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Excerpts from transcript of news conference following Russia-EU Summit

President of Russia Vladimir Putin: Ladies and gentlemen,

During today’s 30^th Russia-EU summit, we had a truly comprehensive exchange of opinions on a very wide range of issues, from energy and trade to international and visa-related issues.

As always, our talks were held in a business-like atmosphere, and they were extensive and substantive. We summed up the results of our work over the six months since our June meeting in St Petersburg and noted that we have made progress in all the main areas.

Our mutual trade in 2011 grew by nearly one third to constitute $394 billion. The growth in January-October of this year came up to 4.4 percent, but I believe that by the end of the year, we will hit the $400-billion threshold as a minimum. Thus, thanks to our close cooperation, we have surpassed our pre-crisis indicators.

Ladies and gentlemen, allow me to point out that given the adverse developments in the global economy and the recession in the eurozone, this kind of cooperation between the Russian Federation and the European Union in economic matters is a very positive factor for supporting the economy and the social sphere as well, first and foremost, for maintaining a large number of jobs both in Russia and in EU nations.

The EU’s share in Russia’s trade volume amounts to 48.8 percent, but it could be even higher. Russian exporters are ready to increase and diversify their deliveries to the European market. We assume that following Russia’s accession to the World Trade Organisation, the EU will remove most of the restrictions slowing down our exports, and will put a stop to anti-dumping procedures.

The European Union is one of our main investment partners. The total volume of mutual cumulative investment has already surpassed $325 billion, with European companies having investing more than $250 billion in the Russian market, including $100 billion in direct investment.

”Cooperation between Russia and the EU in economic matters is a very positive factor for supporting the economy and the social sphere as well, first and foremost, for maintaining a large number of jobs both in Russia and in EU nations.“

The Russian economy and the EU economy are becoming increasingly interdependent. I am confident that this will also be reflected in the overall nature of our relations and in strengthening the legal framework of our cooperation.

Today, we spoke about the need to continue working on the new framework agreement.

Naturally, we also discussed issues of introducing visa-free regime for short-term travel between Russia and the EU as soon as possible. I want to note that I feel we have resolved nearly all technical issues related to introducing a visa-free regime. Now, all that remains is for a political decision to be made by our European colleagues.

I also want to note that every year, Russian tourists spend more than 18 billion euro shopping in EU nations. I think you will agree that this is a substantial amount, and if we consider that our trade turnover this year will be $400 billion, the significance of our trade and economic ties is very great.

The absence of a visa-free regime certainly hinders the development of our economic ties. But we understand that it is not simple for our colleagues to resolve such an issue, since it needs to be approved by 27 nations. Different people feel differently, so we will wait until our European partners are ready for this decision.

Energy has traditionally been an important area of cooperation with the EU. Russia supplies one third of the EU’s demand for gas and oil. This is yet another evidence of the deep integration between our economies and how much we depend on each other.

We consider it our common objective to upgrade and diversify our energy infrastructure. You know that we have completed the Nord Stream gas pipeline system under the Baltic Sea. We have launched another pipeline project that will run under the Black Sea, the South Stream. All this, along with the use of Ukraine’s gas transportation system and expansion of the Yamal-Europe gas pipeline system, will significantly increase energy security on the European continent.

”Energy has traditionally been an important area of cooperation with the EU. Russia supplies one third of the EU’s demand for gas and oil. This is yet another evidence of the deep integration between our economies and how much we depend on each other.“

We also talked about problems related to the “third energy package.” I want to say that our position here has been known for a long time. We think it is unacceptable to apply a “third energy package” at least to contracts signed before its approval by our European partners.

We have continued our discussion and I hope that we will find an acceptable solution on this matter. We are not trying to gain any special preferential treatment for ourselves, but we expect our rights and the agreements reached by our companies to be respected.

Our agenda also included humanitarian issues: we are concerned by the gross violation of rights of the Russian-speaking population in certain EU nations and Baltic states. We are concerned by the glorification of Nazi collaborators and, in my view, we cannot accept this sort of thing in the modern world.

Similarly, we discussed the state of affairs in the global economy. We agree in our assessments: a variety of measures are needed to improve the situation so as to stimulate economic growth and create new jobs. We see this as the main objective of Russia’s presidency of the G20 and count on close cooperation with our colleagues from the European Union.

We gave serious attention to current international issues, first and foremost to the situation in Syria, North Africa and the Middle East, as well as Iran’s nuclear programme. Naturally, we have disagreements in our approaches to certain matters, but what’s most important is that both sides are interested in deepening foreign policy coordination. Our dialogue will continue on a permanent basis, both at the expert level and at the next Russia-EU summit in 2013.

I would like to thank our colleagues for the atmosphere that was created today. Although we dealt with some topics on which we do not agree, we discussed all of these problems very constructively, considerately, with a clear interest in finding solutions. Congratulations and best wishes for the holidays and the coming New Year. Thank you for your attention.

Question (retranslated): Mr Putin,

What are the circumstances in which Russia could join in the stabilisation of Cyprus’ financial position?

Foreign Minister of France Laurent Fabius said last week that he hopes 2013 will be the Year of Free Syria. Mr Putin, do you also hope for this? And how is this possible if President Bashar al-Assad remains in power?

