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President Vladimir Putin: Good afternoon, Ladies and Gentlemen,

Our discussion with Hungarian Prime Minister Ferenc Gyurcsany has just ended. This was our third meeting and, as has now become a tradition, it was friendly in spirit and businesslike and concrete in substance. We noted that relations between our two countries are going through a growth period.

In this context, I would like to note that Russia values the Hungarian leadership’s balanced and pragmatic approach. We see this pragmatism as lying in the fact that Hungary is a member of NATO and the European Union, but at the same time it seeks opportunities for developing cooperation corresponding to its national interests with other countries, including with our country, and in so doing it makes a constructive contribution to developing Russia’s partnership relations with the European Union and with NATO.

Although today’s meeting was relatively brief, we managed to discuss practically the whole spectrum of our relations. We gave particular attention to the implementation of the agreements reached during my visit to Budapest on February 28-March 1, this year.

We noted that our bilateral trade is showing a steady increase. Last year it reached a figure of $6 billion – an absolute record for trade between our two countries. It came to $3.6 billion over the first half of this year, and this represents an increase of 40 percent. Hungarian exports to Russia are increasing particularly fast and came to 74 percent over the first half of this year, which shows how open the Russian market is to goods from Hungary.

But we have no intention of resting on our laurels and this is why the focus of our discussions today was on major joint projects that will expand our trade relations, deepen our economic cooperation and diversify our bilateral trade structure.

One of the areas where we plan to develop our cooperation is the fuel and energy sector, and we discussed in detail the possibilities for expanding gas transport capacity and developing underground gas reservoirs. We have projects in the electricity sector too. We also note Hungarian company MOL’s increasing activity in the Russian energy sector.

We discussed our mutual interest in developing transport infrastructure. Here, we could work on creating major logistics centres involving the participation not just of Russia and Hungary but also of other countries such as Ukraine, for example, and the European Union. We also looked at cooperation in advanced technology sectors, including in the area of nanotechnology.

Hungary is showing interest and could take part in carrying out the priority national projects in Russia, above all in the areas of agriculture and housing construction. This work has already gained a start with the agreements reached today and the agreement just signed today on cooperation in the agriculture sector and foodstuffs industry. This agreement will soon translate into concrete substance in the form of contracts to build a large, modern sugar plant and large pig-breeding centres in Russia.

An Intergovernmental Commission experts’ meeting will take place in Moscow on October 13, and will develop all of these agreements and make decisions on the concrete steps to take to implement them. The level of political cooperation we have today enables us to take a pragmatic approach to developing economic ties, and our economic relations have excellent prospects indeed.

Thank you.

Hungarian Prime Minister Ferenc Gyurcsany: Mr President, Ladies and Gentlemen,

I am grateful above all for the fact that the policy of developing our bilateral cooperation that we have pursued over recent years now enables us to follow a policy of decisions. The President called it a pragmatic policy. It is only natural that Russia and Hungary, and Russia and the European Union, do not always share exactly the same views on the issues on the international agenda. Indeed, it would be unnatural if this were the case. But we can respect each other’s cultures and traditions and share a common desire to modernise our countries and work together to achieve positive results in the region where our countries are located.

Relations between Russia and Hungary are distinguished today by more mature political cooperation that is strengthened by our growing economic cooperation and by the open and sincere contacts between our peoples. I don’t know if you have this expression in Russian, but Mr Putin and I understand each other without even having to finish our words.

Regarding our agenda in practical terms, energy policy is something more than simply cooperation in a particular sector of the economy. It is a global political challenge. What we need is not only a common European energy policy but also open and friendly energy cooperation between Europe and Russia. We are interdependent in the long term. The solution here is to interlink our mutual interests and mutual projects. I think that Russia often provides excellent examples of how we can build these relations on the basis of common interests.

Following the political agreements of principle reached in Budapest, we have signed a number of documents aimed at making Hungary one of the key hubs in an expanding system of Russian energy supplies to Europe.

I remind you that over the last months, an agreement was signed between MOL and Gazprom on carrying out feasibility studies for gas pipelines and gas storage reservoirs.

In the area of railway transport, we will work together to develop the Zakhonsky-Chop hub has a key part of the trans-continental railway system that is now forming to link Russia and Europe. In the interests of this project, a few weeks ago, the Hungarian Government established a special economic cooperative to develop this region.

But today’s champions are the agriculture ministers. The agreement that they have drafted in record time lays out a completely new framework for developing our cooperation in specific areas. It opens up new opportunities for tens of thousands of economic cooperatives and private agricultural producers. This will give Hungary’s foodstuffs industry new opportunities for expansion. It will also give our country’s intellectual potential the chance to show here in Russia and in other countries just what the Hungarian genius in the agriculture technology sector can achieve.

This was a working meeting and we did some good work. I am thankful to the President for this.

Question For Ferenc Gyurcsany (IZVESTIIA): In due time Hungary decided to adopt a policy of pragmatic cooperation with Russia. How difficult was it to make such a decision and what results are you aware of?

