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The President, among other things, expressed his satisfaction with the work of the St Petersburg International Economic Forum. He noted that one of the discussions dealing with fuel and energy came up with proposals to stabilise the global energy market.

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President of Russia Vladimir Putin: Thank you for your interest in Russia and the St Petersburg Economic Forum. Speaking of which, we can see that this interest is growing every year.

This year the media coverage of the St Petersburg International Economic Forum is wider than over the previous two years. It is very good news.

We established good rapport with our partners in all areas of production, from all sectors of the economy. Just now, I had a very informative meeting with heads of major global fuel and energy companies.

I think their session is not over yet, though they are probably approaching the end. They are sharing opinions on the state of the global energy industry, coming up with proposals on measures to stabilise the global energy market. I asked them to develop proposals regarding Russia as well.

Generally, we are very pleased with how cooperation with our partners is going. Many of them have had a presence in Russia for years. They have significant assets, which increases capitalisation of companies and helps them get access to financial markets.

Some members of the Russian-speaking audience inquired about further improvement of Russian laws, including fiscal policy. We will discuss it with them in early June.

Coming back to this meeting, I would like to repeat that we are very glad you are interested in working in Russia. I would like to congratulate your colleague, Mr Mikhailov, on the 110^th anniversary of ITAR-TASS, the largest news agency in Russia. It is a brand known all over the world. I hope that with Mr Mikhailov at the wheel, the agency will take on a new lease of life – also in international collaboration.

I’m impressed with the attendance of this meeting. Your agencies make up about 80% of the global information flow. Your influence on the global and national news agenda cannot be overstated. You have great influence that is dispersed by your colleagues throughout the mass media – both print and online media outlets. I hope that today we’ll be able to discuss some current issues and talk about building relations with Russian government institutions and your colleagues in the Russian market.

I think this is all I want to say for a start. Thank you very much. I suggest we begin an informal question and answer session. I hope you have questions, we can discuss them, and I will try to give you comprehensive answers.

Please.

Sergei Mikhailov: Mr Putin, thank you very much for the opportunity to have this meeting. I think it would be fair to give the floor to Florence Biedermann from France Presse, the oldest French agency with an almost 200 year history, as the only woman at this table. It just so happens. Go ahead please.

Florence Biedermann (retranslated): Mr President, you will soon go to France to attend the 70^th anniversary of the allied landing in Normandy. Will you hold separate meetings with the heads of state that will be present there? And may I ask you one more question on a different subject. Will you consider the elected president in Ukraine legitimate?

Vladimir Putin: The first point. The trip to Normandy will be restricted to the occasion on which we will all meet. Indeed, the President of France has reaffirmed his invitation and it was, of course, accepted with gratitude. During World War II our countries were fighting Nazism together. As you know, Soviet and Russian peoples contributed much to the altar of this common victory and so it is quite natural that we all meet in Normandy. We are to give credit to our allies in the coalition – the Americans, the British and the French. We remember French Resistance fighters and the direct participation of the French in World War II, including the legendary Normandie-Niemen.

Will there be any meetings on this occasion? As far as I understood, the French President would like to hold a separate meeting to discuss issues of bilateral relations and the international agenda. Naturally, I’m open to any talks. If the schedule of the French President permits, I’ll be pleased to meet with him and discuss subjects of mutual interest. This is the first point.

Your second question is about recognition or non-recognition of the election in Ukraine. I replied in detail to this question yesterday. One of your colleagues tired me out trying to approach this issue from different angles. I’ve already answered this question and can repeat what I said.

I believe it would have been more logical to fulfil the agreements – at least in narrow format – that were reached by President Yanukovych and the opposition on February 21 of this year. There was no point in calling into doubt from the very start even some aspects of the legitimacy of the future Ukrainian authorities on the grounds that a presidential election cannot be held with the legally operating Ukrainian President. This is an obvious fact – it’s enough to open the Ukrainian Constitution to see what is written there.

In this context it would have been more logical and, in my view, more serious to first hold a referendum, then adopt a constitution and then hold elections based on the new fundamental law. However, the current authorities in Kiev and those people who control the power have decided to follow a different course. They want to stage the election first and then deal with constitutional amendments. It is unclear for the time being what amendments they have in mind – this is always an issue of debate and certain agreements in society.

You know what I think? The people who are controlling the power in Kiev and the main presidential candidates are still different people. Maybe those who are in charge today are not interested in the new president being completely legitimate. This may be the case. After all, they are engaged in a serious internal political struggle. In the end it’s up to Ukraine, its domestic business. I can just repeat what I said yesterday: we’ll respect any choice made by the Ukrainian people.

Florence Biedermann: As far as I understand, President Yanukovych will remain the legitimate President, even after the election. I’m talking about legitimacy.

Vladimir Putin: You know, we can all read. Let’s open the constitution and read it. We are grown-up people, we can read. Take the Ukrainian constitution and read it. It says that there are four legitimate reasons when an incumbent president has to go. They are: death, a serious health condition, impeachment – and there was no constitution-based impeachment – and resignation, when the president hands in his resignation to the Parliament. So we either stick to the constitution or dismiss it.

My point is they should have dealt with this issue first. But the current Kiev authorities had a different plan. All right. In any case, we are interested in stabilising the situation. What are they saying now? They are going to adopt a new constitution. If so, a newly elected president might still be a temporary figure or, on the contrary, he or she will take over all the power. Beyond doubt, both scenarios will only aggravate the political struggle in the country.

As I said, we will by all means respect the choice of the Ukrainian people and will cooperate with the authorities that will come to power as a result of the election.

Sergei Mikhailov: Please, colleague from Xinhua, which means “New China”, by the way.

Vladimir Putin: Yes. Excuse me, I would like to ask Florence: are you satisfied with my answer?

