean that we have nothing left to do at G20 meetings, because the international financial system has still not been reformed. We have no guarantees against stresses like the ones that occurred at the end of 2008 and so, we absolutely need to continue our efforts to create a modern financial system that meets the interests of all the states that want to develop freely.

We discussed several economic problems, a number of Italian investments in the Russian Federation, and many issues related to Russian investments in the Italian Republic. Overall, consultations like this one help remove some of the problems that the countries inevitably face.

I was pleased to learn about how much the Government of Italy is working to resolve economic challenges. I said a few words about what we are doing in this area and talked a little about how we are conducting the so-called modernisation of the Russian economy, taking into account that we are not satisfied with the way Russia’s economy is structured, even though this year, our economy will grow by almost five percent, which might seem quite good after the crisis. But that is not quite the level of growth that we need. And so, it is imperative for us to make structural changes and modernise the Russian economy. In this regard, I told my colleague, Mr Berlusconi, that it is very important for large European nations – nations with which we have very serious economic relations – to participate in the process of modernising and creating the foundation for a high-tech economy in the Russian Federation. We are ready for this and we would be very happy if our Italian partners helped us in resolving these issues.

So the talks will continue and we will certainly talk about other matters. Naturally, I’m very much looking forward to the tour around the city Mr Berlusconi just mentioned. This will be especially interesting for me since, as I said, this is my first time in Milan. This is a landmark trip for me.

I would like to once again thank my colleague, the Prime Minister of Italy, for his invitation to have my working visit take place here, in Milan.

Silvio Berlusconi: Thank you very much. Thank you.

I would just like to add that there is an issue the President just mentioned: the modernisation partnership between the European Union and the Russian Federation. And this is one of the problems that need to be resolved immediately, because we are all interested in this, and Italy promises that it will certainly help resolve this issue, as well as the problem of visas – Italy will be participating very actively in this process in the spirit of cooperation.

Question: My question is for the Prime Minister of Italy. One issue, which recently has been increasingly discussed at meetings between the Russian President and European leaders, was also taken up during recent talks with the heads of Germany and Finland. I’m referring to the introduction of visa-free regime between Russia and the EU. Back in 2008 you, Mr Berlusconi, said that you would energetically lobby the issue and push for the abolition of visas between Russia and the EU.

Over the past two years has your position changed? And if not, what steps have you personally taken to convince your EU colleagues to abolish visas? When might this be possible, in your opinion? And is there any chance at all to see this happen?

Prime Minister of Italy Silvio Berlusconi: My opinion has not changed – on the contrary, I believe even more strongly that it is necessary to change the current visa situation. There is, of course, some resistance to this from countries formerly part of Eastern Europe, who have a shared history with the Soviet Union, and therefore somehow resist new measures. But from a historical point of view, there are practically no more obstacles to visa-free travel or closer interaction between the European Union and the Russian Federation. We believe this.

Therefore on our side the notion that in the near future we need to find a positive solution has grown even stronger. In my discussion with President Medvedev I personally committed to this, and will raise this problem in all European forums.

I have already appealed to the President of the European Union to put this topic on the agenda of the next meeting of EU heads of state and government in Brussels. I also raised the issue with Vice-President of the European Commission Antonio Tajani, and European Commission President Jose Manuel Barroso. So as you can see, I have been saying at all forums and to all participants in the negotiating process, that all 27 European Union members must adopt a unified, positive position on this issue.

Question: (as translated from Russian): Prime Minister Berlusconi, your government wants to participate as a partner in Russia's economic modernization, inviting a number of different Italian companies to participate in the process. As a Minister, the interim Minister of Economic Development, will you participate in this process and will you shortly appoint a Minister of Foreign Economic Relations?

We also want to ask the Russian President: in which fields would the participation and partnership of Italian companies be most welcomed?

Dmitry Medvedev: Italian companies already are our major partners in various sectors, and what is especially pleasing is that this cooperation occurs not only in oil and gas, but in industrial production as well. And so we have lots of experience in this respect. And in my opinion, it is largely positive.

As usually happens, difficulties have arisen. But if we’re talking about the future, for us it is especially important to involve Italian companies in the high-tech sectors of Russia’s economy. I outlined five so-called presidential priorities for economic modernisation. These are issues related to the creation of new pharmaceutical products, to space technologies, telecommunications, the creation of new industries relating to nuclear technologies and many others. Virtually any of these fields are open to our friends.

In addition, I want once again to draw your attention to the idea of establishing a high-tech centre modelled on Silicon Valley in the United States, near Moscow. It will be governed by a special legal regime, which I talked about again today with my colleague, Mr Silvio Berlusconi. We hope that this centre will be convenient for foreign investors, including our Italian partners. This is a unique decision for our country in recent years.

We have provided for significant tax exemptions. In this sense, there will be special business climate, if you want to call it that. But this does not mean that you need only to invest there. Again, our Italian partners already have a number of very large good projects underway in various industries. Most of these are high-tech projects. This is in fact, by and large, high-tech. The main thing here is to have more of these investments.

Silvio Berlusconi: As regards the question I was asked, we have various industrial groups that are already active in Russia’s economy. I reminded Mr President that one of the obstacles that stands in the way of the development of our economic relations is the bureaucracy Italian businesses face in Russia.

But now the European economy (and I told Mr President about this as well) must carry out a so-called liberal revolution, which could result (particularly in our country) in new rules. These rules would, for example, permit those who want to launch a business endeavour to do so without gathering huge amounts of prior authorisations – right now starting a business is accompanied by a number of measures and requests. In the new regime it will become feasible to start up a business and then visit special representatives in relevant supervisory bodies, who will simply make recommendations and check whether business activities conform to various rules and laws. This is one of the measures we can use to jumpstart the process and overcome the bureaucracy.

