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Vladimir Putin: Good afternoon, ladies and gentlemen,

I would like to brief you on the results of our work. I think our guests, Mr Asnar, Mr Prodi and Mr Solana, as well as the Russian participants in the summit, have every reason for assessing the results of our meeting very highly.

A thorough and constructive discussion of the entire range of issues pertinent to our interaction has shown that we are moving energetically towards creating a system of close cooperation in the political and economic spheres.

The political dialogue continues to gather momentum. I am pleased with its current state. Interaction with the EU in the fight against terror as well as in the sphere of security and defence is assuming ever greater importance. The foundation has been laid for joint actions to prevent and settle conflicts in Europe. The main challenge in the economic sphere remains the search for ways to integrate our economies.

In this connection I welcome the intention of the European Union declared at the summit to put a legal seal on the recognition of the market status of the Russian economy.

I would like to note the work the experts have done to flesh out the concept of the European economic space, which is becoming ever more effective. The mechanism of the energy dialogue has been launched, and will help to ensure the energy security of Europe.

Particular attention was paid to the forthcoming enlargement of the European Union and to the problems that are arising or may arise in this connection for Russia. Chief of them is the challenge of a comprehensive solution to the problems of life support in the Kaliningrad Region. The discussion had quite an acute character. And I think it is not by chance that we consider this to be one of the most important and urgent issues to be solved prior to the actual enlargement of the European Union.

I think the future members of the EU, our immediate neighbours – Poland and Lithuania – should be involved in the search of ways to relieve the situation. I believe that the solution of life support issues in the region will test the quality of our strategic partnership with the EU.

During the course of our meeting we have also exchanged opinions on some topical international issues, including the situation in Afghanistan, in the Balkans, in the Middle East and the situation between India and Pakistan. We have paid particular attention to the latter problem. We understand India’s concern about the continued terrorist activities in Kashmir. We believe that taking resolute measures to stop the activities of terrorist groups on Pakistan-controlled territory would help to normalise the relations between India and Pakistan.

At the same time, we were one in stating that an armed conflict is extremely dangerous, that it could have dire consequences for security and stability as a whole, which would have repercussions far beyond the region itself. We have agreed to continue coordinating our efforts to prevent armed clashes developing into a full-scale confrontation. That is one more example of the close coordination of the foreign policies of Russia and the EU.

To sum up, I would like to single out the main thing: in spite of the existence of obvious problems in our relations, problems that need to be solved, this summit has clearly shown that our cooperation does not stand still. We have determined the practical tasks that need to be addressed in preparing the next summit in Copenhagen in November this year, and I am sure that the mutual commitment to deepening our interaction will enable us to achieve the goals we have set.

Thank you for your attention.

Question: What are the specific criteria for liberalisation in the energy field? What steps are being taken towards an early political decision to allow international organisations to come to Chechnya to ensure humanitarian assistance and on efforts taken to prevent forcible repatriation to Chechnya?

Vladimir Putin: Unfortunately, there has been no translation, so I will answer your question to the extent that I have understood it. First, concerning the liberalisation. We have discussed two aspects of that theme. The first aspect is the energy dialogue as a whole, which, I would like to note, is developing in a very positive way. There are details that still need to be finalised, but for us the decision to approve the continued practice of gas contracts was a very important signal, and what is more, a practical signal.

We have expressed our ideas on how we see the further development of the energy dialogue, and that concerns not only hydrocarbons, but also cooperation in the electric power industry. Here, too, we have some outstanding questions, but the direction and the pace of that movement have been correctly chosen and we are satisfied with the pace. We have discussed joint projects to develop major Russian fields of hydrocarbons. We have created corresponding working bodies, and we believe that this is absolutely right. So, on the whole, I repeat, we are satisfied with the way our contacts with the European Union are developing.

We are absolutely convinced that the solutions we propose in this sphere fully meet the interests of the European economy, the industrial users and households. And I would like to assure you that if we embark on the road that we discussed today, the European economy will enjoy stable supplies and acceptable prices. And it will remain fully competitive as far as that part of cooperation with Russia is concerned.

As regards the situation in Chechnya I think you are aware that in spite of all the complexities the Republic continues to develop in a positive way. All the necessary conditions are in place for the work of international organisations there, but that, of course, is not the main thing. The main thing is that a normal social environment is being created, government bodies and law enforcement bodies are being created inside the Chechen Republic. Our current task is to create the Ministry of Internal Affairs of the Chechen Republic staffed by the citizens of the Chechen Republic. And we very much hope that they will assume the main responsibility for the situation in the Chechen Republic. Once that happens we will continue to develop these political procedures with the final aim of holding a referendum on the Constitution of Chechnya, the legal foundation of the Chechen Republic and, at the next stage, holding elections of the head of the Republic. This is the perspective.

