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Prime Minister of Spain Jose Luis Rodriguez Zapatero: Good afternoon. Thank you all for coming to this press conference. Above all, I would like to say how pleased and grateful I am for this visit by President Putin, which will considerably strengthen the already strong and warm political and human ties that exist between Spain and Russia.

As you know, our political, economic and civil relations have all been undergoing development over these last years. This visit and the contacts between our governments have resulted in the signature of eight agreements – agreements that are evidence of the good state of our relations and that promise good prospects for our cooperation in the areas of justice and the fight against drug trafficking and also for developing our cooperation in tourism, space exploration, expansion of shipbuilding activity, finance sector activity and agriculture.

In this respect I particularly want to note the agreement on tourism because this is an area in which we have very intensive ties. Approximately 300,000 Russian citizens visit our country every year and this contributes to strengthening the relations between us – relations with roots reaching deep into civil society.

The biggest priority for the immediate future for our two countries is to develop our trade and economic ties. We have a lot of distance to cover in this area. The Spanish business community is very interested in particular in developing investment in the Russian economy, in infrastructure, construction and energy.

In conclusion I would like to say that during our talks today we discussed the main themes of concern to both countries today – above all the subject of Iran. It is my view that the Russian Federation and President Putin will have a decisive role to play concerning the dialogue and the objective horizons for peace in the Middle East following the election in Palestine, and also with regard to the situation in Iran, or rather, with regard to Iran’s relations with the international community.

I would like to repeat my words of welcome to President Putin. You know that the Spanish people are a friendly people and I am sure that our relations will continue to grow only stronger.

President Vladimir Putin: Thank you, Mr Prime Minister, for your warm words regarding our relations. First of all, I would of course like to thank His Majesty King Juan Carlos I and Prime Minister Jose Luis Rodriguez Zapatero for the invitation to visit your country and for the friendly atmosphere of these talks that have produced good results as can be seen by the large number of agreements we have just signed.

Our talks fully reflected the constructive and friendly nature of Russian-Spanish relations and our common desire to develop our ties in all different areas. We have already created a solid foundation together in order to achieve this objective.

Our political dialogue has been very intensive of late. During my talks with His Majesty the King, I thanked him for everything he has done to help develop relations between Russia and Spain over the last years. We will be very happy to receive His Majesty in Moscow, as well as the members of his family, Prince Felipe of Asturias. I have also invited Prime Minister Jose Luis Rodriguez Zapatero to make an official visit to our country and I hope that this will happen in the not too distant future.

The Prime Minister and I had a detailed discussion of all the areas in which we work together today. One of the key subjects was cooperation in security and the fight against terrorism. Both the Spanish and Russian peoples have had to confront this evil and know just what it is. We both know that terrorism threatens the very foundations of our civilisation, and we are prepared to combat this threat.

Today we adopted the Joint Declaration on the Fight against Terrorism. This agreement considerably strengthens the political and legal foundations for closer coordination and an increase of our activities in this area.

Our talks also gave a lot of attention to the development of economic ties between Russia and Spain. Trade is on the increase between our two countries but there is still a lot of unused potential we can develop. We have agreed to give a practical additional impetus to implementing interesting projects in the electricity sector, the oil and gas sector, shipbuilding, tourism and transport infrastructure, and we will make more active use of the potential of the Intergovernmental Commission on Economic and Industrial Cooperation.

I am sure that we can work together to achieve much more and considerably expand the horizons of our trade, economic and investment ties.

Finally, an important point, as my colleague noted, was the discussion of international matters. We discussed cooperation between Russia and the European Union and we also spoke about ways to improve the work of the OSCE in the light of Spain’s upcoming presidency of this organisation in 2007.

We had a very useful exchange of views on the most pressing regional problems, above all, the Middle East peace process and the situation regarding Iran’s nuclear programme. I am grateful to my colleague for his analysis of the situation in Latin America, a region where the Russian Federation is developing its relations. We know Spain’s foreign policy priorities and we know Spain’s historical experience in this part of the world and we hope that we will be able to work effectively together in this direction.

I am sure that together we can make a big contribution to resolving the main problems the modern world faces and that we will continue working in close contact and cooperation.

Question: My question regards the situation that has arisen in various countries following the publication of controversial caricatures of the Prophet Mohammed. Russia has relations with many of these countries. Did you examine this issue during your talks? Did the Prime Minister get the chance to discuss the article he wrote together with [Turkish] Prime Minister Erdogan? How do you think it is possible to defuse the tension in this situation?

