President of Russia Vladimir Putin: Mr President, ladies and gentlemen,
My talks with President of Finland Mr Sauli Niinistö were held in a business-oriented and constructive atmosphere. We had a detailed discussion of the current state of our bilateral relations and exchanged views on current international issues. Naturally, we also discussed prospects for developing our relations.
This year marks the 95th anniversary of diplomatic ties between Russia and Finland. We have built a solid foundation of good neighbourly relations and mutual partnership. We have an enormous resource in our trade and investment cooperation, and good cross-border and inter-regional ties.
Today, we gave particular attention to issues of economic cooperation. In the first decade of the 21st century, our volume of bilateral trade ties increased nearly six-fold, standing at $22.4 billion in 2008. However, trade turnover dropped in 2014, and this trend has continued in the first quarter of this year.
President Niinistö and I had a detailed discussion on overcoming the current situation. In our view, we need to use all the instruments we have created in recent years to work in that direction. This is particularly true given that there is interest on the part of entrepreneurs on both sides, particularly in launching new projects.
Direct Finnish investments into Russia in the first three quarters of 2014 increased by $452 million and, according to various calculations, including Finnish statistics, direct investments have already reached $12 billion. Based on the data from last year, Russia was Finland’s second biggest foreign trade partner.
We also discussed several major projects, including energy projects and the construction of a nuclear power plant. We know all the decisions that were made by the Finnish parliament in this regard, and we are aware of our partners’ interest. For our part, we will do everything so that the project is implemented in strict accordance with the agreements reached. The Russian side has already launched financing of this project, and made payments of about one billion euro.
We are continuing our joint work in shipbuilding, and this has become possible thanks to the United Shipbuilding Corporation’s acquisition of 100% of shares in the Helsinki shipyard. Its production capacity is full through 2017, and the overall volume of orders adds up to about $800 million. The launching ceremony for the Murmansk icebreaker, built for the Federal Maritime and River Transport Agency (Rosmorrechflot), was held in March of this year in Helsinki.
We are continuing active work at the regional level. We have created good cross-border infrastructure. We also greatly value support for tourist contacts. Russians account for 32% of foreign tourists in Finland, and the relevant services market share is worth 4.4 billion euro.
We are continuing to develop humanitarian ties, including the 16th Russian-Finnish Cultural Forum in Petrozavodsk, and in October, Russia will participate in the international Helsinki Book Fair as the theme country, and so on.
In exchanging views on the international agenda, we naturally gave particular attention to Ukraine. We believe it is necessary to strictly adhere to all agreements reached in Minsk on February 12. The OSCE special monitoring mission plays a special role in this, and it includes citizens from Russia and Finland.
And in conclusion, I would like to thank Mr President and all out Finnish colleagues for this open and highly substantive conversation.
President of Finland Sauli Niinistö (retranslated): Mr President, ladies and gentlemen,
We did indeed have quite a lengthy conversation, during which we discussed not only issues concerning our bilateral relations, but also global issues and the fact that peace does not reign in Europe today. We do indeed share the same view that if we want to make progress in resolving the Ukrainian crisis, the Minsk Agreements must be respected and implemented in full.
I was pleased to hear that the contact group and its working groups are continuing their work. Both Finland and Russia play an active part in the OSCE’s work. Finland is doing everything it can in this respect and we will continue this work, continue our involvement. We all need to make the greatest effort possible now to bring peace to Ukraine and resolve the tensions that have arisen in relations between Russia and the West. As President Putin said just now, the current international situation has already had a direct impact on our bilateral trade and economic relations.
We discussed our bilateral trade and economic ties and our joint projects. President Putin mentioned our cooperation in building nuclear power plants. We do have a joint project in this area. The situation now is such that our political forces have already expressed their view on this matter through a parliamentary decision. The political decisions have been taken and we can say that this matter is now in the hands of the companies that are taking part in this project.
We noted that Russians and Finns continue to meet and maintain their contacts, despite the current economic difficulties. We visit each other, travel to each other’s countries. Contacts through tourism and travel continue. It is good that this kind of travel is continuing, not just for the tourism sector itself, but because there are other positive effects too. It gives people the chance to learn about their neighbours and their culture, get to know each other, and share sports interests, too. We see a wide variety of contacts and interests.
Let me finish by saying that from the point of view of a small country like Finland, not all is going so badly in the world and we do see some hopeful signals. The major powers continue their dialogue and continue working together on issues such as the situation in Iraq and Syria, for example, and the problem of how to deal with the Islamic State, and that is very good and important. I therefore want to continue supporting my colleague in his active involvement and participation in international efforts.
Thank you for a frank and very interesting and constructive meeting.
Question (retranslated): A question for President Putin. Russia and you, personally, have the opportunity to influence the complete fulfilment of the Minsk Agreements and the end of the war in eastern Ukraine. Why haven’t you used your opportunities to influence these matters to the fullest extent?
Vladimir Putin: If we did not like something about the Minsk Agreements, we would never have put our signature at the bottom. We feel these agreements are fair and balanced and we exert all our influence on one of the parties in this conflict: the unrecognised republics of Donetsk and Lugansk. You cannot fail to notice that a great deal has changed in their positions. They are ready and willing to engage in talks on all areas of the Minsk Agreements.
The agreements on political settlement – there are several of them – are key elements.
First is the amendment to the Ukrainian Constitution providing autonomous rights to these territories, or, as the official representatives in Kiev prefer to say, resolving the issue of the so-called decentralisation of power.
