Official website of the President of Russia

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Angela Merkel: Ladies and Gentlemen,

Following the successful signature of cooperation agreements that are a sign of our very intensive relations, we now begin this press conference.

We have just had our first discussion with each other and we will continue this discussion this evening after visiting the Petersburg Dialogue Forum.

During our dinner this evening we will focus particularly on international issues and will make them the subject of intense discussion. Just now we have taken a close look at the whole range of our bilateral relations and, naturally, have also given time to the reason for which we are here in Dresden. We will be visiting the Petersburg Dialogue Forum. I think that this forum is a very important sign of the broad-based cooperation between our countries that encompasses not only close political cooperation but also science and research issues and cooperation between civil society in Germany and Russia. I am also very pleased that following our visit to the Petersburg Dialogue Forum, we will be meeting with young people from both countries. We need to deepen and develop our relations, especially relations between people, above all, between the young people in our countries. Of course, this has also played an important part in the work of the Petersburg Dialogue Forum.

We spoke about civil society, about the fact that I was shocked by the murder of the journalist Anna Politkovskaya, and about the fact that we consider freedom of the press to be an integral part of democratic development. The Russian President stressed once again that everything would be done to investigate this murder. I think that this is very important and that this is a necessary sign to make it clear that the freedom of those who write and report is a very important attribute for a country developing along democratic lines.

We also discussed economic cooperation and a number of bilateral contacts between our countries. Germany will take over the presidency of the G8 from Russia, and we agreed that the priority subjects under the Russian presidency, education, the fight against infectious diseases and energy policy, for example, would be pursued further under the German presidency. This will ensure a high level of continuation in the G8 presidency.

Germany will be presiding over the European Union in the first half of 2007, and a summit between Russia and the EU will be organised during this time. This will be a dialogue between Russia and the EU. We will then travel to Russia, where we have planned a meeting next May, and we are very pleased at the prospect of this meeting. Of course, German-Russian intergovernmental consultations will also take place, in the second half of 2007. We think that these consultations will probably take place in Wiesbaden.

As you can see, we are meeting all the time, and I haven’t even mentioned yet that President Putin will come to Finland during the EU meeting next week and that the EU and Russia are carrying out very close cooperation in the area of bilateral relations.

We discussed cooperation between civil society in our two countries. I can also tell you that we have very close economic ties, ties which are continuing to grow. Germany is Russia’s biggest trading partner, or practically the biggest, and we of course talked about expanding these relations in the future.

We will establish a strategic working group to work in the aeronautics area. We have very close cooperation in the area of space exploration, and we wish to continue this cooperation.

Furthermore, over the coming years we will develop our cooperation in the areas of science and education, and our ties in these areas will undoubtedly grow stronger.

I think it is important and natural that we exchange views on international issues. Several weeks ago, we had an exchange of views together with the French President when we met in Paris. We are all equally shocked by the nuclear test carried out by North Korea and we all condemn this test. The international community must take a united stand in this regard, just as with the Iranian nuclear issue. In this area we have very intensive cooperation with the Russian President.

I am very pleased that we have been able to meet here in Dresden. Later we will see the unveiling of the monument to Dostoyevsky. Here, beneath the Green Domes, we can see just how close the ties were between Russia and Germany in past centuries. We can see it, for example, in the cup that was given to Emperor Augustus the Strong, or in the fact that Dostoyevsky wrote one of his most important works here. Today then, we are witnessing the continuation of this centuries-old cooperation between Russia and Germany.

Thank you for your attention.

Vladimir Putin: Ladies and Gentlemen,

First of all, I would like to thank the Federal Chancellor for the invitation. This is our fifth meeting this year. The intensity of these contacts at the highest level is easy to explain, given the increasing cooperation between our countries.

We discussed the successful implementation of our previous agreements during our meeting today, including the agreements reached at the intergovernmental consultations in Tomsk in Siberia. Work is going ahead confidently on energy, transport, aviation industry, automobile industry and infrastructure projects.

I particularly note the increasing cooperation between Russian and German companies in the energy sector. Judging by the whole situation, this cooperation could expand much further and see Germany develop from a final consumer of Russian oil and gas into a major centre for distributing these products in Europe. This is our serious and significant contribution to ensuring Europe’s energy security.

Today we signed a number of documents on cultural and humanitarian cooperation and on credit and finance relations. An intergovernmental agreement on diplomatic property issues will be signed tomorrow in Berlin. Under this agreement, Russia will open a general consulate in Frankfurt-on-Main and a new general consulate building in Munich.

