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President of Finland Sauli Niinistö (English translation by presidentti.fi): Thank you and good afternoon to all of you.

We have had very interesting and good discussions. The number of issues is reflected in the fact that we will continue discussing several topics over dinner. We have mainly discussed international issues. I sought to draw attention to the problem that we are living through a kind of vicious spiral, from which it is quite difficult to extricate ourselves; perhaps both in Ukraine and in terms of the framework of mutual trust in the Baltic Sea region.

Intense discussions are now under way in Ukraine on the fulfilment of the Minsk Agreement. In a sense, this involves two main issues. On the one hand, there is the security package and on the other the political package.

The problem has been either lack of progress with one of the packages, or that no progress on one package can be made without progress in the other. This leaves us in a spiral in which zero progress can be made.

I have now come to understand that strongly grounded – and hopefully successful – efforts are being made to maintain the ceasefire. From there, perhaps a step forward at a time can be taken in terms of both packages.

What about the Baltic Sea region in particular? We are well aware that, in the Baltic States – and elsewhere – Russia is feared. And on the other hand, Russia views NATO as a major threat. In preventing the continuation of this downward spiral, the key word is trust, the ability to take at least short steps in another direction – that of restoring trust.

A small step of this kind could help avoid accidents, in the context of which I have brought up the much-discussed issue of flying without transponders. We have been aware, or made aware, that this may also present a major risk of accidents. I have proposed that, in the Baltic Sea region, we seek a general agreement to use transponders; that no flights are made without them.

We are also discussing bilateral issues. One of them involves the Krasnyi Bor landfill site, which is toxic. Of course, this presents a risk affecting all inhabitants of the Baltic Sea region. During the dinner, in which our ministers of the environment will also participate, we will discuss ways of making practical progress with this issue. The company Ekokem has been resolving this issue in Finland and I understand that Fortum, which has bought Ekokem, is interested in continuing such cooperation.

We will also be discussing economic relations during the dinner. They too have suffered and the international economic cycle is probably the main reason for this. But there is enough scope beyond these constraints to restore that international business cycle to some sort of equilibrium.

I would like, once again, to thank President Putin for an extremely interesting and open discussion.

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

Indeed, we had a very thorough discussion in narrow format. Hopefully, we will continue our talks with the participation of our respective delegations in the expanded format in the same business-like manner.

I reiterate that we consider Finland our priority partner. Our relationship is based on a solid foundation of friendship and neighbourliness. There have been different periods in the history of our relations. As you may recall, Russia helped Finland gain independence and was the first one to recognise its independence, the 100^th anniversary of which we will celebrate next year. We continue to maintain political contacts, partner-like dialogue, and active cooperation in the sphere of trade and the economy with our neighbour. However, in the wake of certain events, we are suffering considerable losses in this area. The recently held Background information St Petersburg International Economic Forum (SPIEF) St Petersburg International Economic Forum, though, confirmed our Finnish friends’ interest in expanding our mutually beneficial economic partnership.

About 7,000 Finnish companies operate in Russia today and many of them are localising their production. Finland’s investment is almost $7 billion, and Russia’s investment in the Finnish economy is $2.5 billion. We continue implementing major projects, such as the construction of a nuclear power plant with the participation of Russia’s Rosatom in the north-west of Finland. The overall investment exceeds $7 billion.

Finnish companies are actively working in Russia, as I’ve already said. Thus, the aforementioned Fortum concern completed its large-scale $4 billion investment programme to upgrade thermal power stations in Russia’s regions.

We continue working together in shipbuilding. Since 2014 our United Shipbuilding Corporation has owned a Helsinki-based shipbuilding company. Major projects, including high-tech ones, are being carried out there. Sea trials of the world’s first icebreaker operating on LNG and diesel fuel were launched in April.

The President mentioned an environmental project. Indeed, this is an urgent issue and unless promptly resolved, it may become a regional and even an inter-regional problem, which we would very much wish to avoid. We have good relations and an established partnership with Finland in environmental protection.

As for security issues, including those in the Baltic Sea, the President drew my attention to the incidents that are happening there and the situation that has taken shape in the Baltic Sea, and he put forward an initiative to draft a system of trust-building measures to enhance security in the region.