Florence Biedermann: Yes, I’m satisfied.

Vladimir Putin: Merci beaucoup.

Sergei Mikhailov: Please, Mr Zhou.

Zhou Xisheng: First, I would like to start by congratulating you on the successful talks with Chinese President Xi Jinping. The joint declaration on their results states that China-Russia relations advanced to a new level.

What I wanted to ask is how relations between Russia and China can play, as you have said, a bigger role in promoting stability in international relations and the development of our two countries?

My second question is how do you expect the upcoming 70^th anniversary of the victory in World War II to impact the situation around the world and how can we celebrate it?

Vladimir Putin: The meetings in Shanghai several days ago and the documents that were signed prove without any doubt that relations between the People’s Republic of China and the Russian Federation have advanced to a new level. Over the recent years, we noted on numerous occasions the high level of cooperation between our countries, but with the results that were achieved in recent days in Shanghai and the agreements that were reached, we have every reason to believe that yet another step has been made in enhancing our trust-based dialogue and bringing our strategic partnership to new heights.

This is not just about the gas supply contract, although it goes without saying that this was a landmark achievement, and experts were right to point it out. For Russia, the importance of this deal is comparable with the decision by Soviet leaders and heads of the Federal Republic of Germany to enter into the famous “gas for pipes” contract back in the 1960s. Today, Russia makes the necessary products on its own, including large-diameter pipes and big pipes. For Russia, this is an opportunity to gain a foothold in the Asia Pacific Region and its large market. As you know this contract is valued at $400 billion. It will make gas infrastructure development across Russia’s Far East and Eastern Siberia economically viable. This is what matters the most for Russia with respect to this contract.

For the People’s Republic of China, this contract is expected to reduce energy deficit, which is also crucial. As I said yesterday, we share the concerns of China’s leaders regarding the need for reducing air pollution in major cities. As we all know, natural gas is the most environmentally friendly hydrocarbon resource. We really hope that our cooperation will help improve the environment in major Chinese cities.

The next step would be to enter into a similar deal for the so-called Western Route. The first contract is about delivering gas to the eastern part of China, while the second contract could target the west. The first contract will be served by Kovykta and Chayanda deposits that hold a total of 3 trillion cubic metres of gas, which is expected to last 30 years. To tell you the truth, we are confident that it will last at least 50 years. Deposits that could serve the Western Route are located in Western Siberia. This project is expected to be cheaper. Since all the main issues regarding price calculation, price formation and government support and benefits for this project have already been addressed by both sides, the second project, if greenlighted by China, could be implemented even faster than the Eastern Route project. Of course, it will all depend on the People’s Republic of China and its need to develop specific regions. So this is a separate topic.

That said, our cooperation does not boil down to energy and hydrocarbons. We continue active discussions on nuclear power, ambitious cutting-edge projects in the energy sector, including renewables. We attach great importance to cooperating in high technology, aircraft construction, space exploration and medicine. Joining efforts on monetary and financial issues is very important for both China and Russia.

There is no secret that the People’s Republic of China and the Russian Federation have large foreign currency reserves. China ranks first globally in this respect. It is of utmost importance for us to ensure that these funds are placed rationally and safely. We must join efforts in finding ways and means to ensure that, especially bearing in mind the challenging global economic environment and market turbulence we are currently witnessing. We must ensure and guarantee that these reserves are safe and used rationally and efficiently. Using national currencies, the yuan and the ruble, in international settlements is another topic. We have made the first modest steps in this direction and we will continue exploring opportunities for working together in this segment.

We also discussed many other opportunities including in agriculture, trade and regional cooperation, and we are committed to further promoting them. Significant advances were achieved in all those segments. I would like to commend the President of the People’s Republic of China Xi Jinping on the special role he played in facilitating these agreements. It was his direct support that paved the way to some of the visit’s achievements.

Sergei Mikhailov: Next question. An agency you must know very well – DPA, which accounts for 95% of the German market. All German daily newspapers use DPA. Go ahead please, Mr Mauder.

Ulf Mauder: Yes, I can even say 100%, which is something we are proud of. I will try to speak Russian now. Thank you for this opportunity. There are concerns in the West, Germany included, mostly related to Russia’s political course, the reliability of partnerships and trust. We have been discussing these issues at the forum. As for natural gas, this is probably the biggest issue between Russia and Germany now – whether there will be enough gas left for the West, given your big contract with China. You might also speak about what this would mean for your other projects – the South Stream pipeline and the additional Nord Stream lines. They will have to… Or do you not speak about these anymore?

There is a second question too. We have already talked about Ukraine. I am very interested to hear your assessment of Russian-German relations. You often talk on the telephone with Chancellor Angela Merkel. What can you say about the German Government’s response to the Ukrainian conflict?

Vladimir Putin: Let’s start with the economic issues. As for our relations with our Chinese partners and friends, and our relations with our European partners, including Germany – once we begin executing our contract with China, that country will become an equal consumer of Russian gas, just like Germany. Russia will supply similar volumes of the fuel to both customers: Germany currently consumes about 40 billion cubic metres of Russian gas annually, and China will buy around 40 billion too.

Yet, if we implement the so-called second project with China, where Russian gas will be shipped to them along the Western Route, China will become our largest gas partner. The first contract, which uses the Eastern Route (I’ve already mentioned this but I’ll repeat it to make sure everybody understands), will not affect Russia’s supplies to Europe in any way. It involves gas extracted from new fields in southern Yakutia and Irkutsk Region, which are not even used yet. We will have to tap these new fields, build all the field facilities and pumping stations, arrange pipeline transport, connect them to the power supply and build roads – it’s a huge project. I already said that it would be the biggest construction project with Russian investment, totalling $55 billion, and with our Chinese partners contributing another $20 billion to build the facilities on their end. This has nothing whatsoever to do with Europe. The second distribution route is only being discussed with our Chinese colleagues. It is at the negotiation stage and no contracts are envisaged yet. But I think it will be implemented eventually. That project will use the resources of Western Siberia, which is where all the gas currently supplied to Europe, including Germany, comes from. However, you shouldn’t be concerned about this either, because – sorry, my figures might not be precise – Gazprom produces about 440–450 billion cubic metres a year now, and they can still raise production to 650 billion cubic metres. This area holds sufficient reserves. We’re not producing more because we don’t have customers for such a large volume of gas, but once we have them, this level will be fast and easy to achieve. We’ll boost production.

