Official website of the President of Russia

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Chancellor Gerhard Schroeder: Ladies and gentlemen!

Yesterday, at the opening of the Hannover Fair, I spoke about how important the strategic partnership with Russia is to me. I say this consciously at this time, on the eve of the 60th anniversary of the end of World War II, a war which brought such misfortune, hardship and death to the peoples of the Soviet Union, of Russia, and, of course, to the people of Germany and all the peoples of Europe.

We have a great interest in increasing our cooperation in various sectors, in the economy, in culture, and, of course, in our excellent political relations. You can be sure that here, at the Hannover Fair, the focus is above all on our first-rate economic relations.

Our discussions were not restricted to our relations in the energy sector. Of course, this sector is of great importance to us because Germany does need natural resource supplies from Russia, as there is a tense situation today in the regions where Germany has traditionally got its energy supplies. So, we did discuss our relations in this area. Today, these relations have reached a historic new level because now we are talking about having a German company taking part in extracting natural gas in Russia together with Gazprom, and this is something I consider especially important.

But we talked, of course, not just about the energy sector. We also discussed our cooperation in other sectors such as aviation, agriculture and trade. And I hope that we will be able to develop our relations in these areas to the benefit of both countries, and not just bilateral Russian-German relations, but also relations between Russia and the European Union. I think we will make considerable headway in this area during the EU-Russia summit that will take place in Moscow on May 10.

President Vladimir Putin: Mr Federal Chancellor, Ladies and Gentlemen!

Economic relations were the main item on the agenda of our bilateral meeting today. We, of course, are very pleased to have this opportunity to show all that Russia can offer in various sectors here at the Hannover Fair, which has been running for decades now and is an event at the centre of business life not just in Germany but in the whole world.

The focus of our talks was primarily on increasing mutual investment and building up production cooperation in a wide range of areas, including in science and the high-tech sectors. We have a good number of very promising projects in the fuel and energy, machine-building, innovation and communications sectors.

I would like to note that today’s agreements show how important cooperation is for both our countries. I will not repeat the already well-known figures on our bilateral trade and how it has increased over recent years. I would just like to mention a few agreements so that people in both Russia and Germany can see that we are talking about very concrete projects that are of importance for the lives of our peoples both now and in the future.

The agreement between our company, Russian Railways, and German firm Siemens, will run through to 2015. Russia plans to invest around 1.5 billion euros in this project. This is a figure that speaks for itself. We will be placing our orders with German companies through to 2015. This will make it possible to preserve jobs and maintain and develop production levels. For Russia, with its vast territory, this will mean receiving new technology and developing our transport infrastructure.

We are witnesses to a very important agreement in the energy sector today. This agreement between Gazprom and German company BASF is not just an ordinary event but signals a new stage in cooperation and the exchange of very valuable assets. This is a step towards mutual economic penetration in a very important area of the energy sector. This is the first time that Russia has taken the step of allowing a foreign company to take part in gas production in the Russian Federation. In exchange, Gazprom is to receive not money but assets from its German partners – a 49-percent stake in the pipeline, that is, in the transport system located on German territory, and the possibility to take part in gas distribution. The partners have also agreed that they will work together on development projects in third countries, including in the North Sea. This will definitely have a stabilising effect on the energy situation in Europe and the world.

Another agreement, that between Russia’s Vneshtorgbank and Germany’s Deutsche Bank, is more modest in scope but has special meaning, in my view. This agreement concerns Deutsche Bank providing financing for Russian exports not just to Germany but also to other countries. I think this is a very significant development in our cooperation. Now, German financial institutions will be involved in supporting Russian exports.

We discussed how implementation of the decisions adopted at the bilateral state consultations in Hamburg on December 20–21, 2004, are progressing. As you saw, we also signed today the Joint Declaration on Strategic Partnership in Education, Scientific Research and Innovation. In other words, the Chancellor and I are working personally on the most important issues.

Of course, we also discussed relations between Russia and the European Union. Germany is one of the driving forces of European integration and we are grateful for its firm commitment to bringing Russia and the EU closer together.

Today is International Day of the Liberation of Prisoners of Concentration Camps and on this day, the Federal Chancellor and I pay tribute to the victims of World War II. We are sincerely grateful to the German people, the German authorities and Germany’s public organisations for the care they show in preserving the memory and looking after the burial sites of Red Army soldiers here on German soil.