I will remind you that not only Russian aircraft but also aircraft of all NATO countries are flying over the Baltic Sea without switching on identification devices. The number of such flights by NATO over the Baltic Sea is twice that of Russian planes. This is not our invention but statistics.

We agree with the proposal of the President of Finland. Moreover, on my return to Moscow I will instruct the Ministry of Foreign Affairs and the Defence Ministry of the Russian Federation to put this issue on the agenda of the forthcoming meeting of the Russia-NATO Council in Brussels that is due to take place after the NATO summit in Warsaw.

Question: I have a question for both presidents.

Mr Putin, in the three years since you last were here – as you mentioned in the beginning of the meeting – not only the international situation has changed but also the situation in Russian-Finnish trade, which is essentially half what it was.

Despite all the projects you have mentioned, most of them being investment ones, do the presidents have any ideas how to change the situation in the trade sphere, or do we have to await a change in our political relations with the European Union?

I would also like to ask Mr Niinistö one thing. Today, the EU has extended sanctions against Russia. Are the Europeans aware that they could lose access to the Russian market in doing so?

Vladimir Putin: As for the global thawing that has occurred, I think that as Finland is a disciplined and stable partner within European structures, global changes can take place only following fundamental changes in our relations with the EU on this matter.

The damage of mutual restrictions is there, but the decline in our bilateral trade is not so large, it is not half what it was as you said. Finnish exports to Russia have gone down 40 percent and agricultural exports have fallen 72 percent.

In these circumstances, is there any solution without committing a violation? There is – localisation of production on Russian territory, and some Finnish partners do this. For instance, the company Valio has localised 90 percent of its production of foods, which it had previously exported to Russia, on Russian territory.

As to the investment activity that you have mentioned – this is also a solution to minimise the damage from the current state of affairs. There are other, more fundamental decisions. But here you can address London, they will tell you what is needed.

Sauli Niinistö: Thank you for your question. I think we could have done without the news from London as well. Many reasons lie behind the contraction in trade and I think that, despite everything, the international economic situation is the main factor. The fall in oil prices and the weakening of the rouble have also affected the issue in terms of purchasing power.

But surely, also the so-called sanctions have an impact. At this point, I would like to state clearly that Finland is not complying with the Union's solutions in order to follow the law or out of a sense of obedience – we have been involved in creating these solutions. Fulfilling the Minsk Agreement would be extremely important in this sense, and thereby for the economy and trade. And I am delighted that my honourable colleague, the president, put forward a number of ideas on how, in his view, progress can be made with the Minsk Agreement.

Question (English translation by presidentti.fi): The issue of security in the Baltic Sea region has already been mentioned but I would still like to ask President Putin about the military situation in this region. After Crimea’s accession to Russia, tensions in this region went up and Russia openly spoke about building up its military presence in this region. So my question is what does this mean in practice and what is Russia after?

Vladimir Putin: I would like to remind you that Russia never provokes tensions. You started with Crimea. It wasn’t Russia that staged a coup d’etat in Ukraine and it wasn’t Russia that threatened the life, health and security of residents of the Crimean peninsula. Crimea’s reunification with Russia was absolutely bloodless – without a single shot or victim, on the basis of the will of Crimean residents and in full conformity with international law.

After supporters of the coup took this step, which I consider an absolute provocation, they took other steps to escalate tensions in other parts of the world, including Europe and the Baltic Sea region. NATO is moving its military infrastructure to our borders.

A missile defence system is being deployed under the far-fetched pretext of countering the Iranian nuclear threat after this threat has been eliminated and a treaty with Iran has been signed. Radar and anti-missile systems aimed at neutralising our nuclear capabilities are stationed in Romania.

It is well known that the Aegis launch system equipped with interceptor missiles are mainly used for middle-range cruise missiles of over two thousand kilometres. And this can be done absolutely covertly, secretly within a few hours, all you need is to change the computer software. This creates an obvious threat to us that nobody is willing to see. Nobody wants to have a dialogue with us on this issue.

Now there is talk about deploying the same system of radar and interceptor missiles in Poland which is in the Baltic Sea region. What are we to do? How can we neutralise these threats? We will have to respond accordingly. Next comes an announcement that NATO’s force in the Baltic countries will be enlarged. The movements of our troops on our own territory are cited as an example of aggressive behaviour whereas NATO drills near our borders for some reason are not treated like that.