I would like to make particular note of the fact that the remainder of the Russian Federation’s foreign debt to Germany, or rather, the former Soviet Union’s debt, was paid off ahead of schedule in August this year. We are sending 1.125 billion euros to Berlin. This is eloquent proof that our economy is developing well and that Russia is a reliable partner for our main counteragents in Europe.

I would like to say a few words about Russia’s and Germany’s foreign policy positions. The Federal Chancellor just mentioned some of the most urgent issues on the international agenda. I can say that our views on the majority of these issues are very close. This is very important in the context of Germany’s upcoming presidency in the G8 and the European Union.

I am sure that the handover of the G8 presidency from Russia to Germany will be successful and we hope not only for continuation but also for fruitful cooperation on the broad spectrum of issues on the G8’s agenda, and especially on the areas Russia identified as priorities – energy security, education and the fight against infectious diseases.

The Federal Chancellor and I also discussed the issue of strategic relations between Russia and the European Union. We agreed to work closely on furthering our progress in this area, with the main focus being on implementing the ‘roadmap’ and establishing the four ‘common spaces’. We want to take a most constructive and active part in drawing up a new strategy for relations between Russia and the EU.

Of course we also discussed problems in the Balkans, the Middle East, Afghanistan and, of course, the Iranian nuclear issue and the latest developments on the Korean Peninsula, the North Korean nuclear test, and we will discuss these issues in more detail this evening.

Visits to Germany always involve a very busy schedule. After this press conference, as the Federal Chancellor said, we will be taking part in the work of the Russian-German Petersburg Dialogue Forum.

Incidentally, the fact that the forum was today awarded the prestigious European Culture Prize in the ‘Politics’ category is deserved recognition of its considerable contribution to developing ties between civil society in our two countries.

This evening we will be meeting with the participants in the Russian-German Youth Forum. It is a priority both for the Federal Chancellor and for me to intensify and diversify youth exchanges between our countries. In this respect, I want to note that we have already adopted the relevant intergovernmental agreement and set up national coordinating bureaus in Moscow and Hamburg. We have approved the organisational principles and made sure the funding is available for these cooperation plans. Today we can speak of a big step forward in this very important area of bilateral cooperation.

Tomorrow in Munich I have meetings planned with Bavarian Prime Minister Edmund Stoiber and with representatives of business and scientific circles. It is logical that the main theme of these meetings will be strengthening our trade and economic ties, including at inter-regional level.

Of course, I have not mentioned all the subjects discussed during these talks. I will try to give them more attention this evening. We still have plenty of time ahead for our work together.

In conclusion, I would like to congratulate all the residents of Dresden on the 800th anniversary of this wonderful and beautiful city. This is a city where you always feel friendliness and openness. The heartfelt hospitality we have received has undoubtedly added warmth to the friendly atmosphere that always characterises our summit meetings with the German leadership.

Thank you for your attention.

Question: Ms Federal Chancellor, I would like to come back to the murder of Anna Politkovskaya. Does the federal government share our view that this was a politically motivated murder and that it signals a new stage in events concerning freedom of the press? Is this a new dimension? We have the impression that Mr Putin shares your concern. Has anyone raised the idea of an independent investigation into this murder?

Angela Merkel: I already said that this murder came as a great shock to us all and that it must be investigated because it is quite symbolic with regards to freedom of the press. The President promised me that there would be an investigation, and so I assume that every effort will be made to investigate this murder, because it also concerns, of course, the value placed on freedom of the press in Russia. I have learned about this now and I think that everything will be done to ensure that this dreadful murder is investigated.

Vladimir Putin: I would like to say a few words on this subject. First of all, I would like to say that no matter who committed this crime and no matter what the motives behind it, it was a horribly cruel crime and it cannot go unpunished. There could have been a number of different motives. This journalist was indeed a fierce critic of the current authorities in Russia. But, as the experts know, and as journalists should realise, I think, her impact on Russian political life was only very slight. She was well known in the media community, in human rights circles and in the West, but her influence on political life within Russia was very minimal. The murder of someone like her, the brutal murder of a woman and mother, was in itself an act directed against our country and against the Russian authorities. This murder deals a far greater blow to the authorities in Russia, and in Chechnya, to which she devoted much of her recent professional work, than did any of her publications. This is very clear to everyone in Russia. But, as I said, no matter what the motives behind the perpetrators’ actions, they are criminals and they must be identified, caught and punished. We will do everything necessary to ensure that this is done.

Question: You said you discussed in detail the issues of energy security and energy cooperation, issues very much at the top of the agenda at the moment. Is it possible to say that Germany is Russia’s number one partner in Europe in the area of energy security? That is a question for both leaders.

