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Vladimir Putin: Mr Federal Chancellor, ladies and gentlemen,

The annual Russian-German intergovernmental consultations have just come to an end. And this time they were held in the very heart of the Ural region – in Yekaterinburg. And I would like to make use of this opportunity to thank once again the city leadership and the city residents for their hospitality. I think that the expansion of the geography of our bilateral meetings is also a good support for regional cooperation.

The Federal Chancellor and I have met in various formats over twenty times since 2000. This intensive contact fully reflects the dynamics of Russian-German interaction. Furthermore, as the consulting format allows, here, in Yekaterinburg, Russian and German ministers have been working at the same time. They have reported to us the practical results of work in their areas and long-term plans.

The positive results are clear. Bilateral trade turnover has grown since 1999 by 80%, and is now 25 billion euros. Germany is not just our leading trade partner; it is also the leader in investment in the Russian economy – around 17%.

We plan the advancement of industrial cooperation, especially in high technology and science-intensive areas. Here there is already a whole range of interesting ideas and projects. And we have ordered our science ministers to organise a specialized forum on high technology in 2004.

The strategic group on issues of trade, economic and financial cooperation is also working effectively. It has given support to a series of projects in the areas of energy, transport, aviation, space, automobile construction and metallurgy.

It is now 30 years since large-scale deliveries of Russian gas to Germany began. The energy sphere remains a strategic area of cooperation today. Next year an energy summit of leading Russian and German companies will be held, which I am sure will allow significant expansion of our energy dialogue.

Among other themes of general European significance, we discussed the wide prospects for cooperation in the transport sphere, such as between Russian Railways and Deutsche Bahn.

Cooperation has also been discussed on dealing with emergencies. The initiative of the Russian Emergency Ministry for creating a European centre to combat catastrophes has received support.

I would like to note that in recent months, Russia and Germany have been working very intensively on key issues of international politics. We have similar positions on almost all issues, including the restoration of Iraq with the leading role of the UN, and regulating the situation in Afghanistan and in the Middle East.

Generally, Russia and Germany are united by a common adherence to the principles of a democratic, fair world order, and consolidation of the UN and institutions of international law.

The Federal Chancellor and I have decided to create an interdepartmental working group on fighting international terrorism, non-proliferation of weapons of mass destruction and opposing the drug threat. This is real confirmation of the high level of our partnership.

We fully understand that in the fight against common threats, the widest possible cooperation of all nations is needed. Following this logic, we have signed an intergovernmental agreement on the transit of German personnel and military equipment through the territory of Russia for participation in operations on stronger security in Afghanistan. This is a concrete contribution of Russia to strengthening the UN in this region. But I should say that it is also another aspect of our practical interaction in cooperation with NATO.

Another result of our talks is that interaction in the framework of G-8 initiatives has been confirmed. After the summit in Kananaskis, significant progress has been made on implementing and coordinating our projects to destroy chemical weapons, and scrap Russian atomic submarines whose service period has expired. The subsequent realisation of measures in this sensitive sphere will be helped by the agreements we signed before the consultations, and also the important interdepartmental agreements we signed here, several minutes ago.

The Federal Chancellor and I are unanimous in the opinion that one of the key links in our good-neighbourly relations is the development of cultural, youth and education exchanges. The large-scale campaign “Russian-German meetings 2003–2004” has particular significance here, and the Year of Russian Culture in Germany is being held within the framework of this campaign with great success.

We also agreed to continue to support the development of direct contacts between schoolchildren and students of our countries. We see new possibilities here in connection with Russia joining the Bologna process, and the decision of the German side to extend the programme for training Russian specialists to 2007.

We discussed in detail issues in the visa sphere. The Russian side consistently fulfils its obligations in the advancement of a visa-free regime with the European Union. We have also discussed founding a general consulate of Germany in Kaliningrad. We expect that this decision will help to solve some of the problems in the visa sphere for Kaliningrad residents.

We also believe that the simplified visa regime should, above all, affect youth and cultural exchanges. Foreign ministries have been ordered to prepare a special interdepartmental agreement on this in as short a time as possible.

In conclusion, I would like particularly to stress our readiness and aspiration to establish partner relations with Germany for the long term. To develop them at all levels and in all areas.

Thank you for your attention.

