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President of Russia Dmitry Medvedev: Ladies and gentlemen,

I want to start by thanking President Sarkozy and the entire French delegation for taking part in the St Petersburg forum. This was very useful and interesting.

I remind you that this year we are not only taking part in this forum together, which is in itself important, but are also carrying out a project unprecedented in our countries’ history – the Year of Russia in France, and the Year of France in Russia. Our intensive economic and political contacts are part of these exchange years, of course. We have already accomplished much and I hope this will continue.

We have just signed important agreements covering the whole spectrum of our cooperation and confirming the strategic character of our relations.

I will not go back over all of this now, but will say only that this is clearly a step forward. We will carry out big projects together in the energy sector, in machine-building, space cooperation, and various other areas.

The President and I have just held very substantial talks. We discussed our bilateral relations, continuing the dialogue taking place between our business communities.

We discussed European security and the global situation, and we looked at what steps we can take next within the G8 and G20. I think we have built up a very productive dialogue of late. We hear each other clearly and are coordinating our decisions in a broad range of areas. This is the guarantee that many important decisions on security and the economy are settled rapidly within various groups and organisations – in the G20 and the G8. I think that our discussions were very useful indeed. 

I think in general that our work over this last period reflects in full the partnership between our countries, and I am very happy to see us working in this way.

We discuss all issues openly. There are some issues that we need to examine in more depth, and there are some issues on which our views do not entirely coincide, but the main thing is the atmosphere of trust and understanding that is inherent in our personal relations. This is important for the future. 

But no future is possible without the past, and so, concluding these opening remarks, I want to say that in what could be seen as a symbol of the Year of Russia in France and the Year of France in Russia perhaps, and as a symbol of our good relations, I am presenting Nicolas Sarkozy, and thus the French Republic, with a very interesting document – a certificate signed by Emperor Napoleon and conferring a title of nobility. We found and acquired this document. This was done through private funds. And now we present this document to our French partners.

President of France Nicolas Sarkozy: Ladies and gentlemen,

I have had the opportunity now of presenting France’s position at the forum. I consider it a great honour to have been invited to take part in the St Petersburg forum, which has become an international gathering not to be missed. 

President Medvedev and I examined various issues that will be on the agenda at the G8 and G20 summits, where we are both heading next week. We share the same desire to get things moving forward. I have said already just how much France appreciates Russia’s position, in particular on the question of sanctions against Iran, on the question of ministers and corporate executives. You could say that our countries have built up excellent economic relations, unprecedented in level, and impressive too in terms of diversification of our cooperation, which has now gone beyond the traditional strategic sectors and is expanding into an ever bigger range of economic activity.

Seldom in our history have our two countries had such ambitious plans and such cloudless and trusting relations.

Question: Good afternoon, I have a question for both presidents.

You both spoke at the forum about the need to expand the number of reserve currencies, and you said that you have agreed the positions you will take at the G20 and G8. 

Have you agreed your positions regarding the actual composition of a list of potential new reserve currencies? What are Mr Sarkozy’s thoughts on the ruble and the yuan? All the more so as the news came out today that China has decided to strengthen the yuan. This suggests that China is preparing to perhaps have the yuan join this list.

Also on the currency issue, as a question for Mr Sarkozy, seeing as we are all worried about the euro’s fate, have France and Germany agreed their position on supporting the euro?

Thank you.

Dmitry Medvedev: I will start since I have the simpler part of the question and will therefore try to be brief.

On the subject of reserve currencies our position is simple. Russia firmly believes that the world needs a greater number of reserve currencies.

Last year, we were all worried by the dollar’s fate. We heard all kinds of different scenarios, some of them clearly of the apocalyptic kind. This year, we are worried by the way the situation with the euro is developing. I am sure that the dollar and the euro will both continue as reserve currencies. The fact that we have these worries, however, shows that the financial system is unbalanced and in need of improvement. We therefore agreed to keep developing the financial system and continue the reform process, for the system really does require substantial modernisation. Many years have passed since the Bretton Woods institutions were established, after all, and ultimately, it is only natural that new reserve currencies should emerge.

We are not yet engaged in full-fledged dialogue on this specific issue with our French partners, but as I understand the situation no one has any serious objections to this idea. After all, such plans can only become reality if the ruble, the yuan, or any other currency becomes just as attractive as the dollar or the euro, say. This is a realistic goal, but it requires that trade be conducted in these currencies, that reserves and provisions be made in these currencies, and that securities be denominated in these currencies. We are working on all of these things and I hope we will be successful.

Nicolas Sarkozy: There are three points I want to note. First, Russia should of course play an important part in building the world’s future monetary system. Russia is a country with influence on the international stage, and a country with ideas that we could build on and develop in this area.

We do agree that change is needed and that the coming months will see it start to happen. The Chinese leadership’s statements regarding the yuan are a good sign. Nobody should feel they have the finger pointed at them, but everyone should make their contribution to building this edifice together.

Concerning French and German support for the euro, we share the same position. The responsibility that France and Germany bear in Europe is such that we agree on all of our positions. We cannot afford to let differences come between us. I meet very frequently with the Federal Chancellor [Angela Merkel], and our ministers are meeting all the time. If we do not immediately share the same views we spare no effort to reach a common position. Everything is very clear and simple here. France and Germany share the same position on the euro.

