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Georgi Parvanov: Mr President, ladies and gentlemen,

I would like to express my satisfaction with the visit by President Putin and his delegation to Bulgaria. You can see for yourselves that the festive atmosphere connected with the 125th anniversary of the liberation of Bulgaria does not hinder the progress of the delegation’s official visit. The course and the results of the negotiations and the documents we have signed warrant the conclusion that this visit will be a milestone in the development of our bilateral relations. You would agree that by signing these important documents we actually provide a practical solution to outstanding issues in the economic, financial, cultural and spiritual spheres.

The shared desire to increase trade between our countries has translated itself into concrete proposals, in particular the early introduction of certifying products that will be offered to the markets.

The issue of Bulgaria’s debt has been solved in a way that is satisfactory for the Bulgarian side (as the Finance Ministry will confirm). Proposals have been made, and I think they will lead to concrete actions in the energy sphere. I would like to express my satisfaction with the fact that Russia has decided to continue its participation in modernising the Kozlodui Nuclear Plant, specifically Units 5 and 6, and to assume obligations on the construction of the Belene Nuclear Plant.

The Russian side has expressed its desire to take part in the privatisation of some energy facilities and, I stress, everything will be done on the basis of equality, as our declaration envisages.

We signed an agreement on increasing gas transit, and an agreement on tariffs and supply schemes.

We have commented of course on the possibility of liberalising the visa process because it is connected with tourism. We cannot but be worried about the decline of the number of Russian tourists coming to Bulgaria from 130,000 to 100,000 a year.

We believe that cooperation at the inter-regional level is extremely important and fruitful. The documents signed today are more proof of the importance we attach to this.

You have seen for yourselves how our people welcome the resumption of contacts in the spiritual and cultural spheres. That was obvious at the opening of the Russian Culture Days in Bulgaria and during the preparations for the Bulgarian Culture Days in Russia.

We have also exchanged opinions on some current events, the developments in Iraq, the situation in the Balkans and on our further interaction in international organisations.

To end my remarks, I would like to note the friendly and constructive atmosphere that prevailed throughout our talks.

President Vladimir Putin: Dear ladies and gentlemen,

I want first of all to sincerely, from the bottom of my heart, thank our Bulgarian friends for the warmth and hospitality which we felt from the very first minutes of our stay in Sofia.

Today a very important step has been taken in the history of Russian-Bulgarian relations. In my opinion, we did not just interrupt the long ten-year period of absence of high-level ties, but, in essence, again started, on a new basis, to build relations of a constructive new partnership between Russia and Bulgaria.

Indeed, Mr President and I quite long conversed today, the two of us and in an extended composition with the participation of key ministers of both governments, and arrived at very serious decisions.

This is all about investment, energy cooperation, work in the military technological field and some other important questions, including tourism. We attach very great importance to our collaboration in the areas of culture, science and education. I must say that this field of joint activity was never subject to considerations of political expediency. I am confident that it will so continue in the future as well.

It is profoundly symbolic that our visit to Bulgaria has coincided with the 125th anniversary of Bulgaria's liberation from the Ottoman yoke. This gives our work a special positive emotional charge. We are confident that development of relations between Bulgaria and Russia meets, in the full sense of the word, the national interests of the Russian Federation and Bulgaria.

We count on the coordination of our efforts in the international arena, directed to the further enhancement of stability in international affairs and to the establishment of an environment favourable for the development of the economy and the humanitarian sphere.

We attach very great importance to interregional cooperation. This, beyond doubt, will help to widen the base of our cooperation and to include in our joint work small and medium-sized business. Along with large projects in the field of energy and other sensitive areas, very important areas for both Russia and Bulgaria – it will help to establish a very good prospect of our cooperation for the long term.

We discussed in sufficient detail international cooperation and the problems relating to a resolution of the crisis around Iraq, and we also discussed the situation in the Balkans.

On the whole I want to express my satisfaction with the atmosphere of openness, in which all our conversations were held. We – when I am saying we, I mean all the members of the Russian delegation – are extremely pleased with the character of our conversations and joint work.

Question: The Iraq crisis is cause for concern worldwide. How does Russia assess Bulgaria's stand on the Iraq issue in light of the stationing of American military forces on its territory, bearing in mind a possible strike in Iraq. And does Russia consider the option of resolving the conflict suggested by Chile and Canada or is it inclined to use the Security Council veto, as Minister Igor Ivanov Igor Ivanov said earlier?

Vladimir Putin: In order to answer your question, it is necessary to make a whole report right now. I must say the positions of Russia and Bulgaria on the Iraq problem do not fully coincide. But, as the Bulgarian President's guest, I consider it incorrect to give assessments to the foreign policy course of Bulgaria. As to the substance of the problem, we presume that each country has the right to and must determine its foreign policy course proceeding from its own national interests. And in this regard we have no problems. As to the determination of priorities of its national interests, that's a matter for Bulgaria.