The second issue is adopting the Ukrainian law on amnesty for many individuals in the Donetsk and Lugansk republics.
The third issue is implementing the law on the special status of Donbass: Lugansk and Donetsk.
The fourth is adopting the Ukrainian law on local government and holding those elections.
The fifth is ending the economic embargo against these territories.
I want to point out that not a single one of these issues falls exclusively under the responsibility of Donbass. These are, first and foremost, the Kiev authorities’ responsibility.
Allow me to put this in hockey terms: I will return the puck to you and ask why your colleagues in the European Union and the United States do not exert the necessary influence on the Kiev authorities to resolve all the issues I mentioned. All these positions are laid out in the Minsk Agreements, and each item states, “in agreement with Donetsk and Lugansk.” They must sit down at the negotiating table directly with representatives from these territories and come to an agreement. There is no other way.
I hope that today’s meeting will end with at least some positive results. We will work to ensure that there is more progress, so the Minsk Agreements are fully implemented.
Question: Good evening. If I may, I’d like to follow up on the previous question. The Minsk Agreements are violated so frequently and we see every day that attacks from the Ukrainian side are continuing. Mr Putin, in your opinion, is the Minsk format alive or is it dying?
Vladimir Putin: I believe there is simply no alternative. However hard it may be, this is the path that must be followed.
Question: I have a second question.
Yesterday, we heard that President Poroshenko made a statement about an alleged bribe that Russia supposedly gave President Yanukovych for not signing the EU Association Agreement. I would like to hear your comments.
Vladimir Putin: It’s regrettable that our colleagues should characterise it in such a way. If somebody believes that this is a bribe for President Yanukovych to stop him from signing an Association Agreement with the European Union, then I suppose you can consider all the resources invested by the other creditors and investors towards signing these agreements as bribes, too. And there was a lot of money – for example, from American funds.
Moreover, it is widely known that Ukraine’s new leadership signed these agreements but has put off their implementation by over a year, until January 1, 2016. So the question arises, whose pocket did that money go to, if this was a bribe? After all, by delaying implementation, Ukraine’s new leadership did all the same things that Yanukovych had suggested doing. What did he suggest? To delay signing. Whereas they have delayed implementation. Finally, the money we took out of our reserve funds went towards purchasing Ukrainian sovereign bonds under English law. They asked for these resources to support the budget – first and foremost, to resolve social issues like paying pensions, benefits and so forth.
We are not interested in how this money was used and by whom, but we are interested in the return of these funds. Once Ukraine’s total foreign debt exceeded 60% of the GDP, we had the right to demand early repayment of this money. We will not do this, due to Ukraine’s difficult economic situation. But we hope to see this money returned, as stated in the corresponding agreement.
Question (retranslated): People in Finland, as citizens and residents of a NATO member state, are concerned about the active acquisition of arms by both NATO and Russia, as well as the demonstration of military force in the Baltic Sea area. President Putin, how can you respond to such concerns on the part of Finnish citizensin this respect?
Vladimir Putin: I think the best guarantee for Finland’s security is its neutral status. Because as soon as some sort of threat occurs from any neighbouring state, Russia must react correspondingly and build its defence policy so as to neutralise possible threats in its direction.
If somebody threatens any of our territories, that means we will need to aim our Armed Forces, our modern weaponry towards the territories from which that threat originates. How could it be otherwise? NATO is advancing towards our borders; it is not Russia that is moving towards them.
Nevertheless, I would not escalate anything here. Naturally, we will analyse everything and carefully monitor it, but so far, I do not see anything that would be cause for particular concern. These are most likely just political messages aimed at Russia or its allies. We are more concerned, for example, about the deployment of the strategic missile defence system – that’s a serious matter of strategic importance.
Question: I have a question for both leaders.
At the beginning of your talks, you mentioned that our trade has decreased, and overall, our joint trade and economic cooperation is not currently in the best situation. Were you able to find any ways to overcome this crisis, as we could call it, during today’s discussion? Is it possible to increase trade in the current, complex situation?
Sauli Niinistö (retranslated): There are essentially two reasons for the decrease in trade. The first is that both nations are experiencing an economic recession, and in such conditions, it is natural that trade volume and trade indicators have also dropped. And the second reason is that in light of the Ukrainian crisis, sanctions were introduced, as well as retaliatory sanctions, and they are affecting trade indicators.
I am confident that we both hope and expect that the Ukrainian crisis will be resolved and settled, and then, trade and economic relations may gain new momentum, recover and return to the good old days in this respect.
Vladimir Putin: I fully agree with my colleague. I would add just one other reason, which is the price decrease on the global markets for our traditional export materials. Based on those indicators, the trade volume might even have remained the same, but the monetary indicator has, of course, dropped. This is simply an objective matter.
However, there are also issues pertaining to the sanctions and Russia’s counter-sanctions. I have already spoken about this during the talks; in the past, the volume of Finnish dairy products, for example, in our market increased by 11%, each year; it grew by 11%, but now it is decreasing. So, of course, this has had an impact.
Nevertheless, I want to emphasise that I agree and we believe the problems related to the sanctions, counter-sanctions and the Ukrainian crisis – all this will pass, and the crisis will be resolved. Conditions will be created for re-establishing our trade volumes.
Naturally, we talked about what can be done additionally and under today’s conditions. I hope that we will have meetings within the framework of the St Petersburg Economic Forum, where we expect to see a large number of our Finnish friends and entrepreneurs. We will discuss this matter with them as well.