Official website of the President of Russia

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President Vladimir Putin: Ladies and Gentlemen, our talks with Ms Angela Merkel, the federal chancellor of Germany, have just ended. It is noteworthy that these talks have taken place during the first weeks of 2007, as this once again confirms our two countries’ mutual aspiration to maintain a high level of mutually enriching dialogue and further develop our multifaceted cooperation.

I would like to stress right from the start that we are ready for the closest cooperation with Germany as it now assumes the presidency of the G8. I can say that here in Sochi we have in a sense handed on the baton from the Russian to the German presidency.

We hope for continuation of the G8’s work and we welcome our German partners’ plans to pay heightened attention to the issues of energy efficiency, non-proliferation of weapons of mass destruction and emerging threats to global and regional stability. The importance of multilateral cooperation in the fight against terrorism is also clear.

The start of Germany’s presidency of the European Union opens up good prospects for cooperation. Our common priorities in this area include forming the four common spaces between Russia and the EU and launching negotiations on a new basic agreement between the two sides.

We are open to constructive work on the energy dialogue with the European Union. Russia, for its part, hopes that our partners will support the principles of equal rights and mutual respect of each other’s interests.

Today’s talks with the Federal Chancellor have confirmed the close positions Russia and Germany share on key issues on the international agenda.

Our ongoing talks will focus on achieving a peace settlement in the Middle East based on the Roadmap that has been recognised by all sides. We support the Federal Chancellor’s efforts to hold a meeting of the quartet of mediators as soon as possible in order to propose a comprehensive solution to bringing lasting peace to the region.

We share a common position on resolving the situation with Iran’s nuclear programme – a solution that must be based, of course, exclusively on political and diplomatic means and that takes into account the corresponding UN Security Council resolution adopted at the end of 2006. We will discuss this issue in more detail during the second part of our talks.

We are ready to continue constructive cooperation in order to help stabilise the situation in Iraq and Afghanistan.

We will discuss the situation in the Balkans, including in the context of today’s elections in Serbia. It is unacceptable in Russia’s view to impose a decision on the status of Kosovo from outside. A long-term solution can be reached only if it is acceptable both in Belgrade and in Pristina.

As far as Russian-German relations are concerned, I want to say, and I hope that my colleague will agree with me, that there are no problem issues today. We have built up a great deal of experience in working out common approaches to the various areas in which we cooperate. Our joint working groups on key areas of our cooperation with Germany play an important part in this respect.

We both agreed that 2006 was a genuinely successful year for relations between our two countries.

Our bilateral trade was up by 30 percent and reached a new symbolic record of $40 billion. The flow of German investment into Russia also increased notably, up more than 1.5 times compared to 2005 and exceeding a figure of $2 billion. Total German investment in Russia now comes to more than $10 billion.

We successfully launched joint projects in the energy and transport sectors, in the automobile industry, the aviation industry, the space sector, and in telecommunications. The main focus in these projects is on advanced technology and new forms of production and science and technology cooperation.

I would particularly like to note our increasing cooperation in the energy sector. Russia and Germany both have an interest in ensuring energy security in Europe and the world. Leading companies from our two countries plan to hold an energy forum this April and I am sure that it will lead to even more effective cooperation and will deepen our energy dialogue.

Along with growth in economic cooperation, we are also expanding our scientific, educational, cultural and youth exchanges and are strengthening ties between the institutions of civil society in our two countries. We have developed regular parliamentary contacts.

I would like to say a few words about our tasks for the future. We discussed them in some detail today. First of all, we confirmed the dates for the next round of Russian-German intergovernmental consultations, which will take place in Wiesbaden in autumn, 2007.

Second, Russia will take part as the main partner country in the CeBIT-2007 international telecommunications systems and computer technology exhibition in Hanover in March. I think that the holding of the Year of Siberia in Germany is an event of great importance. We discussed the possibility of holding this event today. Finally, we plan to give the International Year of the Russian Language our joint attention. I am certain that the activities planned for this event will contribute towards bringing our peoples even closer together.

We also plan to organise other interesting joint activities that take into account the rich and centuries-old historical legacy of the ties between our countries.

In conclusion, I would like to say once again that today’s talks mark an important step towards further strengthening the strategic partnership between Russia and Germany. I would also like to wish Ms Merkel success in resolving the tasks ahead during Germany’s presidency of the G8 and the EU. These are not simple tasks, but I am sure that our colleagues will be more than up to the measure.

Thank you for your attention.

