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President Vladimir Putin: Ladies and Gentlemen,

Allow me to inform you on the subjects and problems we discussed today.

I would like to begin with a few words on relations between Russia and the European Union. I want to stress that the Moscow summit in May marked the completion of what we consider to be a very important stage – that of approving the “roadmaps” for the four common spaces between Russia and the EU. Now we must put in place the mechanisms for carrying out these agreements. I informed my colleagues today on how we have organised this work in Russia. Here, in Kaliningrad Region, we had a detailed discussion of development prospects for the region in the context of the EU enlargement that has taken place.

We have been able to settle a number of pressing issues over recent years. There is a good chance that Russia’s relations with France and Germany may serve as an example of successful and constructive cooperation. In accordance with bilateral agreements we have signed with our French and German partners we have done the maximum to facilitate transit of these countries’ military personnel and property across Russian Federation territory to the corresponding bases in Afghanistan.

A number of joint ventures with European capital are operating successfully in Kaliningrad Region. Contacts between small and medium-sized businesses are undergoing active expansion, and a convenient and ever-more modern border structure is being developed. It is clear that Kaliningrad Region’s successful economic development is in the interests of all our European partners and its inclusion in long-term investment projects within the framework of the EU will bring more than just tangible financial dividends. Close and multifaceted cooperation could serve as a key factor in developing the European Union’s eastern regions. Of course, we hope that this will also have a positive impact on Kaliningrad Region’s development. We also need to do everything possible to expand our humanitarian cooperation and encourage direct contacts between Russian and EU citizens, public and business circles. I am sure that these kinds of contacts bring people closer together and help them to become real friends. Ultimately, they broaden the social foundation for state partnership.

Another very important subject of our discussion today, a subject that we could call strategic without exaggerating, is the situation with reform of the United Nations and its Security Council. Our countries’ views on this matter coincide. Reform should increase the overall effectiveness and authority of this global organisation, strengthen its unity and, no less important, raise its potential to respond to new threats and challenges.

A number of different schemes for reforming the Security Council have been proposed in New York, and Russia will agree with any reasonable project that has the support of a maximum number of states. What is most important for us is that the debates on reform not lead to a split in the organisation, not provoke conflict and misunderstanding and not turn the Security Council into no more than a discussion club unable to deal with the serious issues on today’s agenda.

I also want to say that Russia will continue to support Germany’s candidacy for a permanent seat on the Security Council.

We also examined a number of questions relating to the upcoming G-8 summit in Scotland. I must say that we are satisfied with the cooperation between Russia, France and Germany within this forum. We hope that our delegations will work together even more fruitfully next year when Russia will take over presidency of the G-8.

During this time, energy security could become one of the priority questions for the G-8. I am sure that the experience we have gathered through the Russia-EU energy dialogue will be useful in preparing work in this area.

We also spoke, of course, about the development of our bilateral relations. During the second part of our meeting we plan to discuss a number of international issues.

In conclusion, I would like to thank my colleagues for the interest they have shown in all the subjects we discussed today. I am sure that the results of today’s meeting will seriously strengthen our partnership – a partnership that serves the interests of our countries and contributes to the unity, security and prosperity of all of Europe.

Jacques Chirac: Ladies and gentlemen,

Allow me first of all to thank President Putin for the reception in such a pleasant atmosphere, and for the exclusive opportunity to be here on the 750th anniversary of the founding of the beautiful city of Kaliningrad, and also for giving the name of Kant to the Kaliningrad University.

Our trilateral meetings are regular and emphasise the importance that we give to relations between Russia and the European Union. This allows us to solve and raise all problems, and in particular act as a driving force in implementing agreements and treaties made several months ago – on the four common spaces for the EU and Russia.

Of course, we are discussing issues of bilateral policies, foreign policy, culture and education. It is in our common interests to continue to develop our joint efforts in the framework of solidarity relations in the economy, politics and the cultural sphere between parties. Among other priorities are issues of simplifying the visa regime and the agreement on readmission. And we are making significant progress in this area.

President Putin has already talked about this. I will be brief: we discussed UN reform and preparation of the G-8 meeting. I would like to state that our positions are close in many ways. As for UN reform, everyone understands that this is an extremely important organisation for the future of the entire world and for continuing peaceful friendly international relations. To this end, the UN must modernise itself and adapt to modern demands. We are certain that the UN General Secretary will be able to conduct this reform successfully, in particular reform of the Security Council. On this problem, our positions are very simple and similar. The main countries which have appeared in the modern world and which make a major contribution to UN activity should receive a position worthy of their rank. We support the candidacy of Germany.

