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Leonid Kuchma: Good afternoon. I am pleased to have the opportunity to meet with President Putin in the Crimea. I am convinced that our meetings will contribute to the development of very close and friendly cooperation between Ukraine and the Russian Federation in all areas. The negotiations that we have held – and today we had our third meeting – are proof of what I have said. We have a chance to discuss everything that is of concern to Ukraine and to Russia without being in a hurry. So, we have talked about everything: economic cooperation, above all the work to create the common economic space, work within the Commonwealth of Independent States, the gas consortium, the situation in the world, including in and around Iraq. So I can say that I am totally pleased with the progress of our meeting and I hope Mr Putin uses the little free time that he occasionally gets here 100% in order to be able to get down to work with renewed energy once he is back in Moscow. Thank you.

Vladimir Putin: I would like to second everything that President Kuchma has said. First of all, I would like to thank him for the invitation. It is true that we have a unique opportunity to exchange opinions on every aspect of our interaction in a totally frank atmosphere and without haste. Every day is devoted to a certain problem. Yesterday we talked mostly about the common economic space, and today we discussed bilateral economic relations. We touched upon some aspects of political interaction. We will have a chance later today and tomorrow to discuss some items on the agenda and international problems. By and large these consultations are very fruitful and help us to understand each other better and to bring our positions closer on many issues. Today, for example, we agreed that it is necessary to speed up the work to conclude an agreement underlining the strategic character of our relations. We discussed the development of military cooperation, including naval cooperation. On the whole, I feel that today’s meeting will help us to make considerable progress on some issues. Once again I thank the Ukrainian President for such an opportunity.

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Question: How much time was devoted during your talks to the work of the newly created Four: Russia, Ukraine, Belarus and Kazakhstan? Doesn’t its creation run counter to the plans of each of these countries to join the World Trade Organisation?

Vladimir Putin: As I said, we began the discussion yesterday, and continued it today. We discussed it in great detail.

On the whole we are pleased with the progress. I think we will be able to determine the parameters of these agreements as early as next September. And of course we seek to harmonise our work in joining the WTO. In general, integration with the EU pursues the aim of liberalising trade and economic relations inside our countries while presenting a common position to the world. I think coordinated actions in the WTO accession process are very important. But we believe that if any differences arise it would not nullify our efforts aimed at creating a common economic space, although some fine-tuning will of course be required. And we understand what should be done and how in order to align our activities.

Today the Ukrainian President and I discussed the need for greater coordination in harmonising the parameters of our interaction with the EU.

Russia is aware of what it should do and how. There are many things we have yet to do together with Ukraine. For example we have many questions on non-tariff regulation. I am referring to sanitary standards and various technical parameters on the border. It is a vast range of issues. Today we also discussed the possibility of creating another government-level working group to harmonise our legislations and prepare some issues in order to be able to regularly submit economic issues to the parliaments of Ukraine and the Russian Federation.

Question: What are Russia’s plans regarding the joint building of the An-70 plane? Will Russia invest in that project?

Vladimir Putin: Russia has already invested heavily in the project, and we would like to see the project through. We discussed that topic today. I think the main thing is to know in advance what the market for these products will be. It is a hi-tech product, and we are interested in supporting the aerospace industries both in Russia and in Ukraine. I repeat, the main thing is to determine who will buy these planes from us and on what terms. I agree with the President that we should not forget the project, especially since we have already spent a fair amount of money on it.

Question: How do you assess the progress in the creation of the gas transport consortium?

Vladimir Putin: We are pleased with the progress of that work. Experts have analysed a large body of information on this topic. A tripartite meeting was held recently. A representative of Ruhrgas (a German energy company) has been briefed by our high-level experts on the results of the work and we understand that he was pleased. The next tripartite meeting is to be held in Kiev on May 7 of this year and a high-level tripartite meeting will again be held in Kiev at the end of May. In our opinion we could reach certain agreements by the autumn of this year and we would like to prepare a tentative feasibility study and reach an agreement on how much money each party will contribute to the consortium. We want to know the cost of everything based on the analysis of the state of the gas distribution network in Ukraine and its technical condition. We must know – and this was the main aim – in what condition the system is and how much needs to be invested (we are talking about sizable amounts) in order not only to maintain its current state but to expand its capacity as one of the main channels for the export of Russian gas to Western Europe.

Gas cooperation was not the only topic we discussed with the President today. We also discussed the possibility for more broadly using Ukraine as a transit country for Russian oil. We spoke about the possibilities for broader cooperation in the power industry. All this gives us grounds to hope that we can build our relations with the European Union, with our partners in Western Europe in working out a common energy policy among Russia, Ukraine, our partners in Eastern Europe, Central Asia and the European Union.

Question: The military phase of the operation in Iraq has been declared complete. Now the world community is concerned about post-war reconstruction in Iraq. How do you account for the voices coming out of America to the effect that Russia has made a gross economic miscalculation because it took the wrong side in this war. Do you intend to take part in the reconstruction of Iraq?

Vladimir Putin: It is hard to say who lost and who gained. We did not take sides. We were simply against the war. We did not put our stake on any of the warring parties. We advocated a peaceful solution to the problem. We still believe our position has been morally balanced and justified.

But we must proceed from the realities as they are today and we must think about the future. In connection with this, it is important to interact properly in the future, including on the problem of rebuilding Iraq.

As for the past, by and large the focus has been on Iraq’s debts to the Russian Federation. I must say that although Iraq had recognised the debt, the Hussein regime did not pay us anything. These are contrived arguments. However, we are ready to discuss this topic. I agree with our colleagues, including the United States, who believe that the topic should be discussed within the framework of the Paris Club.

As regards reconstruction, we have discussed this problem in detail with the British Prime Minister quite recently. I spelled out my position. The Prime Minister managed to persuade the Russian side that his three-stage reconstruction plan should form the basis for settlement. We agree with that in principle and we will work with our partners on the Security Council and conduct bilateral consultations.

The most important thing is not some kind of bargaining, not “money in exchange for the future world order” and in exchange for parameters of the international security framework. The crisis in Iraq, oil, money and credits – all this, of course, is very important. But there is a far more important question that we must answer: what kind of world are we going to build, what will be the framework for international security? That is what we must think about and that is what we must concentrate our attention on. If we solve this key issue properly, on the basis of democracy, equality and respect for each other’s interests, then the issue of Iraq can be solved quickly and effectively.