As for the planned supplies to China over the Western Route, we have not agreed on this yet, but the volume will certainly be less than 200 billion cubic metres. The additional 200 billion cubic metres of gas we can produce will certainly be enough to supply to China and to increase supplies to our European consumers, and even to meet the growing needs of the Russian economy.

As I said, it is very important for us. As soon as we finalise the eastern project we will be able to connect the pipelines in Western Siberia and European Russia, and in Eastern Siberia and the Far East. As a result, we will be able to deliver gas between Russian regions – and eventually, between European consumers and the Far East and the Asia-Pacific. I believe it will be a breakthrough in the global energy sector. Economic issues will be much easier to tackle, without any political implications.

Reliability is key. Even in the most critical times during the Cold War, the Soviet Union never – I want to stress this – never cut off supplies to Europe, including Germany. And the Russian Federation is doing the same. There was one incident in 2009 when illegitimate – I want to stress this – and unfair requirements from Ukraine, a demand for an unbelievable price cut for the Ukrainian supplies, resulted in Ukraine’s refusal to transit Russian gas to Europe.

You know, you can either write about these facts or hold them back as it often happens. But we all understand: Russia is interested in supplies to reliable customers who will pay the agreed price. Do you think we would stop delivering gas to Europe when this would only damage our interests? Nonsense, it would be suicidal. But when Ukrainian partners refused to transit our gas and just stole it from the transit pipeline, what were we supposed to do? Stop delivering gas to Ukraine. You have to pay for what you get. And now we can see that, despite the fact that the 2009 contract took a great deal of effort to agree, we are experiencing new problems.

The contract is clear and it was published online a long time ago, by Ukraine. It might be complicated for an average person but experts will have no trouble understanding it. All you need to do is read it. Russia has not breached this contract, not in the slightest detail.

Now we hear that they could even damage our pipeline or stop paying again. What do they mean, stop paying? They have not paid us since last July! Our Ukrainian partners stopped regular payments last July.

Now they are saying we must reduce the gas price. Why is that exactly? There is nothing about price cuts in the contract. If we want to act according to market rules, they must fulfil their contractual obligations. We do, in full.

These are the facts. We gave them a discount of $100 per 1,000 cubic metres at some point as a payment for our fleet’s base in Crimea. Let’s say, there are those who don’t recognise Crimea’s accession to Russia as democratic. Perhaps, they have their own reasons not to recognise Crimea’s right to self-determination. Let’s not go into that right now.

So what happened? We were supposed to start paying for the Russian fleet’s presence in Crimea after 2017 because until then, there was an agreement between Russia and Ukraine. We paid $95 million a year to station our fleet in Crimea. By the way, we already paid $95 million for this year. Starting from 2017, we were to agree on further payments. So we agreed to make a $100 discount on gas as a payment for our fleet’s presence in Crimea, and we were to start supplies at this discount price in 2017, in 2018 even. But in fact, we gave them a discount in 2010, as soon as the agreement was signed. Why? Just because our Ukrainian friends asked us to do this as a measure to support the Ukrainian economy. So, we have been paying for our fleet’s presence in Crimea for over three years now: 2010, 2011, 2012, 2013 and the first quarter of 2014. But if these terms were to come into force only after 2017, it means we have actually already paid for 2018, 2019, 2020 and the first quarter of 2021. And that’s not all. The contract providing this discount is valid until 2019 while we already started paying for 2021. How can they possibly even complain? We have been unbelievably generous and extremely cooperative with our Ukrainian partners. This is the first point.

Now the second point. We saw that last year the Ukrainian economy was not doing well at all and starting in July, as I’ve already said, the former government stopped regular payments for the required amount despite our very warm relations with them.

Under the contract we could have instantly switched to the advance payment format. The contract states directly that if payment for the previous month has not been made in full, we can introduce advance payment for the following month. In other words, they would pay us up front for gas and we would supply them with the amount they paid for. This is very simple, but we didn’t do this. We wanted to help our customer rather than lose it. We waited through August, September, October and November but still wanted to help our customer. But there were no full payments – just partial all the time.

Then they asked us to give them additional aid. First, they asked for a loan – $3 billion in the first tranche so they could pay the 2013 debt. They told us it is difficult for them to pay even the price they had been paying and asked us for an addition discount – minus another $100 (thus, the price was established at $268.5 per 1,000 cubic metres). They guaranteed full regular payments at this price. Gazprom agreed to this but on mandatory observance of the condition to make regular current payments every month. They paid in January, paid half in February but nothing in March – zero, even at the lowest tariffs and with all the discounts. At that point we told them (the new government had already come to power): “Look, we’ve agreed with you that if you don’t pay in full, we’ll cancel all the discounts.” And this is what we’ve done.

I’d like to emphasise that there is nothing political in this. After all, we cannot supply our resources for free to a 45 million-strong country. I said at the session yesterday – we’ve already supplied Ukraine with about 10 billion – I think 9.8 billion – cubic metres of gas for free. This was a free shipment and it amounts to what we deliver to Poland in a whole year. This is simply unprecedented.

Today our partners are telling us they won’t pay until we give them discounts again. First, they have no right to demand this – the contract doesn’t envisage such demands and it is valid, and second, we’ve agreed that we’ll give them discounts if they make regular payments.