Mr Putin, could you please comment on Gazprom’s decision to develop the Shtokman Deposit on its own?

I would also like to hear both leaders’ views on the North European Gas Pipeline because there is renewed criticism now for the project and environmentalists are making objections. Is there the possibility that this project might be closed down, or will it go ahead, and is this the final decision?

Vladimir Putin: Regarding who is our main partner and who is secondary in this area, what I would say is that Germany is the main consumer of our energy resources and this fact alone puts us in a certain position with regard to each other in energy cooperation. If you take natural gas, we currently deliver around 40 billion cubic metres to Germany which, as I said, is our biggest final consumer. If we carry out the project you mentioned just now, part of the Shtokman Deposit’s enormous gas reserves – and it has total reserves of 3.7 trillion and perhaps even 4 trillion cubic metres that can be developed over at least 50–60 years – will be sent to Europe, above all to Germany, as the Federal Chancellor requested during one of our first meetings in Moscow. This would mean that in addition to the 40 billion cubic metres it currently receives, Germany would receive around 50 billion – 55 billion cubic metres of gas a year throughout this entire long period, enabling it to be not just a consumer but to become a major centre for distributing Russian gas in Europe. In this sense, this project would change Germany’s energy profile and give it a greater role in European energy affairs. We have chosen this course deliberately, based on the fact that Germany is our biggest energy resource consumer.

Of course we are paying very close attention to the implementation of the North European Gas Pipeline project because if it does not go ahead, we will be unable to realise these plans. But we, and I am sure that this goes for the German economy too, have an interest in carrying out these plans. We do not intend to pursue our goals at the cost of the environment, however. We will cooperate with environmental organisations, carry out very stringent studies and comply with all their demands in order to ensure that we meet all the environmental standards.

Angela Merkel: My position is that the North European Gas Pipeline project will be carried out and that this work is already going ahead well now. As I see it, we need to consistently make it clear that this project is not directed against anyone. If the project arouses criticism, we need to provide explanations to make it clear that we are not acting against anyone. Our plans are absolutely transparent.

Concerning the supply volumes, I can only point to what the Russian President has just said. Our position in Germany is that this project will become reality.

Question: My question concerns economic matters. Did you discuss Russia’s wish to participate in specific German companies? Gazprom, for example, want to participate in EADS. To what extent are you, Mr Putin, facing obstacles in investing in Europe, and are you, Ms Federal Chancellor, not a little frightened of Russian investment in Europe?

And a question for Mr Putin: do you feel at home here in Dresden? What memories do you have of this city?

Angela Merkel: As far as my feelings go, I can say that Germany is a confident country with a strong economy and we are always open to cooperation with our partners. This is part of what the market economy is all about. This is also in keeping with the spirit and idea of the European internal market. This is a free, open and liberal economy. Of course, this kind of cooperation should be based on clear and reliable contracts that play a very important part once we go beyond our borders.

I can also say that I understand the interests of Russian companies seeking to create a situation in which both sides benefit. I think that the kind of cooperation Russian companies have with Ruhrgas and BASF are very successful examples of cooperation. They are important in order for us to be able to work and cooperate based on the same set of principles, and this is why we often talk about the Energy Charter, which we consider an important document that will ensure the necessary stability. This has been the subject of a lot of discussion between Russia and the EU, but as far as the principle is concerned, there is no reason at all to fence ourselves off from Russia. I understand very well that Russia and Russian companies want to make a name for themselves here in Europe. If this were not the case, all our declarations about a free economy would be no more than empty words. Companies draw up independent agreements amongst themselves and we are present only for the signature of these agreements, but I can say that the German economy and German companies are acting in complete independence.

Vladimir Putin: Regarding our investment activity, either I heard wrong or you made a mistake, but Gazprom has never had any plans to buy EADS. Its business is in a completely different area. One of our banks, however, did indeed acquire a five-percent stake in this company. As I said during the meeting in Compiegne in France, we have absolutely no hostile takeover plans. This is a very sensitive business. Our bank’s action in acquiring this five-percent stake was the result solely of its work on the financial markets and securities markets. The company’s share price fell and our bank seized the opportunity and bought this stake in the hope of later being able to make a profit. We want to cooperate with our European partners and we want to diversify our relations. This, by the way, would most certainly benefit both the Russian and European economies in every respect.

The aerospace sector is one of our priorities and one of the most promising sectors for cooperation. Areas for cooperation in this sector today include the creation of new piloted apparatus, robotic technology and other important, interesting and mutually complementary projects, all of which would require hundreds of millions of dollars and euros.