We were also happy to hear the recent statement by U.S. President George W. Bush, who confirmed the support from the U.S. for Germany’s candidacy to the post of permanent member of the Security Council. And we hope that this work will be carried out successfully. As for the G-8 summit in several days, we have discussed two main themes connected with its work.

The first is issues of development, in particular in Africa. In the framework of the “UN Millennium” programme we expect that wide agreement will be reached on aiding development, whether this concerns state and official policy – for example, in the framework of our decision, the EU, or a decision on adding to this aid, to make it an important tool for solving the socio-economic problems of Africa.

On the second issue, the climate, our talks were difficult. It seems that we are focused on agreement, and as you know, France had to put forward a whole series of conditions and take a firm position on possible agreements and understandings.

These are the problems that we discussed. We will continue our discussions over breakfast, in particular discussions on international relations.

Gerhard Schroeder: Thank you very much, ladies and gentlemen.

You understand, the proposal by Mr Putin at this time and on this occasion moved me deeply. This concerns what happened after lunch at the old respected Albertina – the Kaliningrad University will be given the name of Immanuel Kant. And you know just as well as I do that this was one of the great European humanists. So it is very good that President Chirac is present here today.

I was very glad. This does not just move and impress me, but also a large number of other people in Germany, who have good memories of the city. But of course they are to a large degree terrible memories, provoked and initiated by Germany at the time – the Second World War. In their hearts, this city which is now called Kaliningrad will always be called Koenigsberg. I think that this is understandable, although it does not at all concern territorial integrity.

I endorse what the presidents said about the summit in Scotland. We want this to be a success: this concerns both the issues raised by the presidents – the African initiative and the climate. These will be the two main issues. But for me personally it is very important that at this summit we have returned to the initial reason for its creation – to economic problems. For me personally this involves finding a sensible balance between the major donors of oil and gas – Russia is one of them – and countries which receive these resources. A balance is required here. This does not mean talking about countries that produce oil and gas, but the prices on these resources. This means the necessity for more transparency in these markets which are shaken by stock market fluctuations. We must ensure this in the time ahead. So I am very glad that President Vladimir Putin said that the summit which he will organise will primarily deal with energy issues. These are decisive issues for the global economy. We must proceed from the position that we will achieve this, even if we do not have much time for preparation. We will make sure that certain documents and agreements are ready and that they can be signed in any case, regardless of what language they are written in – we must personally work on them.

Question: You have often said that a stable situation on Russia’s border is one of your main goals. Why did Russia literally days ago denounce the treaty on the state border with Estonia, which is the border with the European Union? Won’t this be seen as a manifestation of Russia’s imperial ambitions? And another point. The Presidents of Poland and the Baltic States were offended that they were not invited to the anniversary celebrations in Kaliningrad.

President Vladimir Putin: As for the treaty on the border of Russia and Estonia, it was not denounced, because we have not ratified it. We withdrew our signature from this treaty and acted, I believe, quite correctly. Because if we abstract ourselves from a political evaluation of the past which could be debated, even if this remained in the ratification documents of the Estonian side, we consider it completely unacceptable for any kind of juridical justification of territorial claims of one country to another country in today’s Europe. And this does not just concern our relations with Estonia. The fact of the matter is that we believe this is a fundamental issue – preserving the principle of ensuring the existing European borders. The reference by the Estonian parliament to the treaty of 1920 creates a basis for territorial claims to the Russian Federation, with which we will never agree. But we are prepared to continue work with our Estonian and Latvian partners, reaching mutually acceptable decisions. This is the first point.

Now for the second point. As for any offence taken because we did not invite someone to the 750th anniversary celebration, excuse me, but I think this was invented by journalists. Because this would be a complete innovation in diplomatic relations. In fact, we organised the celebration of the 750th anniversary of Kaliningrad-Koenigsberg as a purely internal political Russian event. Of course, today’s meeting is adjoins in time with these events, but I think that when, for example, three leaders gather as part of the Weimar Triangle, where our respected guests meet with the Polish President, it doesn’t occur to us to take offence. Or when the Visegrad Four gather. The heads of state solve their bilateral and multilateral problems in the format in which they have decided to do this. I do not see anything unusual here from the standpoint of the practice of international relations. And at the Kaliningrad celebration, at the invitation of the city and Oblast authorities, there are over 100 of our friends present from Poland and Lithuania – several delegations. We welcome them and are happy that our friends from Poland and Lithuania are sharing these days of celebration together with us.

