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President of Russia Vladimir Putin: Mr President, I am very happy to see you!

You and I meet regularly, and our colleagues work at almost every level – at ministerial and expert level, on foreign policy and economic matters.

Unfortunately, we have seen a small drop in trade turnover. The year before last, it was a little over 50 billion, but last year, it was only 45 billion. Nevertheless, we have good projects in various areas, including high-tech ones such as aerospace and aircraft industry. We are developing contacts in the energy sector, including nuclear energy.

Of course, we have some problems, there are problematic issues, but overall, our work is progressing successfully. I am very happy to have this opportunity to meet with you and exchange views regarding the hurdles in our cooperation and the things that need to be done in order for it develop more quickly.

I am very happy to see you. Welcome!

President of Ukraine Viktor Yanukovych: Thank you, Mr President, for your invitation and for the opportunity to meet and touch base, as they say, because time is running.

Since our last summit in Yalta, nearly all the decisions we made have started being carried out. But as usual, issues pile up that need certain adjustments, and some matters require us to accelerate our joint actions.

As you already pointed out, these are, first and foremost, issues in nuclear energy and high-tech sectors where equipment orders are not fulfilled very quickly. So we will need to make a joint decision in order to speed up the construction of two nuclear power plant units, as we agreed. And we need to make decisions that will speed up these projects.

We also need to bring clarity to the aircraft industry, how we will build our policies regarding our cooperation. This concerns the models for which we agreed to produce aircraft jointly. Actually, we are already doing so, but we probably need to make more strategic decisions that will help us resolve issues for medium and long-term perspective. Currently, the big question is, who is in charge? Because our factories want full clarity on An-70, An-148 and An-124 aircraft.

And of course, we must discuss preparations for the summit or interregional forum, which, as you decided, will be held in Nizhny Novgorod.

Vladimir Putin: We can hold it any place you like, anywhere you would like to go.

Viktor Yanukovych: This was your decision. You chose Nizhny Novgorod, so Nizhny Novgorod it is. We would like to go there. The issue is basically 90 percent ready from our side, with only a few details remaining, and then we need to make a decision.

Naturally, our interregional cooperation is developing quite successfully. And we have given our regions the green light; they reach agreements more quickly than we do…

Vladimir Putin: That’s very true.

Viktor Yanukovych: Yes, due to various factors.

So the traditional issues remain, which we will need to look into, identify the steps for the development of economic integration, cooperation between Ukraine and the Customs Union, because negative processes are developing on both sides, there are seizures, and this is making me unhappy. These are the losses on both sides, and they are the reason for declining turnover.

And, of course, there is the traditional gas issue. Our specialists, whom we have appointed at the working group level, have already made some serious progress. I suppose it is now time for us to sum up the results of these talks, see their consistency or step-by-step plans. Since we have discussed all this many times, I think that today, we need to move forward in resolving these issues.

The weather is the same in Ukraine and in Russia. You have more sun, and we have a little snow. But we are very close… Many things are clear: what needs to be done and how. But what’s most important is that we need to constantly move forward. Today the world is changing very rapidly and we must not fall behind these rapid changes.

Question: Mr Putin, excuse me, but everyone would very much like to know, what kind of integration with the Customs Union will you be talking about, as Mr Yanukovych said? Will it be about Ukraine joining the Customs Union?

Vladimir Putin: Mr Yanukovych touched on this topic on his own initiative. We will surely discuss it. We do not have any restricted topics; we discuss everything, including gas, nuclear energy and engineering. Mr Yanukovych mentioned nearly all the topics, including integration processes in the post-Soviet space.

Last year, we signed an Agreement on a free trade zone in the CIS. Ukraine had insisted on it earlier. We worked together for a long time, but overall, we met halfway and signed it.

As for the Customs Union, our experts and the Ukrainian National Academy of Sciences’ Institute for Economics and Forecasting came to the conclusion that if Ukraine were to join the Customs Union, its GDP growth rate would be between 1.5 and 6.5 percent, depending on the depth of integration.

Mr Yanukovych just mentioned the problems. The more tightly we work with Kazakhstan and Belarus, the more difficult it will be for Ukraine to enter our markets with its traditional goods. Clearly, the President of Ukraine is concerned by this.

Beginning in 2015, we will be restricting workforce movement from nations other than the Customs Union. We have already declared this publicly. Today’s preferential conditions for workforce movement will apply only to the Customs Union nations. Naturally, this is of concern to us – to Russia and to Ukraine.

Together, we will need to think about how to avoid these negative things and do everything to ensure there is no deterioration and that on the contrary, as Mr Yanukovych said, we move forward as regards the challenges we face in the global economy.

Viktor Yanukovych: I can elaborate.

Indeed, Mr Putin and I have been discussing this topic extensively, constantly. The fact is, Ukraine has fallen far behind the Customs Union in creating a regulatory framework, the provisions that are in effect today. This union has been in the process of formation for nearly eight years. Ukraine was engaged in it initially, but then there was a huge break, and as a result, at this time, Ukraine has not adopted a single provision of the Customs Union.

Today, there is a question of cooperation format between Ukraine and Customs Union nations. Naturally, it is impossible to simply make a decision and accede. In this case, we are talking about a process that requires intra-governmental procedures and examination of those provisions, and the actual format of the work with the Customs Union must be determined at four-party talks.

We understand quite well that Russia plays a key role, a decisive role in the Customs Union, so at this stage, we are holding talks with Russia. I think this is the right thing to do, although we are sometimes joined at various meetings by our colleagues from Kazakhstan and Belarus, so today, we will continue discussing this matter.

I have stated publicly that we are interested in examining these documents because there is a great deal of discussion, with experts talking and making various forecasts, and some opposing the idea. Overall, currently, I would say that the process underway is more political than economic. But ultimately, we probably need to engage the governments of Ukraine and Russia; there is the Customs Union’s intergovernmental commission, so we must begin working with it.

And once we actually begin to analyse these documents, there will be full clarity on the issue of joining the Customs Union. All these documents must go through intra-governmental procedures just as they did in all three of the current Customs Union nations. That is what we are talking about.

Vladimir Putin: I fully support what Mr Yanukovych just said. I just want to note that in the Customs Union, we resolve nearly all issues by consensus – at least the key ones. We have built everything exclusively on the basis of taking into account the interests of all three parties, so this process is difficult and requires the participation by Belarus and Kazakhstan.

In terms of socioeconomic aspects, I think that today there are no serious experts either in Ukraine or in Russia who do not believe that this experience is absolutely positive for Ukraine. And as the President of Ukraine said, at this time, the issue lies in political plane – it is a political issue, a political choice for Ukraine itself. And we will certainly respect whatever choice is made.

Thank you.