”We are concerned by the gross violation of rights of the Russian-speaking population in certain EU nations and Baltic states. We are concerned by the glorification of Nazi collaborators and, in my view, we cannot accept this sort of thing in the modern world.“

Vladimir Putin: As far as Cyprus is concerned, Russia’s Finance Ministry is aware of this problem; we are in contact with the Cypriots and are discussing these issues. Yes, it is true that today the financial, economic, macroeconomic trends in the Russian economy are good: we see an economic growth of 3.7 percent, our reserves are growing; we have money, with just over $500 billion in currency and gold reserves and $150 billion in Government reserves. This is not a matter of money but a matter of conditions and systemic measures.

Cyprus is a member of the EU, and I believe our European partners must lay down the rules that would govern the relations within their own community. And we do not feel very comfortable getting involved in this process. But once the situation is clear, once the agreements are reached, we generally do not rule out the possibility of joining in the stabilisation of Cyprus’ financial position, but this is an issue that needs a separate expert review and analysis.

As far as Syria is concerned, our position is well-known. We are not advocates of the incumbent Syrian leadership yet we believe that in order to reach long-term agreements, we need to first agree on what will happen to Syria in the future, how the interests of all its citizens, all religious and ethnic groups will be secured, how the nation will be governed, and only after that we can begin implementing that plan.

By the way, we have reached certain agreements in Geneva along similar lines, and our European partners generally agreed with this. We agreed in Geneva that all conflicting parties in Syria must sit down at the negotiation table. We hope that these agreements will not remain ink on paper but will also be implemented in practice.

I want to stress again that we will strive for order in Syria, for a democratic system based on the will of the Syrian people themselves. It is in our interests, because it is very close to our borders. And we really would not want any of the changes in Syria to bring chaos that we see in some other nations in the region. I do not think anybody is interested in that, everyone wants to stop the violence and bloodshed.

<…>

”A variety of measures are needed to improve the situation so as to stimulate economic growth and create new jobs. We see this as the main objective of Russia’s presidency of the G20 and count on close cooperation with our colleagues from the European Union.“

Question: I have a question for the Russian President and the leaders of the European Union and the European Commission.

One could discern from your opening remarks that you are resolving many issues effectively and, most importantly, quickly, within the framework of this partnership. We even saw this when, just before your arrival, the EU protocol agreed, quickly and calmly, to hang Russia’s flag correctly, since it was hanging upside down.

But there are matters that are taking quite a long time to resolve. I am referring to issues that you also mentioned in your opening remarks, such as allowing Russian companies to access and work in the European energy market, as well as allowing Russian citizens to travel visa-free to Europe.

How do you feel these problems can be resolved in the near future, in Mr Barroso’s words, for the good of our nations? Thank you.

Vladimir Putin: As far as visa issues are concerned, I already said everything. I have nothing to add. Why repeat myself? The ball is in the court of our European partners, I am certain of it. I think they also see it that way. For a long time now, four years, we have had agreements on readmission in place; all the decisions were made and implemented to guard the outer borders. We do not have any issues that remain technically unresolved.

This is a purely political matter. It is difficult for our European partners to resolve: they represent 27 nations with different approaches. I feel it is harmful, its absence in today’s conditions, with our current trade turnover; it hinders the development of trade and economic ties. We need to be patient and move toward this goal through dialogue.

As for energy, I spoke about this as well. I can only add the following, and our European partners spoke about this today during the discussion – they adhere to the legal provisions and rule of law in their relations with all their partners, including Russia.

There is a document in place that forms the basis for our relations with the European Union. Article 34 speaks about avoiding any measures or actions, which render the establishment and operation of each other’s companies more restrictive.

We feel the adoption of the “third energy package,” which retroactively applies to agreements signed earlier, is a direct violation of this article 34. And we basically view the actions already taken by some of our partners in some EU countries as a confiscation of Russian investment. I repeat, we are in dialogue with our partners, discussing this constantly in a business-like manner. I hope the solutions will be found.

”The adoption of the “third energy package,” which retroactively applies to agreements signed earlier, is a direct violation of this article 34. And we basically view the actions already taken by some of our partners in some EU countries as a confiscation of Russian investment.“

The same is true of Russia’s domestic energy-pricing policies. First of all, we did not take on any obligations regarding our domestic energy-pricing policy as part of our joining the WTO.

Second, these approaches are not applied by our European partners to other nations, particularly Norway. Why is the application so selective, and why is it applied to Russia? This is something we don’t understand and this is also one of the topics of our discussions on this issue.

There are also other problems, but I want to stress this, so that it is clear to everyone. We do not have any fights on this matter, we have discussions and we are willing to find solutions. Again, I work on the assumption that they can be found, and I hope that they will be.

<…>

Vladimir Putin: My long-time friend Mr Barroso explained his position so emotionally and at such length because he feels wrong, guilty. (Laughter.) And you have become witnesses of our discussion. Open article 34 of our framework agreement with the EU and read it for yourselves.

And another remark: price pegging for oil and gas was invented not by Russia but by Holland at the beginning of the last century, and has remained unquestioned all these years. Oil prices are formed on global markets in an absolutely market-oriented manner, no administrative approaches.

This is our direct discussion. Mr Barroso and I have been discussing this way for many years, but even though the problems seem so difficult, we nevertheless resolve many of them and have already reached a trade volume of $400 billion a year.

Thank you very much.