We think it is absolutely unfair and contrary to the realities. What should we do in response to NATO’s buildup of forces? Let me remind you that Russia took a decision and executed it: we relocated our troops 1,500 kilometres away from the Finnish-Russian border. And we have not changed anything so far, things are as they were. Meanwhile, NATO forces in the Baltic states are growing. What are we to do?

The President has voiced proposals on the very first confidence-building steps to prevent conflicts. I have already said that I agree with that. We shall try to initiate a dialogue with NATO at the Brussels summit.

Question: It was reported recently that there are attempts to suspend some more Russian athletes from the Olympics: a rower was found to have doped. And the number of such cases has skyrocketed. I know Russia is conducting its own investigation – investigative agencies, the Prosecutor General’s Office are investigating. But maybe these measure are insufficient. Are there any other ways to defend our athletes, at least the honest ones?

Vladimir Putin: First of all, I would like to say that we should be grateful to our colleagues from the World Anti-Doping Agency, WADA, and take their reports very seriously. We have always fought and will keep fighting all forms of doping. We hope that the information we receive or find out ourselves will be objective in nature.

We should never rely or make any conclusions based on rumours or mere suspicion. We must get the facts. And our Investigative Committee, the Prosecutor General’s Office are checking and work on obtaining the facts.

Needless to say, it is absolutely wrong to proceed exclusively from the testimonies of people who admit that they committed offences and contributed to the spread of doping because they are the offenders that are to blame for this.

And, second, it is necessary to toughen penalties. I discussed this with members of the Government of the Russian Federation just yesterday. We decided to support tougher legislation and penalties and to adopt a law permitting investigative activities. This law will give our law enforcement agencies the right to conduct operational investigations to uncover cases of doping and its dissemination. I hope the next Duma will support this proposal of the Government of the Russian Federation.

Question (English translation by presidentti.fi):A question to President Putin. It seems to us here in Finland that it is Russia that is pushing Finland toward NATO. At any rate, here the prevailing attitude was against NATO but now this issue is being discussed seriously enough. Why is Russia behaving like this? Perhaps you have some specific proposals on enhancing the security of Finns? This question is for President Putin.

And a question for President Niinistö. Finland and the United Kingdom, and Finland and the United States, are currently signing some kind of defence cooperation agreement; could you tell us a little more about the contents of the agreement?

Vladimir Putin: We don’t quite understand what could have caused the concern of Finnish citizens. I’ve already said that we made a decision and carried it out by withdrawing all our armed forces to the depth of 1,500 km from the Finnish borders. Despite all the tensions in the Baltic Sea region or other parts of the world, we have done nothing that could have prompted the Finns to worry. Incidentally, we are doing this in recognition of Finland’s neutral status. Imagine if Finland joins NATO. In this case the Finnish troops will cease to be fully independent or sovereign. They will become part of NATO’s military infrastructure, which will emerge overnight on the borders of the Russian Federation.

Do you think we are going to continue acting like that: since we have withdrawn our troops to a depth of 1,500, they will stay there? But in any event we’ll respect whatever choice the Finnish people make. It is up to them how to guard their independence and ensure their security. We cherish and respect Finland’s neutral status but this issue is not up to us. Paraphrasing a statement by one of my Finnish friends, I could say that NATO would probably be happy to fight Russia to the last Finnish soldier. Is this what you need? We don’t, we don’t want this but you decide for yourselves what you need.

Sauli Niinistö (English translation by presidentti.fi): No dramatic news will come out of the agreement between Finland and the UK, and Finland and the United States, that we heard about today. By and large, they involve an agreement on technical implementation; on things that have already been done in practice.

In this context, I would now like to provide a serious reminder of the fundamental pillars of Finland's defence. In this, the first pillar is a strong national defence and the related willingness. Finland is the number one in Europe in terms of willingness to defend itself and we have also developed our defence forces.

We are engaged in cooperation in the West, have intensified cooperation with Sweden and the European Union, are a partner of NATO and are also engaged in bilateral cooperation, particularly in weapons technology with the United States.

Cooperation with the east and Russia is important to us; we are maintaining an open channel of discussion and, as we have been discussing here, are developing civil cooperation in a number of sectors.

And then, fourthly, there is the security created by international agreements and provisions – an issue we have been concerned about. As a small country, Finland strongly supports and complies with the international system.

 Thank you everyone.