Question: After Poland and Lithuania join the EU the situation in the Kaliningrad Region will sharply deteriorate. Will the dialogue between Brussels and Moscow on the issue be permanent? And, as the Russian President said earlier, the discussion was fairly sharp today. What is the main cause of differences and have any decisions been made?

Vladimir Putin: It is indeed a very sensitive issue for us. The reason is clear: the population of the Kaliningrad Region is 1.3 million, and one can only guess how many relatives and friends these people have in mainland Russia. We believe that considering the current level of interaction between Russia and the EU, and the overall state of affairs in the world, we cannot afford to ignore basic human rights. If we fail to address these problems in time, these fundamental principles of the present-day civilised community will come under test. But I very much count on a positive reaction from our colleagues. I hope that the issue will be addressed without delay, just like the issue of conferring the market status on the Russian economy. We have discussed it at length, it is of critical importance for us, it has not only moral and political, but also a substantive, hands-on significance that you can put concrete figures on. I would like to express gratitude to the leadership of the European Union for the decision they have announced today. I hope that it will soon be finalised and explained to the Russian audience and the Russian public. We are talking about 14 anti-dumping procedures that the European Union currently applies to Russian-made goods. The Russian economy loses about $250 million a year because of them. Worldwide, there are about 100 anti-dumping procedures against Russian goods, and the losses of the Russian economy run into a neat figure of $1.5 billion. If the decisions declared today are implemented, I am sure that would mark a movement in the right direction. We hope that other acute issues will be tackled in the same way as the problem of Kaliningrad.

Question: You are pursuing a very bold international policy. What reciprocal steps should Europe take in your opinion? You said in Rome yesterday that cooperation with the CIS is underestimated. How can NATO cooperate with the CIS and the SCO?

Vladimir Putin: You misinterpreted me a little bit. I did not say that any elements of Russian policy in Asia or the CIS are underestimated. I spoke about the importance of that strand of Russian policy and I said that we never neglect these areas of Russian policy and that the Russian foreign policy will be balanced. That was my point.

As for the Shanghai Cooperation Organisation and our Asia policy, I can elaborate on my position.

I believe that Russia’s efforts in this area would provide a substantial addition to what we are doing with our Western partners within the European Union or as part of cooperation with NATO. That is what I had in mind. I think it is a position that benefits not only Russia, but also our partners both in the East and in the West.

As for the reciprocal steps, we devoted a lot of time to it today. To stay with the topic that you have proposed, it is our cooperation in the security sphere. The Russian Defence Ministry has formulated our proposals on expanding cooperation with the EU in that sphere, and we have presented this plan to our colleagues. We are awaiting a response. So far there has been no response, but we hope that our colleagues will study the Russian proposals and express their views on the matter.

Corresponding procedures are to take place shortly within the European Union, and we expect to get a response. Important meetings on this topic are taking place at the Russian Defense Ministry today. I am sure that the movement will develop positively. In terms of our cooperation in the economic sphere, the issue of Russia’s accession to the WTO and the European Union’s support for that process is essential for us.

Today, as you have heard and as we gather, the issue of recognising the market status of the Russian economy has been decided. And there are other important areas of our economic interaction. They include the energy dialogue, cooperation in hi-tech spheres (which we discussed today), cooperation in the field of aviation and rocket technologies. France has effectively handed over the Kourou space launching site to the European Union and we have a very interesting, important and promising prospect of cooperation there. We are discussing the compatibility of the GLONASS and European space systems. These areas of cooperation have a global character. I have mentioned just some of the basic areas, but there are many more. I have mentioned just the main ones.

Question: The Russian President has already touched upon the energy dialogue between Russia and the EU. What are the prospects for the energy dialogue and is progress being made in this sphere? One has the impression that the Russia-NATO relations are developing much faster than the Russia-EU relations. What is your comment?

Vladimir Putin: As regards the speed with which issues are being addressed in the framework of Russia-NATO or Russia-EU cooperation, especially in the security field, NATO has an edge because it is a well-established organisation. The EU is only now formulating its European security and defence policy and until it takes final shape, it is hard for Russia to join it. That said, we do offer cooperation even at this early stage. I think it will be useful and important too.

I gather that our colleagues and Mr Solana basically agree with this. I also hope that as the issue moves forward in Europe itself, our joint work in this important area will intensify.

As for the energy dialogue, I have already spoken about it. I would merely like to add that all these issues could be solved in principle only if we vigorously move to solve another global issue. That would be an addition to my answer to the previous question. As Mr Prodi proposed at the previous meeting in Moscow, we should create a common economic space in a greater Europe that includes Russia. The key task is to work out common rules of operating in the European market. And I think that would help us, in the longer term, to solve the energy problems.