Jose Luis Rodriguez Zapatero: Yes, we have a common view and we are grateful for Russia’s support for the idea of a Union of Civilisations. A publication appeared in the Danish press today containing apologies and this may help defuse this very worrying situation that had arisen and that had led in turn to demonstrations, violence and to generally intolerant acts.

In my view, discussions should always be respectful towards everything: towards ideas, ideologies, religions and people. This is particularly true when we are talking about potentially sensitive issues, as in this case, issues concerning one of the world’s religions.

We are not calling into question freedom of speech, which has been an absolute right in all developed democratic countries for a long time now. We are talking about the need to be sensitive and to show respect for various approaches to life. I think that the international community is becoming increasingly aware of the need to appeal for respect of religion and for the non-use of violence.

Vladimir Putin: Russia is home to more than 15 million Muslims. On behalf of Russian Muslims and the Russian leadership, I want to say that we condemn any provocations that fuel inter-ethnic hatred, no matter what the ideals or pseudo-liberal phraseology used to justify them.

At the same time, we call on the leaders of Muslim organisations and the leaders of Muslim countries that have witnessed violence over recent days as a result of this so-called ‘caricature war’ to bring the situation under control as rapidly as possible, prevent any violence and help establish a peaceful dialogue between the different religions. Only through open and civilised discussion can we find a common platform that will enable us not just to coexist but also to develop together.

We therefore support the initiative set out by the Turkish and Spanish Prime Ministers in their joint statement and we will contribute to its practical implementation.

Question: Mr President, it looks as though the United States has taken most of the initiative of late in the Middle East peace process, while Russia has become somewhat distanced from participation in decisions on this conflict. What steps does Moscow intend taking now, following the Hamas victory in the Palestinian election?

I also have a question for Mr Zapatero. Responding to journalists’ questions before leaving for Madrid, President Putin confirmed his explanations regarding why Russia refuses to recognise Hamas as a terrorist organisation. He noted that the Russian leadership has its own view of the situation in the Middle East and that he would discuss this with you during his visit.

It seems as though you have indeed discussed this matter. To what extent do you share the Russian leadership’s views, in particular, Moscow’s refusal to recognise Hamas as a terrorist organisation?

Jose Luis Rodriguez Zapatero: The international community is very concerned about the future of the Middle East. There have been long years of suffering and difficulties and attempts to reach a peace settlement between Israel and the people of Palestine. This problem has gone through many different situations. We note now that a new situation has arisen following the election.

Practically the entire international community would like to see the process move forward without violence. I think that development should be based on the strategy proposed by the ‘quartet’ of mediators. We need to bolster the role of Moscow and President Putin in order to inject this peace process with new strength. Spain therefore supports Mr Putin’s initiative, keeping in mind here the philosophy and the scheme set out by the ‘quartet’, in order that this peace process, this dialogue, go ahead based on the parameters agreed on by the international community.

Vladimir Putin: I do not think that Russia has moved away of late from its responsibility and its cooperation in settling the conflict in the Middle East. On the contrary, our Foreign Ministry has been working quite actively within the ‘quartet’, on a bilateral basis, and with all the parties involved, with our Israeli partners and with the Palestinians.

As you know, I visited the Middle East not so long ago and I met with the Israeli and Palestinian leadership. At the same time, what I want to say is that it is my deep conviction that burning the bridges, especially in politics, is the easiest road but also the most dead-end option. This is why, after analysing the behaviour of each side engaged in this conflict, we decided that rather than rushing to declare this or that organisation a terrorist organisation, we would try to work with all the organisations taking part in the process of trying to bring peaceful life to this volatile part of the world.

It is for this reason that we did not recognise Hamas as a terrorist organisation. Today we need to recognise that Hamas has come to power in the Palestinian Autonomy through democratic and legitimate elections, and we need to respect the Palestinian people’s choice. At the same time, we also need to look for steps and solutions that would be acceptable for the political forces now at the head of the Palestinian Autonomy, for the entire international community and for Israel.

We are maintaining our contacts with Hamas and we plan soon to invite the leadership of this organisation to Moscow to search precisely for the kind of solutions I referred to.

Question: President Putin, you said that the state of affairs in Europe depends a lot on rational management of energy resources. How did you pass on this message to His Majesty and how would you comment on the considerable dependence on Russia’s energy sector.

Finally, I wanted to also ask about human rights and in particular, about Antonio Valdez Garcia.

Vladimir Putin: If you told me who exactly Antonio Garcia is, I would be very grateful. We have 145 million people in Russia and it is hard enough to know them all even when they are citizens of Russia. If he is a Spanish citizen then it is even harder for me to get my bearings. So, if you could explain what this matter is actually all about I would be grateful.