Question: The G-8 will examine different questions, such as aid to Africa. How is this aid to be financed? Do you believe that steps will be taken to simplify passing financial measures? Will we take the path proposed by France, or will we be able to go further? As for the climate, the U.S. refuses to ratify the Kyoto protocol. So what path can be taken when aid to Africa is concerned?

Jacques Chirac: We prepared this summit intensively. The talks were difficult. As for Africa, I have already talked to you about this. The fact of the matter is that despite all the efforts the EU are making, we are certain that we will not be able to provide aid in the years to come, and we have proposed additional financing of this aid. We would call this “renewed” financing, where there may be an element of innovation. We are prepared to support the proposals of Great Britain. But here it is proposed to develop a loan. Of course this is possible. The thing is that all this money needs to be returned later. This is why, if you want to return this money, this means that you are delaying, transferring this burden to the next generation. But the problem should be solved today. So we must think. We understand that reservations were expressed on this matter. We proposed an entire series of these innovations which concern financing. For example, France proposes to put a duty on kerosene or air freight, or on tickets. As you know, these proposals will be examined. We will see what decision is passed during our next meeting.

Now, as for the climate, we are increasingly concerned. This is why we told our partners quite clearly that we will be able to pass a resolution. This is because the resolution will contain a whole series of real proposals. For example, the admission that this problem exists. Furthermore, the problem is of a scientific nature, we understand that the Academies of Sciences of the G8 countries recognise this. Furthermore, we must show strong will in developing a decision, and quite clearly refer to the Kyoto Protocol which was ratified. As you know, seven of the eight members have ratified this protocol. We must seriously reduce, as has been said many times, the volume of greenhouse gases. We know the role that these greenhouse gases play in pollution. So we are waiting for the decision of the U.S. We must admit that at the very beginning, America’s position was more moderate, shall we say, or less demanding. We are waiting for a final decision by the U.S. I very much hope that we will be able to reach an agreement in this area, that this agreement will be sufficiently clear and firm. Otherwise there won’t be a resolution at all. I very much hope that this will happen, at any rate, I cherish this hope. We recently had contacts on this issue, and I very much hope that we will be able to reach an agreement on it.

Gerhard Schroeder: I would like to add something to this. It must not be forgotten that the finance ministers, with our support, agreed on continuing the initiatives which we began and decided to implement writing off debts. President Chirac said that the EU had agreed that until 2020 0.5% of GDP will be allocated to aid for developing countries, and until 2015, 0.7% will be allocated. Just as was the case with the Cologne initiative for writing off debts. Through this other initiative, we want to make sure that money is spent on better opportunities for education, on greater access to clean water, which millions of people in Africa do not have at the moment. Adding to what President Chirac said about international financing, I would like to say that this is a good trend. I have a proposal to finance the next initiative through national budgets. For example, to avoid major epidemics in Africa. We want to create an initiative on vaccinations. I believe that this is a proposal which we could pass, if this is done.

Mr Putin: As the question was addressed to all participants of this meeting, I would like to say that we will continue to support initiatives connected with the world’s poorest countries, with African countries. The current economic financial state of Russia is such that we can effectively support any of these projects. At the same time, we think that an effective means of solving the problems of the world’s poorest countries is not so much cash injection, as changing international economic policy. We need to reduce subsidies to various branches of the economy of developed countries, to open markets, and introduce other institutional changes, as it is currently fashionable to say – this will be real aid. It will give more universality to international economic organisations.

But we support the initiatives which were made, and I would also like to note that in absolute figures, Russia is third after France and Japan in writing off debts for developing countries, and in the ratio of writing off debts to its GDP it is the first in the world. We will continue to provide assistance to developing countries.

As you know, we have joined and ratified the Kyoto Protocol. It must be said that this is undoubtedly a result above all of our joint work in bilateral format. And we of course will be interested in bringing in a large number of countries with powerful economies into this process, and will strive to follow the orders of the parliament of the Russian Federation, and think about the parameters for Russia to take part in the Kyoto Protocol after 2012.