But I’ll surprise you even more now. We’ve already told the new authorities: “All right, we understand your predicament and we’re ready to meet you halfway and discuss potential discounts if you pay at least for the debt that you accumulated when these discounts applied – before April1, 2014. You’re asking us for a lower price but pay at least what you owe us for the period when the discounts were valid.” But they are refusing to pay this as well.

There is a limit to everything. We’ll see what will happen after the new government is formed, after the election. But to make sure no one accused us of plunder, Gazprom warned, and I did too, that under the contract Gazprom will switch to the advance payment format. I sent a letter to the heads of state and government of those countries that receive our gas and then sent them another letter to this effect. Some European leaders replied: “Please be patient, just wait a little longer. Ukraine will receive its first IMF tranche and will pay you.” But it hasn’t paid. They’ve swallowed our money – three billion – without paying a single dollar; they’ve received money from the IMF and haven’t paid anything either.

So, we’re ready for a constructive dialogue but it should rest on a civilised market-based foundation rather than some unjustified demands and ultimatums.

Now I’d like to say a few words about our relations with the Federal Republic. We have full-fledged relations and I think they are very important both for Russia and the Federal Republic of Germany. Based on tentative estimates (I’ve already quoted this figure), some 300,000 jobs in Germany have been created as a result of our bilateral economic cooperation, not to mention our energy contacts. Therefore, I firmly believe that we should be very careful in approaching our relations and should keep them immune to the current political circumstances. Nobody knows who is right in these political disputes. I certainly believe that we are right.

As for our positions in negotiations, we are executing our contact with the Chancellor. I have very warm relations with Ms Merkel – at least up to this day – both on the personal and business planes. We’ve always managed to find points of contact and reach a compromise on disputable issues. We intend to do so in the future. Thank you.

Sergei Mikhailov: Mr Putin, let’s get back to Asia. Our colleagues from India represent Press Trust of India (PTI), the largest media agency in India. Mr Chandrasekar is Executive Editor. You gave him an interview a few years ago. Please.

Vanakambadi SUNDARARAMAN CHANDRASEKAR (retranslated): Thank you, Mr President. I have a short question on Ukraine related to India. The Indian Government did not support the sanctions and other measures that Europe and the US Government took. What is your reaction to that?

Number two. We have a new Government elected in India, and as I understand you congratulated the newly elected leader. He spoke of the importance of cooperation with Russia in his address. What is your reaction to that?

And number three, on the Kudankulam nuclear power project. Have all the issues been resolved on units 3 and 4? The nuclear liability clause, has it been resolved with India? Thank you.

Vladimir Putin: Regarding the first question, you know my opinion about the sanctions. I believe they are totally counterproductive, not based on a fair view of the existing issues and are motivated by the wish to impose the development of international relations on Russia that would contradict both international law and our mutual interests – even their own. Clearly, it would be against Russia’s interests.

Some of the recent events in Ukraine directly threaten our interests, first of all with regard to security. I’m talking about Ukraine’s potential accession to NATO. As I said earlier, such an accession could be followed by the deployment of missile strike systems in Ukraine, including Crimea. Should this happen, it would have serious geopolitical consequences for our country. In fact, Russia would be forced out of the Black Sea territory, a region for legitimate presence in which Russia has fought for centuries. And those who started the coup in Kiev – if they are indeed experts – should have thought about the consequences of their unlawful ambitions.

I hope this precedent, although with its negative implications, will eventually restore a responsible attitude to the rule of international law and encourage the parties to work on agreements and consider each other’s lawful interests through negotiations, without using force to resolve disputes. Supporting a coup that is against the Constitution is exactly what I see as using force.

What happened there? I was talking about this yesterday. We were in the middle of a constructive, though complicated, but totally diplomatic discussion. Yes, we tried to persuade our European partners that the Association Agreement between Ukraine and the EU in the proposed form would pose a certain economic threat for us. We tried to convince both Ukraine and Europe. But, as I said yesterday, we were told that it’s none of our business and a third party must not interfere in the relations between Ukraine and the EU.

We had documented evidence to argue that they were wrong and that Ukraine was part of a free trade area as a CIS country, something that would directly concern our interests. We were told that no, you are not a party in this process, we are not going to discuss it with you.

Eventually, when we managed – I will stress it, by absolutely diplomatic and civilised means – to talk the Ukrainian officials into holding further talks with Brussels, our Western partners encouraged an unconstitutional regime change. This is exactly what I call resolving disputes using force. And we responded to this force. Why? I told you why. Because the interests of the Russian nation and the Russian state were at stake. Those who started this should have thought of that.

I will repeat it again, there are many negative aspects to this. But I hope that this will prevent us all from even more serious incidents and conflicts.

Speaking of India’s stance, we are, of course, grateful to the Indian Government and the Indian people for their level-headed stance. I’m glad the Indian Government considered the historical and the current political aspects in approaching this issue. I’m glad they based their opinion on these fundamental principles, including the importance of Russia-India relations.

We appreciate it. I said this to the former Prime Minister and confirmed it to the newly elected leader in a recent telephone conversation that we will continue to fulfil all of our previous agreements in the economy, culture and defence. Our countries have an extensive range of partnership projects. So far, and I mentioned this yesterday to the representatives of Indian business community, the trade turnover is fairly modest. Increasing it will require a cooperative effort. But the prospects are great, I would even say massive. We will do what we can to make these prospects reality.

Thank you.

Sergei Mikhailov: Mr Putin, you know the next participant of this meeting well: John Daniszewski from Associated Press, the United States.

If I’m not mistaken, in two years Associated Press will celebrate its 170^th anniversary, and John has been working for AP for 35 out of these 170 years. Go ahead, John.

