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President Vladimir Putin: Good evening, ladies and gentlemen,

My meeting with Viktor Andreyevich Yushchenko has just taken place. As I said at the beginning of our meeting, I think it is deeply symbolic that the newly elected president of Ukraine has chosen to make his first visit abroad to Moscow. We are grateful to him for accepting our invitation.

We discussed the entire spectrum of our relations with Ukraine today. We have a great amount of work to do together. Of course, the focus was above all on economic issues. In this respect we discussed our bilateral relations and the integration processes underway, including within the Common Economic Space. We realise that the new Ukrainian leadership needs some time to become more familiar with the matter and gain a more detailed, inside, understanding of the processes taking place in this area. We have met with a positive reaction and we hope that our work together in this area will be effective.

We discussed energy sector issues and cooperation in other sectors of the economy. Of course, we also gave a lot of time to our political cooperation and our military-technical and military-political cooperation. Here too we have a good number of issues on the agenda.

I would like to note the frank and open nature of our talks and the positive spirit our Ukrainian colleagues showed. I do not see a single question that could be cause for misunderstanding or that could give rise to complications for our cooperation. On the contrary, I would like to thank Viktor Andreyevich for his constructive approach and for the spirit of trust in which both the first and second parts of our talks took place. We are satisfied and we hope that very soon, as the President and I agreed, we will be able to instruct the executive authorities, the governments of Russia and Ukraine, to prepare a number of proposals on stepping up our work together.

Thank you very much for your attention.

President of Ukraine Viktor Yushchenko: Dear Vladimir Vladimirovich, ladies and gentlemen,

For my part, I would like to note that our position is that Russia is a permanent strategic partner for Ukraine. It is here that Ukraine’s strategic interests are formed, and this is why my first visit is here, as a mark of respect and tribute to these relations.

I would not like for Moscow to be full of myths and legends concerning my political position and the views of my partners – myths and legends more suited to the 1920s-30s. We, the new authorities of Ukraine, are an open and democratic force who won the elections honestly and who view Russia as a strategic partner. Of course, the outcome of our talks today was that we, the new Ukrainian authorities, must work together with our Russian colleagues to resolve the questions that have still not been settled and the problems that remain to be dealt with.

It is our view that there are immense possibilities for developing our bilateral relations in various economic sectors and in the humanitarian sphere.

Today’s talks focused on what I would call a number of strategic issues concerning Ukraine’s position within the Common Economic Space. As there are many journalists here today, I would like to share with you our position, the position of my future government, regarding the Common Economic Space. We take the view that our relations with Russia should be given as much of a formalised framework as possible. Questions regarding movement of capital, property, labour, the organisation of tax, customs and other relations, naturally require formal solutions. Not to do this would weaken the further development of our relations. We believe that these principles could be laid as the foundation of our bilateral relations and as part of multilateral agreements which in fact constitute the Common Economic Space. We do not reject the Common Economic Space, but concerning the substance of the matter, we wish to emphasise one thing, and that is that we are guided by two principles that make it possible to find an answer to any question within the framework of this agreement.

The first principle is that positions taken must satisfy national interests.

The second principle is that the principles set out in the agreement on the Common Economic Space should not go against or block the road to entering and developing other markets.

I think these are clear principles and I am grateful to Vladimir Vladimirovich and his colleagues who were present at our talks for reacting positively to these positions. It is our view that 2005 should be a year of successful policies for our bilateral relations. I think that by the time of the next visit to Ukraine the government will have been formed and we would like to present each other with a package of proposals that Vladimir Vladimirovich and myself, the governments of Russia and Ukraine, can put forward as a basis for bilateral relations for 2005, as objectives that can be met within this year and issues that can be successfully resolved. I am grateful to the Russian side and the Russian President for the invitation and for the attention and the sincerity that was evident at our talks. This gives cause for optimism about finding solutions for the issues that Ukraine and Russia must settle as part of their bilateral relations.

Question: How do you view the new Ukrainian government? And a question for Viktor Yushchenko, why is it Yulia Timoshenko who has been named as acting Prime Minister?

Vladimir Putin: I don’t think we can give our assessment of the new Ukrainian government. For a start, it has not been formed yet, and secondly, it is the citizens of the country concerned who should assess the results of their government’s work. Viktor Andreyevich gave me a general outline of his plans and I am grateful for that information.

Viktor Yushchenko: You know, I am not a novice to Ukrainian politics. When I was appointed to head the Ukrainian government four years ago, I took the view there must be people who can automatically resolve the problems the authorities had put before them.

Today I can say that during my election campaign I did not just make promises; I know how to fulfil these promises and I know who can resolve the problems facing Ukraine today. This is why, based on political consultations, Timoshenko was the most suitable candidate of all those proposed. I hope and I am certain that she and her cabinet will be successful, as successful as was my government in 2000–2001.

Question: Could you please clarify for us how you view the bilateral documents signed by the previous Ukrainian government?

Vladimir Putin: We discussed all these questions. I already said in my introductory remarks that there is not a single problem we did not discuss. Our discussions took place in a spirit of understanding and the realisation that we need to keep moving forward and develop our contacts in all areas, in the humanitarian sphere and in the economy. We discussed cooperation in the energy sector, including regarding the creation of a consortium. As we understood our colleagues, they intend to continue building on the previous policy regarding relations with Russia. This also goes for the plans to set up a consortium together with our partners in western Europe. As is known, we initially brought into these plans our partners from Germany, but we do not rule out having companies from other European countries also becoming involved.

Viktor Yushchenko: You know, I began these talks with Vladimir Vladimirovich with a little story about how, when I was Prime Minister, here in this office, I think, one of the first things I said was, “Vladimir Vladimirovich, I don’t want to represent a government that steals”. I was referring to the unsanctioned siphoning off of gas. In the course of a few months, I am certain, we were able to settle this problem, provide transit guarantees, settle debt servicing issues and other questions relating to gas policy.

At that time, we, the two Prime Ministers, said to President Putin and President Kuchma that the gas problem was settled now for the next 15 years and there are sufficient grounds for saying that this subject has been thoroughly worked through.

Our position today is that Russia has unique energy possibilities and Ukraine has unique transport opportunities. All of this works in favour of the consumer. We want to propose to Russia that we move forward together, take each other’s interests into account and organise our joint efforts as a part of forming an energy market that would also be part of the European energy market and in which Ukraine and Russia would act as interested partners able to pursue a common policy in this area. This is the main thing for us today.

As for other issues, I think we have found real mutual understanding. This concerns economic development and humanitarian issues. I am therefore satisfied with our talks today and I would like to say once more that I am grateful for the atmosphere of trust that developed during these talks.

Vladimir Putin: Concerning gas transport, I can add that Russia exported more than 100 billion cubic metres of gas via Ukraine to Europe last year. This year we plan supplies of 112 billion cubic metres. Last year, Ukraine received $1.5 billion in payment for the transit of Russian gas. That’s not bad, is it. We plan to expand our cooperation in the future too.