German Chancellor Angela Merkel: Thank you very much. First of all, I would like to thank you for the invitation to come to this impressive place, to Sochi. Second, I would like to thank you for giving us this opportunity right at the start of the year to discuss not only bilateral issues but also issues related Germany’s presidency of the G8 and the European Union.

Regarding relations with the EU and bilateral relations, I can but confirm what the President just said. Visible progress has been made in the areas of trade and cultural projects. We will meet in Wiesbaden this autumn to hold Russian-German consultations. The invitation has already been issued. I am also pleased to say that Mr Putin will attend the conference on security in Munich in February.

Turning now to the EU and Germany’s presidency, we will have the opportunity to hold a summit here in Russia and will travel to the banks of the Volga River. I hope that we will have good talks. We have presented the programme for Germany’s presidency of the EU for the next six months. Energy issues play a central part in this programme. This covers everything related to the EU’s internal structure in this area, but we also discussed, of course, the strategic relations between Russia and the EU in energy matters.

We exchanged views on the fact that there were a number of issues of debate at the start of the year, and I said that communication in this kind of situation should be improved so as to avoid concerns. The President agreed with this view. It is true that Russia, when it was still the Soviet Union, was a very reliable supplier of energy resources for decades, and we would like this to continue.

We discussed the European Union’s wish to see a new Partnership and Cooperation Agreement concluded with Russia, and Russia supports this initiative. The old agreement was concluded in 1994. Today we need a new agreement, one that will set out the closer relations between Russia and the European Union.

As far as starting negotiations is concerned, there are a few issues regarding meat supplies that are creating a big obstacle. We discussed this problem. I think that our agriculture ministers are on the right road. I hope that, for the EU’s part, these negotiations will be able to get underway soon, because we want to discuss areas that were not part of the 1994 agreement, areas such as foreign policy, security and energy issues. We will also be examining mechanisms for organising consultations and working out the procedures for coming together to resolve any problems that may arise.

We also discussed international issues today. One subject of discussion was, of course, the Middle East, and we fully agree that resuming the quartet’s work on the Middle East would be a positive step. We will be meeting soon and must therefore make every effort to ensure that the conflict between Israel and the Palestinian Authority is resolved in accordance with the Roadmap, because resolving this conflict will have a big impact on other conflicts in the region.

Regarding the situation in Iran, we agree that taking the road set out by the UN is the right direction. Concerning the latest resolution, we do believe it is important to show Iran that the door for negotiations remains open. We will discuss the issue of Kosovo in more detail during the dinner ahead. We agree that in this region it is important to ensure a stable development of events, that we need to examine the report presented by Mr Ahtisaari and pursue a path of good and reasonable development.

We also discussed human rights issues, if I can sum it up that way, and noted that it would be good if Russia’s State Duma ratified the Additional Protocol to the European Convention on Human Rights. We spoke about the fact that this is a task for the members of parliament and it is outside our responsibility. On the other hand, the President said, regarding the investigation into the murder of Anna Politkovskaya, that the Russian justice system is working very hard but that there is no news as yet.

Regarding Germany’s presidency of the G8, we have taken the baton from Russia, so to speak. We will continue to develop the subjects that Russia began work on, including energy and climate change. These are issues that will occupy us over the coming years, issues we will cooperate on closely. Of course, we will also be looking at international trade issues such as protecting intellectual property, for example. I think we have close and good cooperation in this area and that we will continue our work together and recall the work done in St Petersburg during this year’s G8 summit in Heiligendamm. The baton has been passed on smoothly.

I would like to thank you very much for this invitation. There was a wonderful sunset this evening that I was able to watch, looking out of the window of the conference room.

Thank you.

Question: You said that you discussed energy matters. Given the events in Ukraine last January and in Belarus this January, how do you assess the prospects in this area, for the next 5–10 years, at least. Second, with Germany now presiding over the EU, can we hope that, given the problems that exist, negotiations on a new agreement between Russia and the EU will begin, and has Brussels finally managed to settle its relations with Poland on this issue?

Angela Merkel: We did indeed discuss our energy sector cooperation and I must make it clear that not only do I accept but I also understand what Russia seeks to establish with its partners, Ukraine and Belarus, that is market prices for the purchase of oil and gas. We, of course, seek reliable relations regarding energy supplies to our countries. I think therefore that it is important that in the future we communicate with each other and look for solutions to the problems that come up. I think we had a good discussion of these matters, and I think that the partnership agreement could contain, at least as far as the EU is concerned, provisions setting out the mechanisms we could use for keeping each other informed in such cases in order to avoid disappointments, misunderstandings and problems.