Question: I would like to return to the development of Kaliningrad. Mr. Russian President, you said that the positive economic development of the Kaliningrad Oblast is in the interests of all European nations. We have already said that you did not invite the closest neighbours. I have a question for you – will it be possible to extend a hand to the direct neighbours of the Kaliningrad Oblast? And a question for the Federal Chancellor and the French President. There have been problems with the Polish side. Is there an initiative in Europe, where there is already a major crisis, to reconcile the neighbours and defuse the situation?

Mr Putin: First of all, I would like to say that we have been satisfied, particularly recently, with how the economy is developing in the Kaliningrad region. A very large number of enterprises are opening here with 100% foreign or mixed capital, including German capital. After lunch I plan to meet with the business representatives who are present here. Including those who came to work here not just from Germany, but from neighbouring countries, including Lithuania.

I have already said this, and can say it again: the existing format of our meetings, which has been established in the past years, does not envisage the participation of third-party countries. And we are holding the 750th anniversary of Kaliningrad as an internal political, Russian national event. Today’s meeting is taking place at the same time as these celebrations, this is true. But, for example, the fact that the German Federal Chancellor will be present at the unveiling of a memorial plaque on the naming of the Kaliningrad University after Kant, seems to me to be quite natural and understandable for everyone. Just as it would be natural, for example, if we had named the local philharmonic after the brilliant Polish composer Chopin, if his life had been connected with the life and history of Koenigsberg-Kaliningrad in the way that the life of the eminent German humanist Kant was linked with this city and this university.

As for extending a hand, we have it always extended to our nearest neighbours. We are focused on developing the most friendly and wide mutual relations with them. We were grateful for the positive mood of our Lithuanian partners in developing relations with the Kaliningrad Oblast and though incomplete but still well-disposed attitude to solving the problem of Kaliningrad transit. As you know, an enormous amount of freight from the Russian Federation to Western Europe passes through the ports of the Baltic States. And if you look more attentively, for instance, that the income item from the use of infrastructure to move Russian freight and freight into Russia is an important source of income for the state budget of these countries – you will understand that we have a very positive attitude. And in future we will continue to build our relations with our close neighbours and partners from Baltic States in this way.

Mr. Schroeder: I think that this lady was talking about the crisis of the European Union and what can be done at the moment on this matter. I have a request. Yes, there is a crisis, I do not want to deny this, this concerns the constitution of the EU. Some people have their problems with the European Union expansion process. But Mr. President Putin, I believe, does not have anything to do with it all. Let us not put at least these problems on him as well. I would be very grateful for a division of problems.

Secondly, I am grateful that I will be able to be present today at the ceremony of naming the university after Immanuel Kant. I look at this in the same way as I look at the fact that I was invited to the 60th anniversary of victory over Nazi Germany. I look at this as a sign of trust. Trust not just to me, but to Germany, and to the strengthening of Russian-German relations.

Thirdly, whom the Russian President invites to this anniversary is his decision. A decision which I should not and will not comment on.

Mr Chirac: As I was also asked this question, I will speak on it as the Chancellor did. I do not actually understand what the issue is. We have a tradition of meetings. President Putin, the Chancellor and I. We regularly meet. They are trilateral meetings. We discuss not only local problems, but also problems in which management and resolving we participate together. So I well understand that President Putin took the opportunity to show us Kaliningrad, on the occasion of this historical date. But I don’t understand at all what it means that someone should not have been invited. This is a traditional trilateral meeting. And every time we choose a place that seems pleasant and necessary to us. The Russian President chose Kaliningrad – and we are very happy to be here. I don’t think that anyone should comment on this here.

Question: You asked not to confuse the problems of the European Union and relations with European countries. Does this mean that the crisis in the EU will have no effect on relations with Russia?

Mr. Schroeder: Yes, this is how I look at it. The problems I talked about are the issue of the constitution and expansion of the EU. And here my position has not changed at all. This is a problem with which EU member countries must deal, it is a problem which they must solve. It has no consequences for what we call strategic partnership with Russia, or for what we must practice. At the Russia-EU summit it became clear what the four common spaces of our cooperation entail. They are cooperation in four areas, in security, ecology and so on. These four spaces need to be swiftly given life. This strategic partnership between Russia and the EU exists independently of problems which sometimes arise in the area of institutions. This is strategic partnership, it is a historical moment.