As for EADS, we are indeed willing to undertake substantial work with this company, but we agreed with the Chancellor and President Chirac that an expert group would first work out in what areas and to what extent Russian cooperation is desirable for our European partners. We, for our part, will then have to say whether this approach satisfies us. If we succeed in finding solutions at the expert level, solutions that the experts think will benefit the aerospace industry’s development in Europe and in Russia, then we would make a decision on transferring our five-percent stake, or perhaps a larger stake, to the aerospace corporation we are developing. If this does not happen, the bank will simply work with these shares on the securities market, and that is all there is to it.

Personally, I think that in order to make the aviation industry in Europe and Russia more competitive, we need to consider joining forces. There are areas in which we can work together. In Russia’s case, this would not be wide-fuselage aircraft, for example, but transport aircraft, special-purpose aircraft, helicopters and so on. The experts have to decide where their interests lie. There are advantages and disadvantages on both sides. The greater our participation, the less freedom we would have on world markets, and we have to take this into account too. We will need to study all the aspects of this issue and only then make a decision.

As for Dresden, I do indeed like this city very much. I lived here for almost five years and one of my children was born here. When I first arrived in Dresden I began to speak more or less decent German, so that my friends and colleagues could understand me. Now I am here in the Green Dome and I have seen that many of the exhibits are the same as I remember from the past and have simply been moved from the old building. These are factors that cannot but have a positive impact on my meetings with the Federal Chancellor and I am very grateful to her for organising this meeting here.

Question: Mr President, Ms Chancellor, how do you assess the current situation in the Middle East and Israel’s relations with the neighbouring Arab countries? How great is the likelihood of a resumption of hostilities? Mr Putin, a question to you: why has Russia not made its engineering battalion part of the UN peacekeeping contingent, and what is behind the unusual decision of having units from Chechnya take care of its security?

Vladimir Putin: We think that this form of participation is the best option for Russia. We think it makes a considerable contribution to the international community’s efforts to rebuild Lebanon. We know the reaction of some political forces to what the international community is doing and we are aware of the criticism of the United Nations. As a member of the UN Security Council, Russia shares full responsibility for everything the UN is doing and I want to assure you that the UN is doing everything it can to resolve the Middle East problem in a fair and optimum way for the people living in that part of the world. Russia decided to act independently. We hope that this form of participation in Lebanon’s reconstruction will receive the support of all the political groups in Lebanon. This is very important for us.

As for the units that will be ensuring the construction battalion’s security, they are indeed two Russian Armed Forces units from Chechnya, ‘Vostok’ and ‘Zapad’. We made this decision because they are mostly Muslims, for a start, and so it will be easier for them to make contact with the local population. Second, they are people who have gone through very difficult conditions, and they will provide reliable protection for our servicemen in Lebanon.

Angela Merkel: As far as Germany’s participation goes, it is part of the UN mission, UNIFIL. We think that this UN mission is a good guarantee that no further military force will be used in this region, and we think that the mission will be able to ensure that the peace holds. But this can be ensured in the long term only when the Middle East peace process once again picks up and we manage to get decisions from the two states – the Palestinian National Authority and Israel. At the same time, the issues between Israel and Lebanon also need to be settled. If they are not on the agenda and resolved by political means, the UN mission will not succeed, that is, it will not succeed if there is no political process conducted in parallel. We see this UN mission as giving us the chance to gain time. We have a small window of time and we must be sure not to let it slip because there are still certain risks. We do not want these dangers to come to the surface. We hope to see a political process go ahead and we would like to see the ‘Quartet’ play an important part in settling the Israeli-Palestinian conflict. Germany has its part to play in this and Russia also has its part to play. When Germany holds the EU presidency, we will make a consistent effort to make progress on this issue together with our partners in the Quartet.

Question: Mr Putin, you did not comment on Gazprom’s decision not to work together with foreign partners in developing the Shtokman Deposit.

Vladimir Putin: Gazprom analysed the offers made by foreign partners, but the thing to remember is that our company was interested not in raising financial resources but in an exchange of assets. None of the bids made by foreign companies offered a volume of assets that would be commensurate to their participation in developing the Shtokman Deposit. As I said before, this is a unique deposit in world terms, with reserves of almost 4 trillion cubic metres. Gazprom has therefore decided to develop the deposit independently. It will be the sole resource user and owner. But it does not rule out bringing in foreign companies to take part in development or in liquefying gas or developing markets in third countries.