I think that if we look at the coming 10–15 years, there is a clear situation of strategic dependence, but in the positive sense of the term, and the EU and Russia can both benefit from this situation. We are not far away from each other and we need each other, and this makes it all the more important for us to develop the mechanisms we need to avoid the kinds of rough patches we had at the start of last year and the start of this year.

As far as the partnership agreement is concerned, the energy issue alone makes it clear why we need it. The European Union has no problem with Poland. There is a problem between the EU and Russia on certain trade issues, issues concerning meat in this case, that have not yet been resolved. Intensive work is currently underway to resolve these issues. Commissioner Cipriani was in Moscow and negotiations have been underway for a week. The process is moving ahead step by step. As an optimist, I think we will be able to commence negotiations on a partnership agreement during Germany’s presidency of the EU, and I think that we will perhaps have already made headway by the time of the Russia-EU summit.

Vladimir Putin: We examined both the energy issues and the question of work on a future basic agreement between Russia and the European Union. I want to stress that everything Russia has done over recent years – last year, the year before last, and this year – is aimed at establishing common and transparent rules and conditions for cooperation in Europe and effecting a transition to market-based cooperation principles. If you recall the crisis over supplies to Ukraine, people were constantly trying to accuse us of politicising the energy issue and using some kind of energy weapon in our relations with our partners. Today, no one is talking about using some kind of weapon in relation to other countries. We for our part have always stated that our intention is to introduce clear market principles for relations with all of our partners without exception.

This is in the interests above all of our main consumers in Europe. Our European consumers have an interest above all in there being clear and transparent rules for cooperation with transit countries.

There were no problems in the past when the Soviet Union was still in existence and our oil and gas was transported through Soviet territory, through the former Soviet republics and the territory of Warsaw Pact member states. The situation today is different. We want to cooperate with the transit countries, but I stress that we want to do so on the basis of clear principles of cooperation that apply to all without exception and that are devoid of any political or opportunist considerations. This is why we say a firm ‘yes’ to partnership and cooperation with all, but we say ‘no’ to anyone acting as a parasite. We will build our relations with all of our partners, both the transit countries and the consumers, on an equal, clear and transparent basis. That is the first point I wanted to make.

Second, given the changing geopolitical situation, we will work actively on developing our transport network in order to be able to deliver our resources directly to our main consumers. We are speeding up work on laying the pipeline to the Pacific coast and we are expanding our possibilities for transporting energy resources in the north, including in Russia’s northwest region, in order to lessen our dependence on the transit countries.

Let me say again that we want to build equal relations with all, with the transit countries and with our consumers. Everyone will benefit from it, everyone without exception – Russia, the consumers and the transit states. What happened at the end of last year was simply another step towards establishing market relations with everyone.

Regarding the basic agreement between Russia and the European Union, it is in our interest and we will work actively in this direction. We will look for ways to remove any obstacles in the way of signing this document. I want to stress that we hope our partners will also take our interests into consideration during this process and that they will be taken into account in our joint work. As I understood the Federal Chancellor, the German presidency shares this same position. We will work together to remove all obstacles and reach a positive result.

Question: No results were reached, it seems, at the Lahti summit between Russia and the EU. You rejected the EU’s demand that the Partnership and Cooperation Agreement contain a provision on reliability of energy supplies, the issue that was cause for concern.

My second question concerns Kosovo. The EU is preparing for a crisis situation. Given that you have hinted that you will not support the proposals made by Mr Ahtisaari, the EU could probably have cause to fear a crisis over Kosovo in the coming months.

Vladimir Putin: First, regarding energy, as I said, it is our firm intention to build clear and transparent relations with all of our partners in this sector. In which documents we set out the agreements reached is a matter of taste. We are conducting an energy dialogue with the European Union and we have no intention of breaking it off. It is in our own interest to establish clearly formulated rules in this area and ensure that they are observed because practice shows that failure to observe market principles causes huge losses for Russia, losses totalling billions of dollars every year. No country has been providing the kind of support to other countries that Russia has been providing for the last 15 years. And as the Federal Chancellor noted, we have our own pensioners, teachers and doctors, our own social sector to look after. Why should we subsidise other countries’ economies on such a scale? It is therefore in our interests to establish clear rules and we have every intention of doing so.