John Daniszewski: Greetings, Mr President. It’s been more than two decades since the end of the Soviet Union, and during that time many roots and shoots of cooperation and contacts have grown between Russia and the United States. Russians are living and doing business in America, American law firms, banks and oil companies are active here. The world has changed.

But now we have this breach over Ukraine. Where do you think we’re going? Is it the beginning of a new Cold War? Is that something that needs to be avoided now?

Vladimir Putin: I would not like to think of it as the beginning of a new Cold War. No one is interested in that and I don’t think it will happen.

The crisis in Ukraine is still unfolding. I have just outlined my vision. It is true that we interact with the United States using many tools.

To be honest, John, such interaction is efficient only when these tools are actually used. If certain platforms were created to promote joint efforts, these platforms should not be about just getting together for a cup of tea or coffee. Such platforms are expected to pave the way to solutions and compromises. However, if Russia’s only benefit is that it has been allowed to be present during discussions, Russia can’t accept this role.

I think that we have every right to put the question this way. We always take heed of our partners’ interests, and almost every time our answer is ‘yes’. There are certain red lines that we can’t allow to be crossed. Ukraine and Crimea are such a red line.

I’ve already elaborated on this subject, but since you represent one of the world’s largest news agencies, I will reiterate: where are the guarantees that the government coup, this another colour revolution that happened in Ukraine, won’t be followed by NATO’s arrival to Ukraine?

Nobody has ever discussed this issue with us in the past two decades. I’d like to emphasise that nobody has conducted a meaningful dialogue with us on this. All we heard was the same reply, like a broken record: every nation has the right to determine the security system it wants to live in and this has nothing to do with you. Take the issue of missile defence systems. What haven’t we proposed, what options of cooperation haven’t we come up with! But the response has been the same, like a broken record: these systems are not intended against you. But when we start proving, documents in hand, that these systems are intended precisely against us because all antimissiles deployed in certain areas can reach the launching pads of our ground-based ballistic missiles, the dialogue comes to a halt. There is simply no substantive discussion. Who will guarantee that tomorrow some missile defence elements do not appear somewhere in Crimea, or would have appeared if the people of Crimea hadn’t voted for joining Russia in the referendum? There are simply no guarantees.

So, you’re right in saying that you have many tools for conducting dialogue and seeking solutions. But these tools should not be used pursue the agenda of only one country but to search for compromises that would be acceptable to all participants in this process with due consideration for each other’s lawful interests.

Dmitry Peskov: I beg your pardon. We’ve been on the air for almost 45 minutes. This is a live broadcast.

Vladimir Putin: If our colleagues want, we can go on. Go ahead.

Dmitry Peskov: Live?

Vladimir Putin: For God’s sake! Please go ahead. Whichever you want – live or otherwise.

Sergei Mikhailov: All right.

Vladimir Putin: Please.

Sergei Mikhailov: Now we have Spain and the EFE news agency, which can deservedly call itself the biggest agency in the Spanish-speaking world. Jose Antonio Vera, you have the floor.

Jose Antonio Vera (retranslated): Thank you, colleague. Mr President, it seems from your words that you do not think tomorrow’s election in Ukraine will substantially change the situation. In other words, you have little hope that the election could help to resolve the situation. What’s more, if the election does not take place in the eastern regions, which it seems will be the case, you are worried that the West might impose new sanctions. If this happens, how would you respond? Do you think that Russia might encounter international isolation? Finally, do you see any threat to you personally and to your policies? It seems unlikely that tomorrow’s election will be able to turn the situation around. Some believe that this election could lead to new concerns in the West and new unrest in eastern Ukraine. Do you think Russia will end up in international isolation? Do you think this is possible? Are you prepared for possible political measures against yourself personally? 

Vladimir Putin: I make my decisions based on only one principle, and that is the interests of Russia and its people. It was the interests of our country and people that demanded that we make an adequate response to primitive and unprofessional attempts to act against our interests using force, and our partners should have taken this into consideration earlier.

As for isolation, first, we think that we are in the right in this dispute both in terms of substance and in legal terms. I have already cited the Kosovo precedent as an argument for our position. As you know, Kosovo’s decision on state independence was taken by its Parliament, and in Crimea the decision on state independence was based on the national referendum that asked people if they wished to remain a part of Ukraine or join the Russian Federation. Only after the vast majority of Crimea’s voters – more than 90 percent – said that they want to join the Russian Federation did the Crimean Parliament declare state independence.

Let me note too that the Crimean Parliament that took this decision was formed on the basis of Ukraine’s laws in all legitimacy before the crisis related to the power change in Ukraine and the problems with Crimea began. The deputies were elected earlier and this was a legitimate body that had the right to make such a decision. Of course, you can choose to ignore all of this and feign not to notice or understand particular people and circumstances. But we are in the right and no one will convince me that based as it is on our lawful rights and interests and in accordance with international law, we should change our position on this matter.

Second, I think that isolation of a country like Russia would be more illusory than anything. It is not possible. You are in a position to analyse who takes what view of events and who takes what attitude towards Russia today. Yes, we have a lot of interests with Europe and the United States, a lot of trade. Trade is lower with the USA – only a bit over $27 billion, but we have trade worth $440 billion with Europe. We are thus mutually dependent on each other. We can probably cause quite a lot of damage to each other. But who needs this when there are difficulties as it is in the global economy? This is all the more so as our position is fair and people in Europe can see this for themselves. If you were to conduct a public opinion survey in Europe I am not at all sure that the vast majority of people there support their governments on this matter, and I have every reason to believe that many people support our position. In the end, it is the people who are the source of power.

So as far as possible consequences go, they would be negative for everyone and could provoke turbulence in the European, Russian and global economies, and this is not in anyone’s interest. Yes, this could cause damage of course, if they really start taking crazy measures of some sort, but I do not see any grounds for doing so.