I think that the Russian Government has been making efforts to simplify all aspects of the bureaucratic obstacles and barriers that are currently standing in the way of entrepreneurs operating in Russia — both Russian and foreign ones. So when talking about Italian companies and enterprises interested in entering the Russian market, we can be confident of the Russian Government’s desire and intention to simplify bureaucratic procedures and measures that are currently preventing the entrepreneurial spirit from developing.

As for the post of Minister, I think we have already discussed this topic enough. I familiarized myself with everything that the Minister of Economic Development must deal with. I modified the working procedures within the Ministry, and I can now say that next week we will appoint a new Italian Minister of Economic Development.

Question: My question is for both leaders.

In 2011 Russia and Italy are planning to hold their respective years of culture. What events would you single out? Russia, for example, is helping in the reconstruction of L'Aquila [following the earthquake].

Maybe you will oversee certain projects personally, and perhaps you will visit each other more often?

Silvio Berlusconi: We are working on this now. There are still five months to finalize the programme and many ministries are involved.

I know that there will be many initiatives in the field of tourism, Italian tourism to the Russian Federation meaning visits of cultural monuments. In particular, there will be special tours to St Petersburg where, as you know, Italian designers, architects and urban planners worked in the past.

A large part of this project and rapprochement between our countries will take place via television. TV channels will be given the important task of creating a special series of programmes that will describe the various activities taking place within these years of culture, and provide information on the other country’s history and how people live. So in the end both tourists and TV audience will be able to understand better and more deeply what is happening in the other country.

Dmitry Medvedev: It is obvious that Russians are very fond of Italian culture and language. In addition to the huge numbers of tourists which flow both ways, I would like to see these years of culture and language marked not only by tourism, exhibitions, various other cultural events, and reporting these events in the media — although all this is very important (Mr Berlusconi and I talked about making sure that our media pay attention to these events). I also think it is particularly important to draw attention to the study of both Italian and Russian languages, because in general this is very valuable.

Attention is currently being paid to this: there are university faculties in Russia where people study Italian and vice versa. But in order for contacts to become more developed, for us to understand each other better, get better acquainted with other cultural models and each other’s normal everyday life, it is important that young people learn each other’s languages. And it seems to me that this must not only be English despite all our good feelings towards that language – we all try to speak English, some better, some worse – but it would nevertheless be nice to learn other European languages as well. In this case, I am referring to two languages: Italian and Russian. So if this year is marked by an increase in interest in our languages, that would be great. We would like to see this happen.

Question: Good evening! A question for President Medvedev. You said that you wanted Italian companies to be involved in the process of modernising the industry and economy of the Russian Federation.

I wanted to ask what you think about the partnerships that already exist between our countries, for example, between Finmeccanica and Rostekhnologii; Alitalia and Aeroflot or Sollers, that is the companies that already have economic ties? Do you think that these ties can be further developed?

A question for Prime Minister Berlusconi. I want to say that whenever talking about internationalising Italian companies and corporations, especially those working in the automotive sector, we have always seen the desire expressed by Fiat CEO Sergio Marchionne to transfer production of the new car to Serbia. What do you think about this? What is your opinion, Mr Prime Minister?

Dmitry Medvedev: Thank you for your question. I have already said that we have very good relations with major Italian companies and we do not want to see these relationships dissolved into new projects. We would like simply to see them grow, as they say. The projects you mentioned in which Finmeccanica, Sollers and Alitalia are involved, with the participation of Russian colleagues, are just several of the major examples of this phenomenon.

For example, if we talk about the automotive industry, we are currently trying to revive our automobile industry and we are benefiting from the unique expertise of Italian car manufacturers.

I just said to Mr Berlusconi that when I was travelling to the airport I read some data from our statistics agencies. In Russia the demand for cars has almost completely recovered to its pre-crisis level. This is a good sign for Russia because this is a very important indicator — the number of cars that are purchased, along with the number of mortgages taken out, and several other consumer indicators. So as it stands, our market, the car market for example, is one of the fastest growing ones. And we are always pleased to welcome our Italian partners in this regard.

The project that has just begun to be implemented this year is very big. In general, I hope that it will gain momentum and that more vehicles will be involved. Different types have been provided for: both ordinary cars and off-road vehicles. For example, I think that one option for development is just expanding the list of the investments and industries that, for example, are connected with the project in the automotive industry.

Right now this is perhaps not the most pressing topic in view of our other areas of cooperation. Together we are engaged in high-tech projects and, in particular, we are working on Russian regional aircraft. Our Italian partners have already contracted obligations to purchase this aircraft in the future. This is a good project and I hope it will be commercially successful.

Silvio Berlusconi: With regard to the question you asked me: in a free economy and country industrial groups are free to make their own choices and to work where it is most profitable for them. I think the important thing here is that this should not be done to the detriment of Italian production. The desire expressed by Fiat must take into account its current workers in Italy.

So that concludes our meeting. Thank you. We'll go for a walk, sightseeing and cultural tour, and visit the Last Supper [Leonardo Da Vinci's painting].

I want to thank all our guests from the Russian Federation, welcome them, and say that I hope they will be able to come to Italy again on subsequent visits, longer ones, perhaps spend their whole vacations here, including summer ones. This is just a little publicity for my country, but as Crisis Minister the Prime Minister should do that too. Thank you for your friendship. All the best.