Question: Many of the contracts mentioned here today concern sensitive sectors such as space, aviation, nuclear energy, and the Mistral. Where are the limits for technology transfers between Russia and France?

Both of you said at the forum that you are relatively optimistic about exiting the crisis. On what specific elements is this optimism based? In France’s case, is the possible growth index of a little more than 2 percent one of the signs of this confidence?

Nicolas Sarkozy: Regarding the limits of the contracts we sign everything is very simple. These contracts must by in the mutual interests of Russia and France. It is as simple as that. This is what partnership is about – when our Russian friends have an interest in working with our companies, and we are ready to work with Russian companies. Our relations are those of long-term partners. We understand that technology transfers will take place if this is in both countries’ interests. 

Concerning nuclear energy, Russia is a long-established nuclear power and French and Russian sciences have been working together for a long time now.

I already explained quite some time back that our Russian friends have taken a particular position on Iran, and if this position had been different it would not have been possible to sell the Mistral to Russia. This would have been foolish. We have an extensive partnership in energy, transport, and agriculture. Russian investors have decided to build two large towers at La Defence in order to inject new life into the real estate market.

As for the future prospects and why we are optimistic, there are signs of growth all around the world. Concerning Europe and France, all of the international organisations have noted that France has a better outlook than its partners. This is certainly not something I am going to get upset about! If the situation were otherwise, you would have every reason to take me to task over it. I was very interested to hear the IMF’s encouragement for our continued reforms. As far as the growth outlook goes, together with Ms Lagarde [French Finance Minister], we made a very reasonable examination, above all of the forecasts that we set, and when we revised them we generally revised them upwards rather than downwards. At the least, we need to start laying the ground for the future.

Dmitry Medvedev: To be honest, I am not sure if the question was addressed to me too, but even if it was, I can say that I agree entirely with what Nicolas has just said. 

Question: I have a question for both leaders.

The St Petersburg forum is coming to a close, but you have another big event coming up, which has already been mentioned here – the G20 summit.

How will and how should the global economy change over the upcoming period? What proposals are you taking to the summit? On what issues do you agree and on what do you differ? Are there any issues on which you are willing to make a common stand? Thank you. 

Dmitry Medvedev: Yes, we do indeed have the meeting in Canada coming up. We began our discussions today with the idea that we need to coordinate the positions we will take in Canada. Our basic view – and I understand that this is our consolidated position – is that we must not be complacent and we need to keep moving forward. We cannot afford to relax, think that we’ve beaten the crisis and that everything will be clear and smooth sailing from here. Recent events in Europe show that not all is such smooth sailing and we need to be prepared for any turn in the situation. This being the case it is an incentive for us not just to remain in dialogue but to coordinate our positions.

We are sure that Russia and France will take an active position at the G20. We will continue to advance the cause of reforming the international financial organisations. We have already accomplished some progress in this area, but there is still quite a long way to go in redistributing the quotas, for example. We now need to ensure that the decisions taken are implemented in practice, including the real redistribution of quotas and changes in the management bodies. 

There is still much to do and many questions to address regarding the global financial system’s future. This includes the issues of ratings, audits, financial reporting. We have yet to begin tackling all of these problems, and we need to cooperate. Overall, I do not think we have any differences really on these matters. We share a very close position. You could call it a pro-European position, because as far as our economic development is concerned, on many issues we take the same point of view, and this is based on historical explanations and also on the way we see life today.

Nicolas Sarkozy: I will be very brief. I think that sometimes the G20 ends up divided into two camps as it were: one camp, which wants to keep moving and draw conclusions from the crisis, and the other camp, which thinks the crisis is starting to tail off now and there is thus no need to do anything. On practically all issues Russia and France are among the countries that want to see a new world order emerge. We do not perhaps have exactly the same views on every detail of taxation and banking, but we do share the same strategy. We want to make this understood. We are saying that this is all honest and transparent, that we share one and the same strategy. We need to learn lessons from the crisis here and now. I want to add too that we have decided to meet more often as a threesome – Russia, Germany and France – in order to coordinate our positions and advance our strategy, given that we are all pursuing an absolutely identical strategy. Within this strategy there can be various issues on which we have differing views and interests, but we are always ready to look for a compromise. 

Question: My question is for the French President. Like millions of French people you are no doubt following the events in South Africa. You know of the decision taken to send a player home. What do you think of this decision? Do you not think that in terms of representing France this shows a lack of dignity?

Nicolas Sarkozy: It is not for me to pass judgement on this issue. Sport is like life, and we do not always win. It is no good looking to me to point the finger at anyone here. This is not my job. But if the events the press reported today are true (I was not there), this is unacceptable. For the rest I place my trust in the Minister to draw conclusions from this failure and take the measures needed to fill French football with hope once more. 

Dmitry Medvedev: This question was not addressed to me but I will add a couple of words, because we feel the same emotions as the French, only even stronger, because we are not playing in South Africa, though we wanted to be there. This is sad, but not tragic. Everything will be alright in the end.