Russia-EU Summit 2014-01-28 20:20:00 Brussels Vladimir Putin took part in the Russia-EU summit meeting. The Russian President had a private meeting with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso. The meeting was at the EU's initiative. The meeting continued in a working lunch format with participation by the delegations’ members. Following the summit, the Joint Russia — EU Statement on Combating Terrorism was adopted. Vladimir Putin, Herman Van Rompuy and Jose Manuel Barroso gave a joint news conference. * * * Press statement and answers to journalists’ questions following Russia-EU summit President of Russia Vladimir Putin: Ladies and gentlemen, The meeting with our European partners and friends took place in a truly business-like and very open and constructive atmosphere. This time the format of the meeting was changed on the suggestion of our colleagues from EU headquarters. We had a substantive discussion in a narrow format, which was followed by a business lunch in expanded format, where experts could voice their positions on current affairs and prospective issues. The most important thing is that we had a very frank discussion of issues on our bilateral agenda. We discussed strategic goals and tasks of our cooperation, including prospects for the creation of a common economic and humanitarian space stretching from Lisbon to the Pacific coast, which my colleagues have already mentioned. I would like to note that the EU accounts for almost half of Russia’s foreign trade, and our mutual trade turnover continues to grow despite the unfavourable situation in the global economy. Thus, last year it went up by at least 1.7%. The year before we reached a record number of $410 million in trade turnover. I believe we will exceed that figure for 2013. It is a well-known fact that Russia is a major supplier of hydrocarbons to the European Union. Our gas accounts for 24% of the [EU’s] overall fuel balance, oil – for 27%. Russia and the EU are closely cooperating in investment. Over 60% of Russia’s foreign investments are made in the EU countries: our companies have invested there some $80 billion. In their turn, the European companies are in the lead among investors in Russia’s economy: their total investment constituted $288 billion. European business is broadly represented in practically all areas of the Russian economy. EU companies are taking part in the implementation of the Nord Stream and South Stream projects to develop the energy infrastructure. European technologies and equipment play a major part in upgrading Russian industry. We have created joint aircraft assembly facilities involving a number of European companies; we produce high-speed trains with the participation of Siemens; we have built auto factories together with Renault, BMW and Volkswagen and factories to produce agricultural machinery with Fiat and so on. We are also strengthening our cooperation in science and technology. 2014 has been declared the Russia-EU Year of Science, with over 200 events on the agenda. In other words, our cooperation is of a large-scale and multi-faceted nature. However, we have to set ourselves targets that are more ambitious. One of them is to link the European and Eurasian integration processes. I am convinced that there are no contradictions between the two models: both are based on similar principles and norms of the World Trade Organisation; they could effectively complement each other and contribute to the growth of mutual trade turnover. In this context, my colleagues and I held a sincere exchange of views regarding the Eastern Partnership initiative, which was already mentioned here. We are concerned about the stability and prosperity of our common neighbouring nations. These states are striving to cooperate more actively with the European Union and simultaneously maintain close historical and cooperative ties with Russia. We must certainly help them do this, but it is unacceptable to create new, dividing lines. On the contrary, we need to work together on building a new, unified Europe. We made a concrete suggestion to the EU leaders: to study the option of creating a free trade zone between the EU and the Eurasian Economic Union of Russia, Belarus and Kazakhstan. We could certainly consider it, although we anticipated a certain reaction since there are still many problems requiring discussion and we need to analyse many matters at an expert and practical level. All this is true and we realise it, but I think we should start thinking about it now. It is important to launch such an expert dialogue. We agreed to accelerate work on the new Russia-EU framework agreement in order to harmonise the remaining issues concerning its text in time for the next summit, if possible. I don’t know whether this is feasible, but I want to stress again that Russia wants it to happen and we have made relevant proposals. We’ll see. I think many of the issues that have been under dispute until now can be resolved through dialogue at the expert level. Nevertheless, there is a number of problems, which we discussed as well. For example, the legislative decisions made by the European Union in recent years have created certain difficulties. I will not go into the Third Energy Package again now; you are aware of Russia’s position. We touched on these issues, and I hope that here, too, we will find acceptable solutions due to our mutual interest in broadening cooperation in energy. We had an involved discussion on issues of security and countering common threats and challenges, including the fight against terrorism. Incidentally, I want to use this opportunity to thank our European partners for our joint efforts to provide security during the Olympic Games in Sochi (this concerns, first and foremost, our cooperation on a bilateral basis with certain European nations). We have set up a headquarters where, essentially, representatives from many European countries’ special services are working side by side with Russian professionals on an equal basis. We exchanged views on some of the most topical issues on the international agenda, including Syria. What’s most important is that the Geneva-2 conference has been launched; preparations for it were difficult, but I want to