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Vladimir Putin: Good afternoon, ladies and gentlemen,

We have just had talks with the President of Bulgaria Mr Parvanov. As you know, the Russian-Bulgarian dialogue at the summit level is a regular one. It is marked by frankness and mutual trust. During our talks yesterday and today we discussed in detail many aspects of bilateral cooperation, laid down guidelines for our interaction in the trade, economic, cultural and humanitarian areas. That involves joint projects in the fuel and energy sphere and increased Russian investments in the Bulgarian economy. We discussed the plan of our joint participation in the Bulgarian Days in Russia due to open in Moscow on September 29 this year, and we see these events not only as an important element in developing Russian-Bulgarian relations, but as part of the process of the formation of the Slavic Cultures Forum, which we also discussed today. We believe there is a considerable untapped potential for effective development of direct ties between regions and we intend to support these activities.

We have reviewed the treaty and legal basis of our relations and the prospects of improving it. In the first place we are talking about the documents that are called upon to ensure the interests of the people of both countries in the social sphere. We welcome Bulgaria’s wish to become integrated in the European community. It is important to join efforts to avoid possible negative consequences for our trade and economic cooperation: tourism, youth, cultural and scientific exchanges. I have the impression that my opposite number, Mr Parvanov, shares my point of view. One of the topics we discussed today is the visa regime. We share the understanding that a solution of these issues is in the interests of both countries. It is particularly felt in the sphere of tourism. I think that everybody understands that.

We have confirmed the closeness of our approaches to the key problems of world and European politics. We share many views on regional issues, including the securing of peace and economic reconstruction in the Balkans. We paid much attention to looking for ways of a more effective interaction at the UN Security Council and other international organisations. One of the key areas of our joint work there is to counteract international terrorism and other threats to European and world stability and security. That takes on added importance considering that Bulgaria is now a member of the UN Security Council and that it will assume the presidency of the OSCE in 2004.

For our part we are ready to render every support to the Bulgarian presidency of the OSCE. Our Bulgarian colleagues face important tasks: increasing the role of the OSCE in ensuring European security and of course the development of all-European cooperation, the goals we will of course support. We wish our Bulgarian partners success in that responsible mission. Summing up, I would like to stress the main thing: we have become reaffirmed in our conviction that we have common basic interests and that we are committed to developing and deepening the traditional friendly relations between our states.

Thank you for your attention.

Question: Mr Putin, do you think that there are still too many administrative obstacles in the development of Russian-Bulgarian relations and a new political partnership? What are Russia’s expectations of the Bulgarian chairmanship in the OSCE?

Vladimir Putin: As for administrative barriers, there are always too many of them – in business and in the development of relations between people. Our task is to pinpoint these obstacles and remove them, without creating new ones. The Bulgarian President and I talked about this a great deal both yesterday and today. As I already said, we welcome the integration of many Eastern European nations into the EU, but also expect that this will not create new restrictions for people to meet and for business. Because if there are new restrictions on business, then this will have a negative effect on both Russia and our traditional partners.

As for cooperation in international organisations, I have already said that Bulgaria is now a permanent member of the UN Security Council. We are in contact in the joint work on key issues of the international agenda. We expect that in the OSCE, Bulgaria will handle the difficult tasks that lie ahead for it as chairman of this organisation. We think that for the OSCE to fulfil all the tasks that are entrusted to it when it was created, it must diversify its activity, and must not isolate itself to any regional, narrow problems, however important they may be, and should meet all the requirements for which it was created. It was created to solve problems of general European security. This means that threats need to be determined, and then acted on. What are the threats that we now see before all of mankind, and before Europe? Above all, the threat of terrorism, ecological problems, and a number of other issues which we all know about very well. Attention must be concentrated on consolidating the entire international community and all of Europe in fighting these threats. We wish Bulgaria success.

Question: I have a question for both Presidents. Could you tell us in more detail about the plans of Russian energy companies for development of relations with Bulgarian partners – in gas, oil, electricity, and also about the increase in Russian investment? Could you also tell us in detail about the political situation in the Balkans?

Vladimir Putin: We expect that interaction with Bulgaria in the economic sphere will not be restricted to problems of energy alone. And there is every reason to believe this. But, of course, issues of energy cooperation are among the most important in economic cooperation between Russia and Bulgaria. Here there are several directions of activity. The Bulgarian President has just named them. The first is nuclear energy. The nuclear power plant in Bulgaria, in Kozlodoe, was built with the technical assistance of the Soviet Union. Now two blocs have stopped working, and the issue of starting them up again does not involve the third and fourth blocs, as far as we know there is currently discussion in Bulgaria on whether to stop them or not. I can tell you the economic reasons for Bulgaria as we envisage them. Our European partners, essentially, propose a new construction project which will cost Bulgaria $2 billion. It is also proposed to build energy facilities which Bulgaria will not need even in the most optimistic scenario for the country’s economy. The Russian partners propose to reconstruct the third and fourth blocs, and reconstruction of each of them will cost Bulgaria $150 million. So calculate the difference between 2 billion and 300 million. It is very large. This is the first point. Secondly, from the standpoint of safety and effectiveness, these proposals fully conform to international standards. And our specialists are working with the international energy community so that any concerns on this issue are removed. I just talked with the nuclear energy minister, and he confirmed everything that I have just told you. We are indeed prepared, as the President said, to also work on building new facilities. At the same time, I can tell you right now that the Russian proposals are half the cost, and are of the same level of quality as the proposals of our partners in the energy community. The final decision, of course, will always lie with the Bulgarians.

The second direction is gas cooperation. I talked with the head of the Gazprom administration yesterday. Gazprom confirms that it is interested in developing cooperation with Bulgarian partners. We are pleased that we removed intermediaries from the economic production chain whose presence there we considered to be unjustified. We will increase our presence in Bulgaria in accordance with the wishes of the Bulgarian side. We will increase the transit of Russian gas through Bulgarian territory to the volumes that the President mentioned. We also expect that if the decision is made to privatise Bulgar-gaz, Russian companies, primarily Gazprom, will not be given worse conditions than other participants in possible tenders.

And finally, cooperation in the energy sphere. The President raised this issue with me yesterday. As the head of Unified Energy Systems told me yesterday, our leading company is ready for this joint work. We are ready not just to take part in privatising appropriate facilities, but also to participate in work on networks.

We are prepared to increase, or rather renew deliveries of electricity to the Bulgarian market through Ukraine and Moldova. As you know, we have already reached appropriate agreements with Ukraine and Moldova. And we are absolutely certain that from an economic standpoint, Bulgaria will receive significant advantages from this.

As for Russian investment, in our assessment it is not currently at a very high level, but it is still significant for the Bulgarian economy – around $500 million. The company LUKoil has invested $340 million since 1999 and is preparing for new investment. Especially as the project for building the Burgas-Alexandropolis oil pipeline is advancing, if with difficulty. And I would like to stress once more that the Russian side is interested in its realisation.

What the Bulgarian President said about the Balkans just now is very important. We agree absolutely with this approach. And on our part, we can only direct attention to problems which have not been solved. We talked a lot about the problem of Kosovo. Let us remember how the international community reacted to the exodus of the Albanian population – 25,000 left, then 35,000, 40,000 – it was a humanitarian catastrophe. And people really suffered. We were right to direct attention to this. But now 200,000 Serbs have left their native land and cannot return. And there is silence. This is absolutely wrong and unacceptable. We should approach solutions to these problems in a balanced way, and be consistent in our efforts to establish peace and order, and only then will these efforts be effective.