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President Vladimir Putin: Good afternoon, ladies and gentleman!

The 11th Russia-EU summit has just finished, which was held with an unprecedentedly large number of participants. The heads of state and government of almost all the members of the European Union took part, and also heads of state who are preparing to enter the EU. I would once more like to express my gratitude for all our partners who have come to the anniversary in St. Petersburg, to the anniversary of a city which over three centuries has embodied the unity of civilisation of the peoples of Europe and the entire world.

It is symbolic that an appeal to our common ideals, the desire to work together on global problems of the modern world have been heard in the St. Petersburg appeal. This document, as you know, was passed by all heads of state and government who visited St. Petersburg during the days of celebration.

I think that both the form of our meetings and the anniversary background of the summit determined its main result. Yet another important step has been made towards bringing Russia and the European Union closer together, bringing them closer on the basis of democratic values, partnership and mutually beneficial cooperation. This is our mutual choice, and we intend to develop it step-by-step. Russia and the European Union are systematically increasing cooperation in political, economic and other spheres, and on realising the ideas and suggestions heard at the summit as soon as possible – in the national interests of all our countries, in the interests of our citizens, our business, cultural and scientific circles and societies.

We discussed topics related to the upcoming expansion of the European Union. We talked about the new possibilities which these integration processes will open up, and about minimising the expenses to maintain traditional links between Russia and countries that enter the EU, and with the European Union as a whole.

As you know, we were able to find mutually acceptable solutions to the problem of “Kaliningrad transit”, expecting other problems and questions that arise will be examined in this spirit of partnership.

One complex topic is removing the visa barrier between Russia and EU countries. I am certain that both countries of the European Union and citizens of Russia will benefit from this. Of course, this will need time and considerable efforts, including from Russia, and we fully acknowledge our responsibility. But we have set ourselves this task, and we intend to move towards it step-by-step.

Together, we also noted significant progress in working on the concept of a common European space, and also on the advancement of energy dialogue between Russia and the EU. The joint declaration passed at the end of the meeting contains fundamentally important guidelines for further development of multi-faceted strategic partnership with the European Union, and the formation of a common economic space – a space of freedom, security, justice and scientific research.

On my way here, I even talked with Mr Prodi about this very important component of our joint activity – education and cooperation in the sphere of external security.

To achieve these major goals, we must further improve the mechanisms of interaction between Russia and the EU, and the upcoming transformation of the Cooperation Council into the permanent Partnership Council is a key element in this process.

In conclusion, I would like to thank our guests and partners for participating in the anniversary celebrations, and for their very cooperative work, not only at the summit today, but also during the rather difficult work on reaching an agreement on positions and documents at expert level. We truly hope that our partners have a lasting impression of our joint work in Petersburg, of our country and the city which we have gathered in.

Thank you very much for your attention.

Question: Mr President, first of all I would like to congratulate you on the city anniversary. And I would like to ask you how long we will have to put up with the fact that so many people are forced to stand in lines to cross the border.

Vladimir Putin: First of all, thank you very much for your congratulations on the 300th anniversary of Petersburg. And thank you for your question, it is an extremely relevant one. Of course, we cannot, and should not – and I was pleased to note once more that our European partners do not want it either – let the Shenghen wall to become a sort of Berlin wall dividing Europe.

I must say that the problem of illegal immigration to European countries is not only connected with the visa regime, but also to a lesser degree with several domestic laws in certain EU countries, which essentially stimulate an influx of immigrants. And this is a common problem. Of course, Russia has to solve many issues itself. This concerns strengthening our own internal borders, passing appropriate laws, including laws on readmission, and regulating our issues and problems with our closest neighbours.

They are objective issues which we should respond to together – both Russia and the European Union. We do not intend to evade responsibility and jump over any boundaries and stages. We must pass through them all. The most important thing is that there is a common desire to travel this path. In my opinion, this desire exists.

The issues that we noted today in the document, to be honest, were not easy to solve. On several problems which seemed obvious to us, we still had to prove the necessity of at least the way the issue was formulated and its solution in the future.

At the same time, and I can tell you this as representatives of the Greek media, we have very good relations and business contacts with Romano Prodi. We are constantly in contact, and a lot depends on him, but just as much depends on the Chairman of the European Union, who has occupied this position for half a year. During the chairmanship of Konstantinos Simitis, during the chairmanship of Greece, the quality of relations between Russia and the EU have improved, and we have made progress on several issues – also thanks to his support, the support of Greece. So I would like to thank him in your presence for the joint work that has been done over this half-year period

Question: But which currency do you prefer: the dollar or the Euro?

Vladimir Putin: The ruble. (Laughter, applause).

Question: I knew it. And also, please remember that in the debriefing sessions, the press centre was organised magnificently. We had the chance to be present with you in all areas…

Vladimir Putin: As for the ruble or the dollar, I can say that the Central Bank of the Russian Federation has accumulated very large gold and currency reserves by Russian standards. When I began my term as President, three years ago, they totalled 11 billion dollars, and now they total 60 billion dollars and are increasing constantly. But the Central Bank made the decision to keep a portion of the gold and currency reserves in Euros. This is the first point. And secondly, the European Union is a major trade and economy partner for us, and as the European Union expands, if we will overcome difficulties in interaction in the economic sphere, the growth of goods turnover will grow, and this will undoubtedly lead to an expansion of the Euro zone in relations between Russia and Europe. This is an inevitable result of the expansion of our interaction, so what we are doing today is in the sphere of interest both for Russia and the European Union.

Question: As for Iraq…

Vladimir Putin: Iraq? You know, I think, that we worked quite well with the UN on this issue, and essentially, with the passing of the last resolution, we began to return this problem to the UN platform. I must say that many made compromises, and I think that the result is good.

Our American partners are coming to meet us halfway, and President Bush personally has done a lot for this. I would also thank Prime Minister Blair for his active efforts in cooperation, who was, as you know, in Moscow before the resolution was passed. At the time, we were unable to tell the press everything that we agreed on, because it was not completely clear whether we could reach an agreement or not, but his visit was a key factor in solving this problem.

Thank you very much.