stress that we were able to initiate this inter-Syrian dialogue through our joint efforts. We certainly realise how much our European partners did to make this happen. The same is true of certain victories in the talks on the Iranian nuclear issue, at least as things stand today. Here, too, much remains to be done together. We will continue on this path and work together, just as we agreed. The Afghan issue remains on our agenda and is discussed at the expert level, at the level of foreign ministers and their colleagues, particularly with regard to the withdrawal of international forces from this country. I feel the discussions we had were substantive and beneficial, and allowed us to outline objectives for our future cooperation. As for our consultations concerning the Eastern Partnership, we agreed with our European partners that it would be highly useful – meaning that the Russian side and our European partners have a divergent understanding of many things we encountered and which are now coming to light through the media. There is an urgent need for us to compare notes, to discuss these issues at the expert level and to understand how possible solutions in this area will influence our economic wellbeing. We agreed to hold our next summit on June 3, 2014, on the eve of the G8 summit in Sochi, Russia. Thank you very much for your attention. Question (retranslated): Wall Street Journal. A question for President Putin. Is the agreement concerning the $15 billion loan that you personally signed in December with Ukraine still in effect? For example, what will happen if the Government in Kiev changes and the opposition gains power, or if Ukraine states that it intends to renew the EU association agreement process? And if not, how will this conform to Russia’s constant promises to honour and respect Ukraine’s sovereignty? Vladimir Putin: First of all, Russia has always respected the sovereign rights of all participants in the international community, and will continue to do so. This is true for CIS member states, which were formed after the breakup of the Soviet Union, and all other nations in the world. Any decisions, any conclusion about what is or is not advantageous for a nation, should be made by the nation itself, through democratic procedures. The question concerning Ukraine signing an agreement with EU nations is not about Ukraine’s sovereign choice but about the consequences it will have on the Russian economy if it is signed. Today, my colleagues and I discussed this matter at length. For example, can Ukraine exist within the framework of a free trade zone, of which Ukraine is already a part, and asked us for earlier? We have the impression that Ukraine is being removed from the free trade zone. If this is so, then we cannot maintain our preferential regime. This is not because of Ukraine; it is because of us. Take the large-scale assembly in the automotive industry or other manufacturing sectors. Our understanding of the agreement is that goods produced in such a way on Ukraine’s territory are considered to be products made in Ukraine. When Russia acceded to the WTO, we had a long debate with our European colleagues on how to develop our automotive industry and the level of localisation that must be achieved in the Russian market. If this is a kind of a back door into our market, then naturally, we need to understand it. This is not political manoeuvring; this is about pragmatic interests, including in technical regulations and phytosanitary standards. After all, all these things will have a tangible effect on our economy. My colleagues and I agreed that we would clarify all these issues together at an expert level. As for our readiness to help Ukraine, I have already spoken about this and can repeat it now: both the loan we spoke about and the gradual quarterly decrease in energy prices, first and foremost gas, are based on necessity and our wish to provide support – not to a particular government, but to the Ukrainian nation. You know, we have an expression: when the nobles fight, the servants suffer. In other words, the ordinary people always feel the pain. And we would very much like for this burden on the ordinary people to be minimal. There is one aspect that I would like to draw attention to – well, two, actually. The first is that we, unlike the IMF, did not strictly designate the terms of this loan on paper. But we had certain agreements with Prime Minister Azarov; or rather, we had agreements that this loan is essentially not just intended to support the budget or daily operations, but development as well. It should create conditions for structural changes in the economy. Just ask the former Prime Minister, I doubt that he will hide from the press after retirement – he personally told me about these plans. In fact, the Russian Government came under some criticism at home because the public felt that it is handing out enormous sums without demanding structural reforms. We had such an agreement with Mr Azarov’s Cabinet. Naturally, we are not indifferent to the economic policy that the future Cabinet will conduct. Granted, we do not yet know who will head it and how this economic policy will be built. But we intend to fulfil our obligations. That is the first thing. My second point concerns lowering energy prices. Unfortunately, the state-owned Naftogaz of Ukraine has incurred a huge debt – $2.7 billion – since August 2013. We agreed that this debt will be paid off through the use of the loan we are providing and the lowered energy prices. However, this process has not begun yet, and the Ukrainian side has asked for a deferment again. Even worse, right now – I just heard about it this morning – the Ukrainian side is asking us to defer even this year’s payments, for gas received at discounted prices. This creates a very difficult situation for us and for Gazprom’s finances, because this revenue is part of its investment plans. Still, these are all issues that need to be worked out, and we will continue a dialogue with our partners in Ukraine, regardless of who is heading the Ukrainian Government. Question: Radio station Ekho Moskvy. Mr Putin, am I right in understanding that Russia will not seek to revise the gas contract and loan terms if an