Mr Chirac: I agree with what was just said. Europe is going through a difficult period, which could be called a crisis. As you know, from the very beginning, when we just began to talk about European organisation, European history is a history of overcoming crises. This is a fact. On this principle, this crisis, like other crises, will be overcome, I hope. In any case, this crisis will not have any consequences for relations between Russia and the EU. For the simple reason that these relations are natural and necessary. They are necessary because of geography and history. If we want to create a world tomorrow where democracy is even more firmly established, it is absolutely necessary for Russia and the EU to have stable relations of solidarity and brotherhood. This is why this crisis will not have any consequences for Russia-EU relations.

Mr Putin: I agree with what the Chancellor said, and will allow myself simply to add that I am absolutely convinced that we are involved in a very necessary and useful matter, both for our three countries, and for all of Europe.

I just gave one example of positive cooperation – Russia’s joining the Kyoto Protocol. I assure you that if it were not the work within the “troika”, then the ratification of this protocol by Russia would be under serious question. This is the first point.

Secondly, of course in Europe and individual European countries, truly major changes are taking place. This is quite normal. But also in Russia, changes have taken place and will take place. And what we are doing together with you, colleagues, I believe will lay a good foundation for future development of relations between Russia, France and Germany, between Russia and all of Europe. And our colleagues and our successors will have to take this future into consideration, as we are changing relations between our peoples and our countries for the better. And I value this format, and I am certain, I repeat, that we are moving in absolutely the right direction.

Question: After your discussions this morning, perhaps, you will yet talk with President Putin about Iran. Did you get the feeling that the position on Iran and the nuclear programme is harshening, or will a decision be found before the decision is passed in July-August.

Mr Chirac: Indeed, this point on our agenda will be discussed over lunch, but I will tell you about it.

Mr. Schroeder: We could make a supper out of it…

Mr Chirac: It’s too early to answer your question. We are full of resolve. Like the Germans, English and French who were at the sources of initiatives of finding a decision on non-proliferation in Iran. And we are full of resolve in finding a decision which would meet the requirements of non-proliferation. And we want this decision to be found in the framework of relations between our three countries and Iran.

In the spirit of trust, we have fully included Russia in this process. We approve of its policy on Iran and the fact that Russia is taking part in these efforts. We will inform our American friends and our Chinese friends about this, as this is a very important problem. Whether there will be a proliferation of nuclear weapons in a certain part of the planet is a crucial problem. I will obviously not anticipate the decision which will be passed by the new Iranian authorities, but in any case we will continue our efforts on finding a decision which can only be one which excludes the possibility of proliferation. And I hope that we will succeed.

Question: At one time you tried to prevent the war in Iraq. You did not succeed. The situation in Iraq today shows that your warnings were not without justification. Two of you tried to deepen integration into the EU – you did not succeed. What do you say about the fact that you are now said to have lost?

Mr Putin: Do you think that if our soldiers don’t die in Iraq, then we have lost? I don’t think so. But I can say for certain: I believe that all the disagreements on the problem of Iraq should be left in the past. And today we must unite our efforts both with the United States, and with all countries who have taken on the responsibility to normalise the situation in Iraq by their presence there. They must help by their joint efforts to ensure that the Iraqi people finally take the responsibility for their lives into their own hands. And we will act thus within the framework of the Security Council and the UN in general. We welcome the international conference that was held there recently. I repeat once more, we will also look for solutions to this problem at the meeting today, and we will not return to the past to show someone that they made mistakes. I propose not to talk about these mistakes now at all.

Mr. Schroeder: I will be happy to answer your question. It used to be that we were asked a question to receive information, but now questions are asked to receive confirmation of completely absurd opinions. I do not think that not taking part in the war can be seen as our defeat. This is completely absurd. I still believe that the decision that was made then was correct. I can defend this decision before the German people and I receive backing for this.

Now for the European Union. If I am fighting together with my French partner and friend for a compromise which will ensure financing of the European Union from 2007 to 2013, if Germany, besides already paying, shows that for Germany, as for our French friends, the integration of the European Union is very important, it is clear that we are fighting for the idea of a true political union. And if this is clear and obvious, and it is clear and obvious, this does not mean that we were defeated or are being defeated. But you have the right to think like this.

Mr Chirac: I fully agree with the viewpoints expressed by Mr. Putin and the Chancellor, but I am not quite sure that we understood the meaning of the question asked. At any rate, I do not regret at all that I expressed my position.

Mr Putin: I can only add that several days ago Russia was unanimously accepted as an observer in the Organisation of the Islamic Conference. I hope that from these positions we will be able to make a positive contribution to the Iraqi problem.