Regarding Kosovo, we do not oppose the proposals Mr Ahtisaari is preparing. I said that we believe that these proposals should meet with the acceptance of both Belgrade and Pristina. This is what we support. I think that it is also not in Europe’s interest for one of the sides, Belgrade, for example, to have a solution imposed on it that would be humiliating for the Serbian people. Surely Europe has no interest in such a situation?

We need to be patient and search for acceptable solutions, for they can be found. You know our position. We opposed the bombing of Belgrade. We still think that it was a big mistake. It surely cannot be normal to bomb the centre of Europe on the eve of the twenty-first century? Today we are seeing the results of that mistake. We did not cause this mistake, but we have to work together to find a way out of this situation. I think that a solution can be found if we act carefully and avoid imposing any solution of force on anyone.

Angela Merkel: We did discuss whether or not Russia will ratify the Energy Charter. But I don’t think that in Lahti we were looking at whether or not to include a provision in this area in the Partnership and Cooperation Agreement. We already have a small provision in this regard, and when we begin the negotiations, we will discuss all these issues with each other in the spirit of strategic partnership and reliable supplies, and this is in our mutual interest.

Regarding Serbia, I would like to remind you that democratic elections are taking place in there today. This makes me happy because it is a sign of success after the very difficult road that Serbia has had to follow. We are able to withdraw our troops from Bosnia because events have developed positively there. The situation has also improved in Macedonia. Croatia is now holding negotiations with the European Union. We want to achieve in Kosovo what we have achieved for these people, but we do not want an outcome that would lead to complete instability in Serbia. We do indeed need to act carefully, and this is also in the European Union’s interest. I hope that the democratic forces in Serbia will come out all the stronger from today’s election.

Question: I would like to continue the discussion on Kosovo. I hope that a solution will be found there, but as far as I recall, there is a big difference in approach between Russia and Germany regarding whether this solution could become a universal solution that will be applied also to resolving the frozen conflicts in the post-Soviet area, or whether it will be a unique solution to the Kosovo issue only. Could you please clarify your positions in this regard?

I would also be interested to hear the positions of both leaders on another issue on which Russia and Germany do not disagree, an issue where we see a misunderstanding between Russia and one of the EU members, at least, that is to say, the situation with Estonia regarding the law that will allow the demolition of Russian war memorials. I would be interested to hear Germany’s view on this issue. In Russia, at any rate, this situation is seen as yet another manifestation of neo-Nazism.

Vladimir Putin: You know, I think that the problem in international relations today is that there is increasingly less respect for the basic principles of international law. There is an ever growing desire to resolve this or that issue based on the political considerations and expediency of the moment. This is very dangerous and it is precisely this that leads to small countries not feeling secure. It is also this that fuels the arms race in large countries. We need to understand this and move to strengthen the foundations of international law in our action on the international stage. This also goes for Kosovo. It is only natural that if we find a particular solution for the situation in Kosovo, this solution should become universally applied to similar cases. If we ignore the problems and principles of countries’ territorial integrity and say, ‘well, what’s happened has happened and there’s nothing that can be done about it now’, if the international community does not want to do anything to restore Serbia’s territorial integrity, then other peoples will also have the right to say, ‘well, we will also take this approach then’.

This applies not only to the post-Soviet area, though this is where we see the most similar situation. There, we saw the breakup of Yugoslavia, while here we faced the breakup of the Soviet Union. It’s the same thing and there is no difference, but this situation can also apply to other countries too, even to some European countries. We know that there are problems with separatism in some European countries. These problems do exist. It is not in anybody’s interests to undermine the foundations of international stability, and I think that if we do follow this road we could end up facing serious consequences. The temptation is great, just like after the end of World War II when three or four people sat down, pencils in hand, and divided up the world and all of Europe.

Now, filled with a sense of their infallibility and strength, the victors in the Cold War want to divide everything up anew. The temptation is great but the results are hard to predict. We propose thinking about this together. We are ready to work together.

Now, what was your second question, yes, Estonia… Our State Duma deputies representing a wide range of factions in the Duma, have already spoken out quite clearly on this issue, and I fully agree with them. I think that this is an attempt by some Estonian politicians to get attention, a wish on their part to take on the role of frontline state, exacerbate the situation and use this as a basis for getting some kind of economic or political benefits. This is a very dangerous and short-sighted step.

Angela Merkel: Regarding the issue of Kosovo, we are in a better situation than after World War II in that we now have the United Nations, and Mr Ahtisaari has been working in Kosovo under UN mandate. The task he has been entrusted with by the UN and the OSCE is to prepare a report.