opposition-led Government comes to power in Ukraine? Russia will not initiate a revision of these agreements? Vladimir Putin: You ask if we will revise our loan and energy agreements with Ukraine if the opposition comes to power there. I can give you a straight answer that we will not do this. We have no reason to do this. We had a very constructive dialogue with the Ukrainian Government when it was headed by Ms Tymoshenko. We were able to settle a wide range of issues with her. We have never had any taboos about talking with representatives of all of Ukraine’s different political forces. The one thing that is of principle importance to us, as I have already said, is that we want Ukraine to have a solvent economy. The Ukrainian economy must be able to generate a positive development effect so that the Government can carry out structural reforms and we can be sure that our loan will be repaid. We do have big gold and foreign currency reserves, government reserves, but 15 billion is the amount the IMF planned to give Ukraine as a big international organisation, and in this case Russia has made this sum available on its own, or is in the process of doing so at any rate. We want to be sure that we will get this money back. I think this is absolutely normal, and so no matter which political forces head the Government, what matters to us is what economic policies they plan to carry out. This is the real matter of principle. That is my first point. Second, as for advice to Ukraine on what to do and how to do it, I think the Ukrainian people are quite capable of deciding this for themselves. In any case, Russia has no intention of ever intervening. I can imagine how our European partners would react if at the height of the crisis in Greece or Cyprus, say, our foreign minister turned up at one of the anti-European Union meetings there and began making appeals to the crowd. We think that this is not a very good line to take in general, and given the specific situation in relations between Russia and Ukraine, it would be simply unacceptable and impossible as far as we are concerned. Question: What about joint mediation? Vladimir Putin: I am not sure that Ukraine needs such mediation. If it does, it should say so. I think though that the more mediators, the more problems arise. We have a proverb that goes, “A child with seven nannies ends up left to its own devices.” I noted that our European partners appealed to the President and Government not to allow the use of force and so on. Resorting to force is always an extreme measure and I completely agree with our partners here. During our discussion today I talked about this too and told them about the things that we are seeing, but that their media are not showing. For example, a priest in Western Ukraine was calling on the crowd to go to Kiev and topple the Government so as to – using his own words – “prevent negroes, russkies and yids from telling us what to do in our own home”. First of all, it is astounding to hear this from a religious figure. Second, this is radical nationalism of a kind that is totally unacceptable in the civilised world. We should call on the Ukrainian Government and President Yanukovych to use civilised methods, but at the same time, we should look at what his political opponents are doing too and call on them to also use civilised methods to fight their political battles. Question: NTV broadcasting company. I realise that discussion of the situation in Ukraine brought some changes to the agenda for today’s summit. But this notwithstanding, some people think that the agenda for these Russia-EU summits hardly changes at all from one year to the next and is quite standard now. You said yourself today that the agenda included the basic agreement, visa-free travel and the Third Energy Package. This all gives the impression of being a list of issues that have been unresolved for years now, and which you discuss again each time. Maybe after this summit you could give us some kind of concrete information about something that is actually going to be carried out for real, anything at all. Maybe discussions on one of the big issues will finally reach their conclusion? Vladimir Putin: First, you said that Ukraine put changes in our agenda today. This is not the case in fact. We did indeed give a lot of attention to the question of the Eastern Partnership and in this context discussed Ukraine too, of course, as one of the countries currently in negotiations on this initiative. Second, we always pay attention to important issues that come up and that, regrettably, we have indeed not yet managed to resolve for a long time now. Today, for example, we discussed the European Union’s application of anti-dumping procedures to a number of our sectors: the chemicals industry and the metals sector. They justify this by saying that we have non-market-based gas prices in these sectors. We see this as an unfair demand and think this an exclusive demand on the part of our European partners. But these are all technical matters. Our long-running dispute over the Third Energy Package is a similar case. At the same time, let me note that our trade continues to grow with every year. I already said that it increased by 1.7 percent last year alone and set a new record. We work together in high-tech sectors such as aviation and space, where we have big joint projects. We have put together a major programme for science cooperation and have planned 200 different events. We have a separate programme for economic modernisation and have allocated a lot of money for this – 15 billion euros. This is a big undertaking. We continue our cooperation in the energy sector and in other spheres. We have very positive and strong progress. There are problems that we have not yet resolved, but we are determined to do so. I hope that by the next summit we will be able to make progress on these issues too. We debated the energy package, for example. We had problems with access to the OPAL gas pipeline, which is the continuation of the Nord Stream gas pipeline on German territory. But now we have reached an agreement on expanding our use of the system from 50 to 100 percent. In other words, we are making progress on even the most difficult issues.