A package of sanctions was imposed in response to our actions in Crimea. I think this is unjustified and unlawful, but it has been done. Now we are told that things depend on Russia taking certain steps and acting or not acting with regard to Ukraine overall. But what steps, what action? What is it we have done in Ukraine that we are now being held responsible for? First we were told that our special forces are fighting there, then everyone realised that we have no forces there. Then we heard that Russian instructors were present there. Then they looked into the situation and established that no instructors are there. So what’s the problem? Are we supposed to cater to others’ political and geopolitical interests? We will not do this.

But we want and are ready for cooperation as equals. I think that a large part of the European public and the American public too share this desire. Many people in government circles in these countries understand the situation very well in fact and do not really want confrontation, and there are no grounds for confrontation.

Go ahead.

Sergei Mikhailov: We now come to Italy’s biggest news agency ANSA and Giuseppe Cerbone, its CEO.

Giuseppe, go ahead with your question.

Giuseppe Cerbone (retranslated): Thank you, Mr President, for receiving us here in your native city. Tomorrow is election day in Europe, in Europe’s biggest countries. Today, with nationalism and populist tendencies on the rise, I would like to know your views on what sort of relations between Russia and the European Union are possible, and what sort of relations, given the growing trade between Russia and Europe, would be advantageous for both sides. Thank you.

Vladimir Putin: Nationalism and trade. I’d be grateful if you could repeat your question.

Giuseppe Cerbone: Yes, of course. What I wanted to ask was, do you think that the growing nationalism and populism in Europe could affect in any way your views on trade with Europe in general and with individual countries? I hope this makes the question clearer.

Vladimir Putin: Growing nationalism and populism is not our problem, you know, but is a common problem. We have these issues to address here in Russia too, but I hope you do not think that Russia is to blame for the growing nationalism and populism in some European countries. This is the result of domestic policy mistakes, mistakes in ethnic policy and labour relations policy.

I doubt there’s any need for me to repeat commonplace knowledge that bringing in migrant labour to solve this or that economic problem often runs up against the opposition of local people who worry about losing their jobs, incompatibility of cultural traditions, and, to be frank, migrants’ failure to observe the cultural traditions of their host countries. But, guided by their own notions of justice and tolerance, the authorities in some countries, in many countries, do not take timely measures needed to address these threats.

Many years ago, I said to many of my friends in Europe that if you continue this way and do not take into account public sentiment in your own countries, a rise in nationalism will be inevitable. This is what is happening now. True, those were private words I spoke back then, in personal friendly conversations, but what I spoke of then is what we are seeing now.

Russia in this respect is not an exception. We are seeing similar problems here and we have not always managed to make timely and competent responses to these issues. But as far as this could affect our relations with European countries, especially our economic ties, I do not see any big threats. I think there are no dangers here.

If you take our relations with Italy, for example, we have very solid, very good ties built on a pragmatic approach. It seems to me that there is general consensus in both countries about our relations. No matter what party holds power in Italy, they all seek to develop relations with Russia. I think the Italian people sees that Russia in the same way seeks to develop ties with your country.

That is not mention the humanitarian side of our relations. We have tremendous respect for Italy’s cultural heritage and for what is happening today in humanitarian sectors such as arts and education. We have great respect for and interest in all of this, and this is a tradition in our country’s cultural life. In this respect we have a lot in common.

Our economy is showing quite energetic growth and our trade with Italy is growing, which says a lot. In many sectors Italy can offer us things we do not find in other European countries. For example, developing small and medium-sized business is one of our problems, but Italy is one of Europe’s leaders in this regard. Italy has made a big contribution to this sector in Russia, and we are grateful for this and will of course do all we can to support this work, as in other sectors too, including energy. 

Ulf asked before about the Nord Stream and South Stream infrastructure projects. Italy is taking equal part with Germany and France in the South Stream project. Of course we will carry out this project. If we encounter further problems with South Stream and Brussels keeps creating obstacles for the project, we will look at other possibilities such as going through countries that are not EU members. This would simply mean that the European Union ends up with yet another transit country. I don’t understand why those people in Brussels are doing this. But we are committed to carrying out the Nord Stream and South Stream projects, if we can do so without hindrance.

Incidentally, we built the Nord Stream pipeline but are not allowed full use of the OPAL [Baltic Sea Pipeline Link] system. We are allowed only half-capacity use. Why is this? It’s just nonsense. We invested billions of dollars in the construction to bring the resources to Germany, but once on German soil we can only work at half capacity because they let us into the OPAL system only to this limit and then only as an exception on the basis of a decision by Germany’s government. But to be honest, this is nonsense. It is quite hard to work in these conditions, but we will continue our efforts of course, continue to seek agreement with our partners, including the Italians.

Thank you.

Sergei Mikhailov: Mr Putin, the legendary Reuters agency, now Thomson Reuters, is the world’s largest news agency publishing across 130 countries in 19 languages and producing over 1,000 photos daily. Paul Ingrassia is Editor-in-Chief for Reuters, and a Pulitzer Prize winner, which should be given special notice. Please.

Paul Ingrassia: Thank you Mr President for having us here today. I must point out that I’m the Managing Editor, not the Editor-in-Chief; I didn’t mean to be promoted on the spot.

My question is this. Some commentators in the West have said that they believe your ultimate goal is to recreate much of the former Soviet Union. Or as much of it as it is possible. What do you have to say about that?

Vladimir Putin: Is that what you think or what they say?

Paul Ingrassia: This is being commented fairly widely, not by a majority of commentators but by some important commentators in the West. In any event, I just would like your thoughts on the question.

Vladimir Putin: It is a misconception. I think it is a propaganda tool rather than actual fact. They are trying to label us recreators of an empire, of the Soviet Union, who want to bring everybody under control. This has nothing to do with reality.