We proposed that before he presents his report, he first speak with Kosovo, and also with Serbia, of course.

He has spoken with President Tadic and will then hold consultations on this report. The UN Security Council members will then express their opinions on the report and only then will matters progress further. In other words, this is all a very transparent procedure. I think that the task for today’s world is to ensure that the UN – and this is precisely why we believe it needs to be reformed – should be the organisation that has the legitimacy to resolve conflicts of this kind. These are conflicts for which, as I see it, there must be universal principles on the one hand, otherwise the UN could not exist, but on the other hand, these conflicts are all very different in nature. We saw the example of Serbia and Montenegro. In that case, Serbia accepted the outcome of the referendum that took place.

On behalf of the European Union, I would like to say that we understand that the western Balkan countries, as we discussed intensively at the EU’s December meeting, should have the possibility of a future in Europe. I can also remind you of the high representative in Bosnia and Herzegovina, where the UN has played a very positive role in helping to organise life between the various ethnic groups. Look also at the problem in Iraq. The UN needs to be strengthened.

Vladimir Putin: The UN should indeed play a defining role, and I recall in this respect resolution 1244.

Angela Merkel: There was also the question about Estonia. I can say that we make every effort to ensure that all of the EU member countries maintain reasonable relations with Russia. Wherever conflicts have arisen, such as between Russia and the Baltic states, for example, the EU and Germany have always done everything they can to resolve these conflicts, and we will continue to do so in this respect.

Question: Ms Federal Chancellor, were you able to persuade the Russian President to influence Syria in order to resolve the situation in the Middle East?

And a question for you, Mr President: you have met a couple of times now with the Federal Chancellor. Is there any difference with the preceding federal chancellor, and what nature does it take?

Angela Merkel: We discussed the situation in the Middle East in general, but we have not yet discussed specific issues. We will do so at dinner tonight. My position is that Russia and the European Union and Germany all have an interest in getting the maximum number of partners involved in finding a constructive solution. This concerns the Israeli-Palestinian conflict and the situation with Iran. It also concerns Lebanon’s sovereignty, and I know from the Russian President that we both want to see sovereign development in Lebanon. [Lebanese] Prime Minister Siniora visited Moscow and there are various ways in which we could get Syria involved in a solution. Personally, I can say that our foreign minister was in Syria recently, but that we have not seen progress as yet, unfortunately. We will continue to support Syria’s involvement, however, because we need every country in the region that is taking an active part in resolving this conflict.

Vladimir Putin: We are working actively with all the countries involved in the conflict in the Middle East. I have met with the Syrian President and with Prime Minister Siniora. The Federal Chancellor has mentioned this. I must say that Russia and Germany hold close positions on these issues. I think that we are working constructively together and are combining our efforts in order to resolve one of the most complex problems in international politics.

I have nothing to add here. There are a great many details, but our positions are close. There is no need to convince us of anything. We agree overall on what is happening and we agree on the possible solutions to the problem, including with respect to our approach regarding the use of force. We consider the use of force unacceptable in this region.

The use of force is already sufficiently widespread in various conflict regions in the world and the results are opposite to those desired. We need to look for other solutions, solutions that at first glance are more complex, but that are also far more effective in my view.

As for the difference between the current chancellor and her predecessor, I imagine that the German public knows these differences better than I do, but I have already answered this question on a number of occasions.

First, the Federal Chancellor and I have established very good personal relations, and I say this without any exaggeration. Second, it is true that I also had friendly relations with the previous chancellor and this remains the case today. As I have said in the past, I also had good relations with Mr Kohl too, relations that have lasted all these years.

Regarding the business side of things, I can recall only one example that shows that personal relations in any case always help to find solutions to problems. But we keep to our principles and are consistent in defending our positions.

I can give you an example of when the Federal Chancellor was still in the opposition, but our position on a serious matter in our bilateral economic relations happened to coincide with that of the opposition, and we were unsuccessful in reaching an agreement on this issue with the chancellor at the time and his government.

The issue in question was that of how to pay off the former Soviet debt to Germany ahead of schedule. We proposed a direct payment. The opposition’s position at this time was that this was the best way to settle the debt issue, but the government of the time did not agree with us and issued securities for our debt. Although there was no great loss, nonetheless, in our opinion it turned out to be not as effective as what we were proposing. So, I would not overplay the importance of personal relations. They have never been a hindrance, and indeed, they have helped by creating the necessary atmosphere. We have just such an atmosphere today.