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Vladimir Putin: First of all, I would like to thank my colleague, the Prime Minister of Sweden, for the invitation to attend this event. I am sure that the new quality of relations between our countries will help us to tackle more ambitious tasks. During the course of our talks we have confirmed that we have a shared position on the main and fundamental issues of the continent’s development. We are convinced that the preservation and development of a stable, democratic, peaceful and united Europe meets the interests of all the peoples that inhabit it. Accordingly, we are committed to a constructive positive dialogue with our partners.

During the course of this summit, we discussed several issues that I think are of particular interest. They are European security in its political and economic dimensions as well as the Russian initiatives in this field. Then, of course, there are the problems created by the enlargement of the European Union for Russia and some of our partners, including those connected with Russia’s Kaliningrad Region, which will become an enclave surrounded by European Union countries on all sides. I thought it was important to tell our colleagues, as we did, that we must not merely neutralise the possible negative consequences for Russia, but on the contrary, use the advantages that the enlargement of the European Union undoubtedly offers. We are sure that taking into account our mutual interests will contribute to the stability and economic prosperity of the continent.

An important aspect of cooperation is the so-called energy dialogue, that is, supplies of Russian fuel and energy to Central and Western Europe. Naturally, that envisages European investment in the development of the Russian energy sector. If we solve these problems in practice, we will not only ensure the energy security of Europe but also greatly contribute to sustained economic growth in Europe and the creation of new jobs in European countries.

I would like to stress that the situation in Europe today is unique. All the European countries share democratic principles. We are no longer separated by ideological or foreign policy barriers. We are clearly aware of our cultural affinity and most importantly, our shared interests. And today, at the start of the millennium, we must use this unique opportunity to make Europe a model of civilised communication and effective pooling of efforts by our countries. I think we have such a chance and we must use it.

In conclusion, I would like to say that I highly value the results of our meeting with the Swedish Prime Minister. On the fringes of the summit, we exchanged ideas on the development of bilateral relations, especially in the trade and economic sphere. We have agreed to discuss aspects of cooperation in more concrete ways during the upcoming visit to Sweden by Russian Prime Minister Mikhail Kasyanov.

Finally, we vigorously endorse the proposal of our Luxembourg colleague on the European Union’s participation in marking the 300th anniversary of St Petersburg. I would like to join the Prime Minister of Sweden who has just said that Petersburg was built as a “window to Europe”. But it is not only “a window to Europe”. It is a very vivid and tangible result of joint work because Petersburg, though a Russian city, is one of the most “European” Russian cities precisely because it was created by the talents and genius of the foremost representatives of Europe. It is a visible result of cooperation between Europe and Russia.

Question: What will be the political decision on Chechnya? And when can it be taken?

Vladimir Putin: Completing my speech to the summit, I reacted to the concerns expressed by my colleagues about the situation in Chechnya. We share their concern.

There are indeed some outstanding issues and these issues belong to the humanitarian sphere. Above all, there is the return of refugees to their permanent places of residence, the development of institutions of judicial protection, the general strengthening of the institutions of power in the republic and economic recovery. At present, there is total unemployment. In fact, unemployment is the spawning ground for crime, recruitment into insurgent bands and so on. It is a comprehensive task that calls for a major administrative effort and financial outlay. It is a task that cannot be solved without including the Chechen people themselves.

You know that no military operations are being conducted there. We have decided to withdraw part of our military contingent from the territory of Chechnya, and troops are already pulling out. But we will keep there as many troops as necessary to ensure peaceful life. At present, all counter-terrorist operations are supervised not by the army, but by the special services. I repeat, we will strengthen the democratic procedures in the republic and, once the corresponding conditions are in place, we will set in motion the procedures of electing the leadership of the republic.

We are ready to cooperate with international organisations. At present, practically all the major international organisations have their representatives in Chechnya. We intend to continue cooperating with the international community; we are absolutely open in that sphere.

But since you have raised this topic, I would permit myself to draw some parallels. What is happening in Macedonia strongly reminds me of developments in Chechnya. It will be recalled that in 1996 Russia totally withdrew from Chechnya. The resulting vacuum was exploited by destructive, nationalistic forces and religious extremists. These forces built up and spilled out in the shape of aggression against the neighbouring Republic of Dagestan. If we hadn’t taken adequate measures, we would be confronting other and far larger problems today. The decision we took was to destroy the terrorist gangs in Chechnya, disarm the terrorists and liquidate or put on trial those who did not want to disarm. We see absolutely the same thing happening in Macedonia today. The international community has decided to disarm the Kosovo Liberation Army. The UN Security Council has passed Resolution 1244. But nothing has been done to disarm the terrorists, those who are today attacking Macedonia (not rebels, but terrorists, one must call things by their proper names). And that creates conditions for destabilising Europe at its very heart. The situation may continue to develop in this negative direction. One cannot be sure that other countries in the region are fully secure. And now you can draw your own conclusion as to whether Russia was right in launching a resolute fight against terrorism. But still, I must admit that there exist humanitarian problems.

Question: The enlargement of the European Union and Russia’s accession to the World Trade Organisation have been discussed in Stockholm. Could you speak in more detail about these two issues in relation to the prospects for the Kaliningrad Region. Perhaps our European partners have some wishes connected with our accession to the WTO?

Vladimir Putin: These are the two subjects to which we paid particular attention. As regards the enlargement of the European Union, our reaction is positive. There are problems, but they can be solved. European Union countries already account for 35% of Russia’s foreign trade. After enlargement it will be 50%. Naturally, we are concerned about the problem of Kaliningrad. It is important that the problems of Kaliningrad transit be resolved before new members are admitted to the European Union.

As for what the European Union expects from us in connection with WTO accession, perhaps you should ask my Swedish colleague. I can tell you what we expect. We do not expect any preferences for Russia. But we do expect and we urge our partners to apply to Russia the standard rules of WTO accession that are commonly applied when admitting new members to the World Trade Organisation – no more. We don’t want to be subject to special encumbering rules.

Today Russia must choose its strategy for medium-term economic development. It is an important choice and it will depend on what we agree upon with our European partners. It is important for us that ungrounded dumping measures against Russian exports be lifted. As a result of these anti-dumping measures with regard to Russian goods, Russia has sustained a loss of about $2.5 billion in the last several years. We think we should vigorously promote dialogue between Russia and Europe and create conditions at the state level for investment in various sectors of the Russian economy. And we should apply the rules that we will work out as part of the “energy dialogue” to other spheres of cooperation, above all, cooperation in high-tech sectors. We must tackle the problems of infrastructure together. The use of Russian territory to move West European goods to Asian markets would make these goods much cheaper and more competitive. All these measures – not virtual but concrete – will cheapen European goods, make them more competitive and create new jobs in Europe. We are absolutely convinced of that.

As for the European Union’s requirements of Russia, they have been summarised by Mr Prodi. I consider them absolutely fair. And Russia will of course, not only do what it planned earlier, but will build its policy in accordance with the wishes we have heard today. We will try to get Parliament of the Russian Federation to pass corresponding legislation.