I have already said this, and I’ll repeat it. We never even thought of annexing Crimea, for example. We never had any such plans. It is part of the post-Soviet space, but I will be honest with you, our security services are not present there.

You see, we have a completely different vision of the relations in the post-Soviet space. It was actually Russia that proposed creating the CIS at the time. It was Russia that agreed with and encouraged the independence of the former Soviet republics in the post-Soviet space.

What is our ambition? Our ambition is to integrate within the post-Soviet space but not because we want to restore the Soviet Union or an empire but because we would like to use the competitive advantages of these states that are now independent. We have a common language for interethnic and inter-state communication, which is the Russian language. We have a common transport and energy infrastructure that we inherited from a united country. Our companies are strongly connected. There is a good level of research collaboration in science and education that could be used for success in global markets and to help our nations prosper.

We are now working on an agreement to establish the Eurasian Economic Union. Please try to look at this document from within, with an expert eye, without any bias. Just analyse it. Is there anything in it about recreating an empire? There’s nothing. The union’s only objective is economic cooperation.

Why not use the legacy of the previous generations to become more successful in tackling modern challenges? Certainly, we’ll do that.

By the way, the stubborn refusal of the Brussels bureaucrats to establish contacts with the Customs Union and the emerging Eurasian Economic Union is surprising. It is no secret that they always refer to some procedural and legal regulations of the European Union when they refuse to have anything to do with both the Customs Union and the emerging Eurasian Economic Union because Belarus and Kazakhstan are not members of the WTO yet.

They could keep them outside the WTO forever, only to go on refusing to deal with the Eurasian Economic Union. I think they are doing it on purpose. Why? Because, apparently, the European Commission in Brussels sees this integration as some kind of threat to its competitiveness.

I think this approach is totally wrong. They should think not about possible threats but about the possible advantages that are obvious in collaboration between the European Commission (the EU) and a new integrated entity. Why do I believe there are more advantages than threats? Because the Eurasian Economic Union is based on WTO principles, which helps our partners in Europe work with both Belarus and Kazakhstan.

Also, it is a market of over 170 million people. It is a big market in terms of consumption. There are even more advantages in energy issues because Kazakhstan is an oil producer. Belarus could also play a marked role in these processes as it is in the very centre of Europe and back in the Soviet times it was referred to as the Soviet Union’s assembly line.

I think we should steer away from political clichés and make sure that politics does not interfere with economic development and social issues.

Sergei Mikhailov: Our colleague from the Land of the Rising Sun. Hiroki Sugita, Kyodo News, Japan. Your question, please.

Hiroki Sugita (retranslated): You said Russian-Chinese relations have reached a new stage. Japanese Prime Minister Shinzo Abe would also like to elevate relations with Russia to a new level of strategic partnership. What do you think this strategic partnership with Japan should be like?

They say, Mr President, that you may visit Japan in the near future. I hope you will, but when do you plan to come and what could be the aim of your visit?

Also, Mr President, I’d like to ask you about the four northern islands. You said you want to resolve this by Hiki-wake – a term for a draw in judo. Have you changed this position? Could you also explain the meaning of this Hiki-wake, please? What is your position on this now?

Vladimir Putin: We’ve already said this – both Chinese President Xi Jinping and me – that we don’t make friends against someone else. Russia has its own relations with Japan and China has its ties with Japan as well. Incidentally, your Chinese colleague said we should commemorate the 70^th anniversary of the end of World War II. This concerns all countries that were involved in these tragic events one way or another. We should remember them and give an objective assessment of this global tragedy. But today nothing should prevent us from moving forward.

I consider it absolutely counterproductive to juxtapose our relations with any country, including China, to ties with third states. We have no reason to limit our relations with Japan. Let me assure you that China, for all the complications in its relations with Japan, is developing them itself.

It has simply never occurred to us – either us or the Chinese – to set some conditions for each other in developing bilateral relations. We have never done this and are not doing this now. Both we and our Chinese friends behave exclusively as partners. We are not setting up any blocs; we are simply upgrading our relations and that’s all. This is natural because we supplement each other.

It would be also natural for us to expand our opportunities with Japan. When I spoke about our readiness to discuss the islands issue… Let me remind you that at one stage both Russia and Japan froze these talks. Later, after the 1956 declaration we resumed negotiations and it was ratified by the Japanese Parliament and the USSR Supreme Soviet. This declaration (I think this is Article 9) reads that the Soviet Union is ready to consider the transfer of two islands to Japan. Nothing is said about the terms of such a transfer or who will exercise sovereignty over these islands, but the transfer is mentioned there.

These two islands, as well as all four of them, are a subject of complicated negotiations. We’ve inherited this issue from the past and it is a cause of tensions in our relations. Both Russia and Japan are sincerely interested in resolving this problem. Let me emphasise that Russia wants to resolve it as well. What does Hiki-wake mean in this case? If I knew the final answer we would have signed all the documents by now. But the final answer is not yet here and we can only arrive at it through hard joint work. But in principle it means that the solution should not infringe on the interests of either side; it should be an acceptable compromise and neither side should feel the loser. This is not a simple formula but if we keep thinking about it and moving forward, nothing is impossible.

Are we ready to hold such talks? Yes, we are, but we were surprised to hear recently that Japan has joined some sanctions. What does Japan have to do with any of it that it had to suspend negotiations on this issue? So we’re ready for talks but what about Japan? I don’t know, so it’s a question I’d like to put to you. Go ahead, please.

Sergei Mikhailov: Our colleagues from Canada. Mr Kirk, Canadian Press national news agency. The agency was established in 1917, which was a memorable year for Russia.