In conclusion, I would like to thank all our German colleagues and the Federal Chancellor for their excellent organisation of our work and for their warm and very hospitable welcome.

Question: You mentioned a strategic partnership in education, scientific research and innovation. Could you explain please how this partnership would work in practice and what funding would it receive from Russia and from Germany?

Gerhard Schroeder: You have to remember that this is an agreement in areas that are primarily the responsibility of the federal lander. What the President and I have done is to jointly organise youth exchanges and set up a mixed form of financing. In other words, there will be both state and private financing. Because the different federal lander have different powers in this area I cannot give exact figures, but I can say that this partnership concerns both work by universities and work outside universities, and is oriented on the long term.

Vladimir Putin: Just to add a couple of words. Let’s assume, we are working together on a programme to train specialist personnel. Germany has invested around 20 million euros in this programme. But I want to point out that the overwhelming majority of these Russian specialists who have received this training are working either for German firms in Russia or for companies focused on the Russian market. So this is not money thrown down the drain, it is money invested in developing our economic ties. For its part, Russia is also investing adequate funds in these sorts of programmes.

Question: I have two questions. The first is for the Russian President. After the collapse of the Soviet Union, Russia took on the debt commitments of practically all of the former Soviet Republics. I wanted to ask, how much of a burden is this for the Russian budget, and do you not think it might be fair to review some of these agreements? After all, many of these republics are now sufficiently independent and able to pay for themselves, are they not?

My second question is for both leaders. Russia has said it wants to pay off its debts to the Paris Club ahead of time, but has nonetheless asked for a discount. For their part, the Paris Club creditors have spoken of a premium. Which scheme do you see as the optimum choice, and what is Germany’s position on this issue?

Vladimir Putin: Concerning Russia’s decision to take on the debt commitments of the former Soviet republics, I think this was a mistaken decision. Unfortunately, we are not able to review it now and we have no intention of doing so. We always fulfil our international commitments. To be fair, I must also say that none of the former Soviet republics, with the possible exception of Kazakhstan, are in a position to service the debts they would have inherited from the Soviet Union.

As for paying off our debts ahead of schedule, we are indeed holding talks with the Paris Club on this issue and it is in our economic interests to pay these debts off ahead of schedule because the conditions under which these debts were incurred are, from my point of view, very burdensome. We are paying billions of dollars in interest alone. We would certainly like to free ourselves of this burden and be able to use the money that would become available to develop the Russian economy and address social issues.

As for the specific solution to this debt issue, the specialists and experts are currently working on our proposals. I have grounds to believe that they will arrive at a solution that will be in the interests of all the parties involved.

Gerhard Schroeder: I can only confirm this, especially the last point.

Question: When talking about Russia, people always talk about oil and gas, but Russia also has huge reserves of coal. Is there even minimal interest in the coal industry, not the most fashionable subject today, in Germany?

Gerhard Schroeder: On the contrary, it is a fashionable subject, even a modern one, you could say. Indeed, we have been examining issues related to coal particularly closely of late. This is linked to growth in the steel industry, primarily driven by demand from China and India, who buy steel from whoever is offering it. I think that in general this is a very good sign and shows that there is growth in this industry.

But if we talk about coal, we also need to talk about coking coal. Coke is made from coking coal and we are already examining the possibility of investing in certain enterprises producing coke in the Westphalia region. So this is indeed a topical subject because we want to give our energy supplies a new foundation. Of course, this is to do with the rising oil and gas prices, but it is also to do with developments in the area of alternative energy sources. Lignite and coal will certainly play a part in ensuring electrical energy supplies in the future.

Vladimir Putin: You have raised a very important subject that brings us back to the energy sector. Let us not forget that today we witnessed a very important agreement between Gazprom and BASF. In essence, this signals the start of construction of the North-European Pipeline, in which BASF will have a 49-percent stake with the right to sell certain sections in order to attract investors from other countries or other investors from Germany. As for coal, the governor of the Kuzbass region in Russia, where most of the coal is mined, even raised the issue at one meeting of the need to reduce or halt the increase in production in order not to create a glut on the market. They are exporting a lot of coal today, much more than during the Soviet years. I fully agree with the Federal Chancellor. Incidentally, we mine precisely the kind of coal that is used most actively in the steel industry. Market demand is very high in this area and Russia will take a most active part in this joint work.