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Question: My question is for the Russian President and the German Chancellor. You meet often. Would you say that these meetings bring results, and that the trusting relations that you have developed between yourselves are also spreading to Russian and German politicians and businesspeople, the people who give bilateral relations their substance?

Vladimir Putin: You know, when we parted yesterday I had precisely this thought that the more often we meet, the more open, trusting and informal our dialogue becomes. Of course, now the ties between our states have reached a very high level, and we’re happy with this, but this does not mean that we have no problems.

The problems we have, we come up against them constantly in our daily lives. But the level of trust in our personal relations does enable both our countries to resolve these problems more effectively. At the meeting between our business communities today we noticed a positive mood on both sides. Of course, the people working in this area are not happy with everything, but there is clear progress being made in our bilateral economic relations, progress both in what we have achieved thus far and in our plans for the future. I would like to hope that even a tiny part of the positive results we are seeing is also thanks to the cooperation between the Federal Chancellor and myself.

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Question: Mr President, why did you choose Yekaterinburg as the venue for this meeting?

Vladimir Putin: We want to broaden the geography of our meetings, and we think they should take place not only in Moscow and St Petersburg. The Urals is one of Russia’s most industrially developed regions. German companies are well represented here and are working actively. The governor told us today about the major projects the region has planned. German entrepreneurs and companies are involved in almost all of these projects. In terms of contracts, this represents tens of millions, and perhaps even hundreds of millions of euros.

The German Minister for Family, Elderly People and Youth Affairs also rightly pointed out that it is important today to broaden the geography of youth exchanges and other contacts. These exchanges should not be confined to young people from Moscow and St Petersburg, but should also be open for young people from other parts of Russia. In my opinion, bringing meetings like this one closer to the regions will help to address this task.

Today Eduard Ergartovich [Rossel] showed us a little statue of the mistress of the Bronze Mountain, as was told in Bazhov’s tales. She is the keeper of the riches of the Urals and opens the way to these riches only to decent, honest and hard-working people, which definitely includes our German partners. On behalf of the governor and myself, I would like to present this silver statue to the Federal Chancellor.

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Question: Do you think it would be better to pass the new United Nations Security Council resolution on Iraq before the conference of donor countries takes place in Spain? And a second question: is Russia considering the possibility of using the euro as a currency for oil transactions?

Vladimir Putin: We would very much like to see the Security Council reach an agreement on the resolution before the conference. I think this would provide a good basis for the conference’s work. While still in New York, I told the Federal Chancellor and the French President that we would take part in the conference, most likely as an observer. We want to be informed about what is going on in this area. I think that Iraq is in need of very sizable funds, and their effective use is possible only if political settlement is achieved.

Your second question was about settling oil transactions in euros. Of course, this is possible. It does not depend on us alone, though. Russian market participants sell oil and petroleum products on the world markets and the corresponding exchanges, and trading there is done in dollars.

Overall, we don’t rule out the idea. We think it is quite possible if this is of interest to our European partners, because, as you know, Russia has just recently moved into first place in the world in terms of daily oil production. We have overtaken all the other producers in terms of total volumes produced. But we do not want to upset the price policy on the world market. We think that prices should be fair and not too high, but not too low, either. This is why we will keep careful check and control of our production volumes and the volumes we transport.

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Question: Mr Chancellor, Mr President, you have just spoken about the convergence of your views and about common positions on many international issues, including Iraq. What has motivated this convergence? Is it tactical interest, or is it a strategic rapprochement?

Vladimir Putin: I think our relations are strategic in nature, and I think this is not because we happen to get along with each other on the personal level and have become good friends, but because, more than anything else, the state interests of Russia and Germany coincide in many areas of bilateral relations and international life.

I am pleased to see that there is a certain national consensus now in Russia regarding the development of our relations with Germany. Practically all our different political forces that argue with each other, and sometimes argue very hard, are positive about the development of relations with Germany.

I see a similar picture in Germany. I do have the opportunity for contacts with the leaders of the opposition in Germany. I know their views on developing relations with our country, and this gives me every ground to say that Germany is serious about its desire to build long-term relations with Russia. This is not a matter we approach only from the point of view of current interests; it is something we view in the perspective of Europe and the world’s historical development. In my view, this is a very solid foundation for developing ties between our states.