Malcolm Kirk: Thank you, Mr President. It’s a privilege to be here today. I would like, if I could, to turn your attention to the Arctic for a moment. I think that we know that the Arctic may contain perhaps a quarter of the world’s undiscovered energy resources. So it’s obviously a potential source of significant wealth and probably of strategic military importance as well. Canada’s government is laying claim to the North Pole and our Prime Minister has ordered his own Government to draft an international claim for the mineral resources lying beneath the ocean floor at the North Pole. Russia too has made claims of its own regarding sovereignty of the Arctic seabed and I believe Russia has even planted a titanium flag on the ocean floor. Something that I think prompted a fairly strong reaction from other nations. But I’d be very interested to hear your view of Canada’s sovereignty claims in the Arctic north.

And just one other question, if I may. Our Government has also been very critical of you and Russia in its handling of the situation in Crimea, has described it as aggressive and imperialistic. I’m curious what your response would be to our Prime Minister’s characterisation and whether you intend to have any discussions with him in France during the D-Day celebrations. Thank you.

Vladimir Putin: As for communicating and holding meetings, if the event’s host, President Hollande, doesn’t change anything, I will certainly come, and I do not intend to shun anyone. I will gladly talk to any of my colleagues, including the Canadian Prime Minister.

You know, there is something surprising about it for me. Let’s say, the Canadian Government criticises Russia. Where is Canada and where are Ukraine and Russia? I understand that it could be about global arguments, but still even the United States has little to do with Ukraine. Neither Canada nor the United States have as many national interests vested in Ukraine as Russia does.

I’ve already said this, but I’ll repeat it for you one more time: I think that our partners in the United States and Europe employed brutal and unlawful methods in Ukraine by prompting a government coup and thereby threatening our fundamental national interests in terms of security, as well as the economy. For this anti-constitutional coup was followed, and we clearly heard it, by calls to strip national minorities of their language rights and join NATO, which means the possible deployment of NATO troops, ballistic attack systems and missile defence capabilities. We would have found ourselves in a radically new environment, which prompted us to take certain steps, including those aimed at supporting the aspirations of the people of Crimea to join Russia. We believe that in the face of such power politics we delivered an adequate response along the same lines. I hope that it will never happen again in any other circumstances or places.

Besides, I’ve already said in response to a question by your Spanish colleague, and I can say it again: we are adamant that Russia’s position was the only right option and that Russia acted in full compliance with international law. If I’m not mistaken, Article 1, Paragraph 2 of the UN Charter stipulates that the purpose of the United Nations is to ensure the nations’ right to self-determination.

We vigorously oppose attempts by international players to interpret international norms exclusively to suit their own agenda based on their interests in any specific global environment. In Kosovo, they said that acknowledging the right of a nation to self-determination was the right way to go, while in Crimea they turned everything upside down and started talking about territorial integrity, which is also mentioned in the UN Charter. We must find a way to reach common ground by agreeing to act in one way or the other and refraining from saying that white is black and black is white. We are calling for restoring the primacy of international law in global affairs.

As for Canada’s position, it is traditionally aligned with that of the US administration, so we’re not surprised. We are ready for a discussion, including with the Canadian Prime Minister. We have talked about many issues with him on numerous occasions. If such a discussion is needed and wanted, we are ready for it.

Regarding the Arctic, there are mechanisms that were devised within the United Nations. Only recently, Russia used legal procedures envisaged by international law to claim certain parts of the Far Eastern continental shelf. We are using exclusively legal means, and we are committed to doing so in the Arctic as well. You may have noticed that Russia had very lengthy talks with its Norwegian partners and friends on shelf delimitation in the North and Barents seas. These talks took almost a decade. Such matters are always very complex, especially when oil and gas reserves are involved. Nevertheless, we were able to reach common ground, and I think that it will benefit both countries, since conditions were created for joint economic efforts in this region. In my opinion, this is the best and the wisest way to resolve all the issues in the Arctic.

There are other tools, purely regional ones, and we’ll be using them to achieve accord and mutual understanding. As for the flag planted on the Arctic seabed, this was not a government move. It was rather an emotional act. I don’t see it as anything that far out of the ordinary. Americans once landed on the Moon and planted the US flag there. We haven’t quarrelled with them over that and never imagined they would claim ownership of the Moon. Fortunately, our space cooperation with the United States is thriving.

Sergei Mikhailov: Thank you, Mr Putin. Here is another news agency – British and Irish, with a 150-year history – Press Association, and its CEO Clive Marshall. Your question please, Clive.

Clive Marshall: Mr President, UK-Russian relations deteriorated significantly last week over the Ukrainian developments. Cameron said Britain may have to prepare for a very different – meaning worse – long-term relationship with Russia. He supported the sanctions against Russia and deployed fighter jets to the Baltic region. Prince Charles, according to some reports, compared you to Hitler last week. How would you comment on this?

Vladimir Putin: This reminds me of a good proverb: You are angry, therefore you’re wrong. Please pass on my words to the Prime Minister and to Prince Charles. He has been to our country more than once. I didn’t hear him say this, but if these words indeed were said, it is certainly unacceptable. I’m sure he understands that as a man of manners. I met him personally, as well as other members of the Royal Family. This is not how monarchs should act.

But over the past few years we have seen so much that nothing can surprise me anymore. In my work, I will not be guided by what they say about me. I will be guided, as I said, solely by the interests of the Russian people. I hope that our colleagues in Great Britain will keep that in mind and will remember that when searching for solutions to any controversial issues we are always guided by international law. Only if we respect international law and interpret it consistently will we be able to find solutions to the most difficult issues.

As for our practical issues, I would say, should our British partners be guided by their national interests – like I am – and not by other considerations, I’m sure this will soon become a thing of the past and we’ll be able to continue positive cooperation like we did before, maybe even reach some new heights, and can start thinking about what is to be done in order to make our future cooperation more effective.

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