Ferenc Gyurcsany: There are no friendly relations or marriages in which there are no difficult moments, disagreements or even arguments. This also applies to international relations. The issue is always the following: do these friends or partners want to preserve their friendship or partnership? And do our national leaders want to go forward or do they want to go backwards? … This does not mean that we have forgotten our past or all of our history. But it does mean that we attach a great deal more significance to our future, to constructing our future-oriented relations, than we do to always dwelling on our past grievances. But to do so it is sometimes necessary to struggle at home. For this we require partners and Mr Putin was and remains Hungary’s partner in this respect. And I will never forget when in February 2006 he approached the monument to the victims of 1956 with a bouquet of flowers and then kneeled to lay flowers on the monument. I know that a person requires courage and force to accept such a gesture. Or the fact that the Sarospatak library was returned to Hungary because Mr Putin had the courage to say that these are Hungarian books and must be returned. In a word, if Mr Putin and Russia are interested in Russian-Hungarian relations then Hungary should make a similar contribution towards the development of these relations.

Question For Vladimir Putin (IZVESTIIA): Cooperation between Russia and Hungary is developing, albeit with certain difficulties. What do you think some of our colleagues and new members of the EU could do to attain similar levels of cooperation with Russia?

Vladimir Putin: It is true that relations between the Russian Federation and Hungary are developing successfully both in the political and economic spheres. We are trying to develop our relations with our other partners in eastern and central Europe along the same lines. Mr Prime Minister and I just spoke about this today. We are not constructing Hungarian-Russian relations against anyone, rather to accomplish our national tasks. First and foremost these consist in economic tasks and, of course, tasks in the political, educational and cultural spheres.

What is necessary for relations between Russia and other countries of the region to develop in the same way? Probably we still need time to forget the old grievances and old problems that Mr Prime Minister mentioned. Time so that none of us – neither in Russia nor in our partner countries – have the desire to use historical issues to resolve internal political problems. And finally, we need time so that these states which are involved in their own military, political and economic unions feel confident that they have the possibility to consistently defend their national interests. It seems to me that developing relations between Russia and these countries is in these countries’ interests. It is also in the interests of the Russian Federation.

Question From The Hungarian Telegraph Agency: This is a question for both heads of state. How much further were we able to proceed in implementing or fulfilling the agreements that were reached on this issue in Budapest? What is our Russian and Hungarian partners’ stance with respect to cooperation in the energy sector?

And a separate question for Mr Ferenc Gyorcsany. Does the progress that Hungary and Russia have achieved in terms of energy cooperation not disturb Hungary’s relations within the EU?

Ferenc Gyurcsany: With regards to developing and implementing the agreements reached in Budapest, we were able to synchronize our watches and confirm that these agreements are being implemented, that these agreements do not bother anyone, and that both governments remain in favour of this cooperation. And along with cooperation in gas distribution and transport we are now looking to expand our cooperation into other parts of the energy sector, especially to electricity. And we are looking for the possibility to use our energy producing and energy transferring capacities more effectively, in both of our countries’ interests. With regards to Hungarian-EU relations, the agreements and contracts that Russia and Hungary have made are not in opposition to these relations and, moreover, they help the EU defend its own interests because they strengthen the reliability and the stability of the energy supply in the EU at large. And for that reason this process is not only in Hungarian interests, it is in the EU’s interests as well.

Vladimir Putin: I would like to start with what Mr Prime Minister just finished with. Within the EU everybody is talking about diversifying deliveries of Russian energy supplies and energy resources in general. And if the projects we are talking about and that we discussed today are implemented, then Hungary’s contribution towards resolving general European energy problems will be very significant; Hungary will take on an absolutely new role in European energy policy. What kinds of energy did we talk about? Oil, gas, electricity and those aspects of nuclear energy that Hungary deals with.

With regards to oil, when I visited Hungary at the beginning of 2006 the Hungarian government had certain concerns about the volumes of oil to be delivered on the Hungarian market. This problem has been solved.

With regards to gas, the first is issue is obviously how to make sure that the demands of Hungarian businesses and households receive the supply they need. Gazprom guarantees the necessary volume of deliveries for Hungarian consumers. We are satisfied with how relations between Russian energy companies and their Hungarian partners are developing. This process has many dimensions, including a European dimension. I am also referring to cooperation on the Hungarian market with our German partners, and in this case with the company E.ON. In part this goes back to your first question about cooperation with the EU. We have made substantial steps towards resolving the issue of major gas stocks on Hungarian territory.

Today we have every basis to believe that these projects will be implemented. Implementing projects involving major gas stocks will not only stabilize deliveries to Hungary and Hungary’s own economy, but will also create opportunities for consumption in other EU countries.

And, finally, Hungarian and Russian partners are studying the possibility of cooperating in the construction of new gas transport systems. This work is continuing. We are discussing – today we paid significant attention to this – the possibility of having Russian public and private companies participate in creating additional energy capacities on Hungarian territory and in Europe’s electricity systems.

So it is therefore possible to ascertain that we are moving ahead in almost all these fields.

Thank you for your attention.