We, Russia, believe that the crisis can and should be solved by peaceful means. I agree with the observation of the President of Bulgaria when he said that the European Union had itself been rather late in determining its position on this issue, and this had placed many countries in sufficiently difficult situation of choice. To develop in this situation a well-considered and balanced approach to solving the Iraq problem is hard. But, when people go into power, into the government, no one promises them an easy life. I think that in these conditions, in this situation there's only one criterion for decision making: we must be guided by the principles and norms of international law.

Question: Could you possibly, after the latest meetings, assess the public mood and the political climate of Russian-Bulgarian relations as of now? And what effect can today's cooperation, its improvement have on the energy sector? What specifically can be in the near future?

Vladimir Putin: Qualitative changes have occurred in relations between Bulgaria and Russia over the recent period. Relations have changed, undoubtedly, for the better, and this is directly associated with the personal efforts of the President of Bulgaria, Mr Georgi Parvanov. We indeed discussed very many questions in the economic sphere. And among them the question of energy cooperation holds one of the leading places. It incorporates several components. The first is the continuation of cooperation in the gas sector. The Russian side is ready to increase the volume of transit gas which goes through the territory of Bulgaria to third countries: to Macedonia, Greece and Turkey, from 12 to 18 billion cubic meters. We are ready to take part in pipeline transport development and in the gasifying of the territory of Bulgaria, and we are ready to take part in the plans of the Bulgarian side in the field of nuclear energy. Whereas Gazprom is ready to invest about 50 million dollars in the development of the gas transportation system – that decision has practically been adopted – for cooperation in the gas sector the Government of the Russian Federation has adopted a decision to allocate a credit of 150 million dollars. A part of this credit has already been used, the other part is reserved in the Russian Federation budget.

We are ready jointly with our Bulgarian colleagues to consider the possibility and expand our cooperation in electric power production. Including in supplies of electricity to markets of third countries. Other spheres were also discussed.

I did not mention one more sphere of energy – oil industry. Lukoil, one of Russia's major leading companies, has already invested more than 300 million dollars in the Bulgarian economy. We are ready and are now considering the joint Russian-Greek-Bulgarian project for expanding pipeline transport, the construction of an oil pipe. This will be a further 250 million dollars. I want to say that our economic collaboration is not limited to cooperation in the energy field.

Question: What are your specific intentions regarding participation in the privatization of the energy sector of Bulgaria? We know there is an agreement that there should be no intermediaries between Gazprom and Bulgargaz. We would also like to know what preliminary decision is involved as regards the payment of Russia's debt to Bulgaria.

Vladimir Putin: A systemic question encompassing several spheres at once. With regard to participation in the privatization – this is a question of commercial relationships between appropriate economic structures. We know of the plans of the Bulgarian side to privatize the gas distribution networks. Bearing in mind that the Russian company Gazprom is today an international consortium with the participation of foreign partners, primarily German, and the main supplier of gas to Bulgaria – we expect that it will be given the right to participate in this process. And, if this is done on a basis of equity, we hope that Gazprom will take part in the privatization and then it will be directly interested in developing the gas distribution network for supplies of gas to third countries through Bulgaria and in developing the gas distribution network in Bulgaria itself for expansion of the gasifying of Bulgarian cities and the Bulgarian economy. I have already said that Gazprom has reserved 50 million dollars for this work. As to other projects, it is the subject of commercial deals.

Our credit relations are developing at present very positively. We have the mutual obligations of Russia to Bulgaria. A number of Bulgarian agencies have obligations to Russian enterprises and agencies. These mutual questions have been settled. And the repayment of credit was in commodity supplies. Where it has not been possible to agree on those commodity supplies, bearing in mind the complicated issues in pricing, the Russian side is prepared to meet its debt obligations in hard currency. Last year it was 35 million dollars, and this we are ready to pay as much as the Bulgarian side agrees with us.

There are certain debts of our Defense Ministry to the Bulgarian Defence Ministry. We have agreed that these debt obligations will be met through repair of some ships at Bulgarian yards. This involves utilization of Bulgarian industrial capacities.

Lest you think that I was trying to get away from the question about gas-deal intermediaries – it was one of the subjects of our conversation today. This is not our problem, it is the problem of Bulgaria. The fewer the intermediaries, the smaller is the markup, the smaller is the load on the Bulgarian economy. And this will enable us to move to normal pricing for the transit of Russian gas to third countries through the territory of Bulgaria.

As to the field of military technological cooperation, here we have certain positive shifts. You know of the decision to modernize the aircraft of the Bulgarian army. We count on these agreements being implemented.

The main problem, in our view, today is the necessity to conclude an appropriate agreement on work under the licenses transferred by Russia, and earlier by the Soviet Union, for the production of Soviet and Russian weapon systems in Bulgaria. All in all, more than 670 such licenses were transferred.

I shall add that if we normalize our cooperation on a legal plane, this will provide a good basis for the development and maintenance of the military-technological complex of Bulgaria and will enable Russia and Bulgarian partners to work effectively in markets of third countries.