Regarding energy dependence on Russia, I think that talk of Spain being excessively dependent on Russia for energy supplies is highly exaggerated. Mutual interdependence is on the increase in general in this modern age of globalisation. The question is can we make wise use of the advantages and opportunities that globalisation offers? I think that we are in a position to do so.

If you look at the share of Russian energy on the Spanish market it is very small indeed for now. Our pipeline gas is still not competitive on the Spanish market. This is a pity, a pity above all for you, because if you put in place competitive conditions for our energy resources it would greatly increase your energy stability. We are currently working actively with our partners to organise cooperation under a swap scheme to buy liquefied gas to sell on third countries’ markets, and I think that this is a very interesting and promising project.

We are also working together on cooperation in the nuclear energy sector. We are looking at ways for our Spanish partners to take part in investment in the Russian energy sector, as this is an area in which they show great interest. If we achieve all these goals it will certainly help resolve the quite serious energy problems in Europe and in the world. We will continue to work on these matters with the Prime Minister and we will also discuss them at the meeting with the Spanish business community representatives.

I did have the chance to discuss these questions yesterday with Spanish energy sector representatives at the reception given by His Majesty the King. We will continue this dialogue today.

In conclusion I would like to say that the Russian energy sector has always been one of Europe’s most reliable partners. Even during the most difficult years of economic crisis, downturns and cataclysms in the mid-1990s in Russia, Gazprom never once failed to meet its supply obligations on time with regard to its Western European partners. I would ask you to take note of that fact.

Now, coming back to your other question, if you tell me who Garcia is, I will give you an answer. What is this matter all about?

Question: According to information received from Moscow, he is a Spanish citizen who headed one of the departments at Yukos. He ended up in hospital after it seems he was beaten by the Russian police. My question is: are you aware of this situation and did you discuss it with Mr Zapatero?

Vladimir Putin: No, I did not discuss this matter with Mr Zapatero. I do not even know if he [Garcia] is a Russian citizen or a Spanish citizen. I noted that in your question you said ‘it seems he was beaten by the Russian police’. First we need to establish whether he not he was indeed beaten. All I can promise you for sure is that I will issue the relevant instructions to the Prosecutor’s Office and will ensure that I receive information on what actually happened. If there is even the slightest hint of any criminal act in this case, it will be investigated.

Jose Luis Rodriguez Zapatero: This question has two addressees. The government and the Foreign Ministry are holding talks on this individual’s situation and we have received clarification of the events that took place. There are some questions regarding his citizenship, as Mr Putin has just mentioned. The foreign ministries in both our countries will continue their work on this case.

Question: Next year, 2007, is, if not a symbolic year, then at least an important year for relations between the Russian Federation and the European Union. It is next year that the Partnership and Cooperation Agreement expires. This raises the question: what kind of new agreement do you think should replace it? How should it differ from the old agreement and what main areas would you like to see reflected in the new document?

Vladimir Putin: First of all, you are right — next year does indeed mark the end of our basic agreement with the European Union. I think we have every possibility of reaching a new agreement and can draw up a new document that reflects the present reality. The situation has changed considerably since the time the previous agreement was signed. For a start, the European Union has undergone change in that it has expanded to take in new members. There has also been change in the Russian Federation – we have made considerable progress towards reaching the objectives that were set out in the previous agreement that lies at the foundations of our relations with the European Union.

As you know, high on our agenda today is the construction of the four common spaces in the economy, internal and external security and humanitarian contacts. All of this should help form the foundation of the future documents that will regulate our relations with the European Union. We are in contact with our colleagues and work is underway at expert level. I hope that we will have the new document prepared by the time the previous agreement expires. If we do not manage to have this work completed on time I do not think it will be any great tragedy, but it would be better if we have a signed agreement at the foundation of our relations.

Jose Luis Rodriguez Zapatero: One of the European Union’s main objectives is its relations with a great state like Russia. I think that deepening and renewing the relations between the European Union and Russia requires us to work towards two principal goals. First is to achieve progress because we have here a vast economic area that can grow to the benefit of both partners, the European Union and Russia, in terms of exchanges between people, exchanges in the energy sector. Second, intensification of the ties between Russia and Europe will bring greater stability to the world because it implies common security, because it means we have two major partners working together, partners who have a lot of influence on the international climate, and this can help settle conflicts such as the situation in the Middle East or the Iranian nuclear issue. The stronger the ties between the European Union and Russia, the better it will be for progress and stability in the world. I therefore support Mr Putin in his desire to see a new and deeper cooperation agreement between the European Union and Russia.