President of Russia Vladimir Putin: Ladies and gentlemen, good afternoon.
Let me just inform you briefly on the results of our two delegations’ talks. The talks were business-like and constructive, as is typical for relations between strategic partners, and Russia and Italy are just such strategic partners.
We discussed our bilateral relations and international affairs. Of course, in our bilateral relations we focused above all on economic cooperation, an area in which we have seen some progress. Our bilateral trade increased by 23 percent last year and reached a figure of $46 billion. This is still slightly less than the pre-crisis level as by the end of 2008 our trade was some $7 billion higher, but the pace is good and we have every reason to hope that we will not only reach the pre-crisis level this year but even achieve a better result.
Economic ties between our countries have always been innovative in nature, not in the recent years only, but many decades ago too – it is enough to remember the experience with Fiat in the automotive industry. Our first big car plant set up with foreign participation – the Volga Automotive Plant – was a venture with Italian partners. Today, not only Fiat but dozens of other Italian companies work in Russia.
The interregional cooperation ties are highly developed. Seventeen Russian regions – industrial districts – are taking part in this programme.
Italy is an undisputed leader in cooperation with the Russian regions, the leader among European countries, and has already signed agreements with 48 our regions.
The energy sector has traditionally been an important area of cooperation, and we have seen substantial diversification in this sector: oil, gas, nuclear energy, electricity, and energy sector infrastructure. This includes the big European project, South Stream, involving, as you know, laying a pipeline system across the Black Sea to transport gas to our customers in central and southern Europe.
We work together in hi-tech sectors too. In the aviation sector, we have produced a plane together – the Superjet-100, which already has an orders portfolio of 170 aircraft. A plant assembling Italian Agusta helicopters has been built in Moscow Region, and the first helicopters will be ready in November this year.
We have a lot of experience working together in the humanitarian sphere. I will not go back through the history of our ties, which go back a long way and would take a lot of time, but one unprecedented initiative in recent times was the holding of reciprocal Italian and Russian culture and language years in 2011 which encompassed more than 500 different events. Following on from that initiative, starting this September, a series of exhibitions on Italian achievements in culture, architecture, design, and new technology will take place in Moscow.
”We hope that Italy, as our reliable, traditional partner, will help us to resolve the outstanding issues in our relations with the EU. They include signing a new basic agreement, achieving visa-free travel.“
We spoke in detail about relations between Russia and the EU, and we hope that Italy, as our reliable, traditional partner, will help us to resolve the outstanding issues in our relations with the EU. They include signing a new basic agreement, achieving visa-free travel and so on.
Of course, we also discussed the world’s hot spots, including Syria. We agreed to hold interstate consultations this autumn.
I want to thank Prime Minister Monti for accepting our invitation and coming to Russia, and for this friendly and free exchange of views we saw today during the visit of Mr Prime Minister to the Russian Federation.
Prime Minister of Italy Mario Monti (retranslated): Thank you, Mr President.
I am very grateful to President Putin for the invitation to come to the Russian Federation and meet with him here, in Sochi.
I would like to express my full satisfaction concerning the talks that I had this afternoon, as well as this morning’s talks with Prime Minister Dmitry Medvedev.
These talks are evidence of the strategic importance that Italy imparts to its relations with Russia, and its desire to support this strong momentum on a political level through practical bilateral economic cooperation, which could build even greater momentum for developing our relations.
As President Putin mentioned, we discussed many issues concerning the truly excellent bilateral relations that have developed between our nations. We also discussed the most important current international issues. I should say that Italy and Russia’s economies are truly very interdependent. Italy is the Russian Federation’s number two European trade partner and in 2011 turnover between our countries was over $46 billion. Currently, there are more than 500 Italian companies operating in your country and various promising cooperation ties have been established.
In this regard, I would like to note the highly important agreements and contracts signed between the ENI and Enel groups, both for cooperating at the bilateral level and for working locally. In particular, I would also like to emphasise the importance of the ENI Group’s involvements with the South Stream project. These continue to remain very important projects for us that will allow our nations to diversity cooperation and commodity exchanges in the economy and in the commercial sector. In light of this, we also believe that the signing of a package of documents on liberalising Europe’s energy sector between the European Union and the Russian Federation to be most important.
With regard to the aviation sector, I would like to note the joint venture between Italy’s Augusta Westland and the Russian company Russian Helicopters.
The importance of Russian-Italian relations is so great as to surpass the limits of policies of any Italian governments.
The previous governments headed by Romano Prodi and Silvio Berlusconi did everything possible to enliven and broaden relations between our two countries in all areas, giving them fresh momentum. I intend to promote the same policies through my current government.
Last night, on the initiative of the Ambassador of the Italian Republic to Russia, we held a meeting at the consulate with a large group of very well-known and most respected Italian businesspeople who stressed Italian entrepreneurs’ high level of interest in Russia.
This morning in Moscow numerous important, serious contracts were signed between Russian and Italian companies in the presence of myself and the Prime Minister of the Russian Federation, demonstrating the spirit in which we are working, as well as the fact that much has already been done, but much still remains to be done in the future.
In politics, we agreed to continue intensifying our dialogue in all areas, addressing a diverse variety of issues, including culture, the economy, and all other aspects.
Speaking of culture, we would like to use the excellent experience we gained within the framework of the Year of Russian Culture and Language in Italy and the Year of Italian Culture and Language in Russia in 2011 to expand this major undertaking through further initiatives, emphasising the importance of our cooperation in this area.
We also spoke about the next interstate talks which, as the President pointed out, will be held in Italy in October.
As far as the international financial crisis is concerned, Italy and Russia agree that it is in our common interests to work and do everything possible to overcome the crisis that has affected Europe and has influenced relations between Europe and Russia as well. We spoke about these issues when meeting with the President and Prime Minister of Russia within the framework of the G8 and the G20 as well. We, apart from the above, talked about how Italy is trying to overcome its crisis, how it is also doing everything possible to overcome the crisis in Eurozone. We are determined to continue efforts in this direction in light of the talks being held at various platforms and in light of the conversations we have had here.
We also exchanged ideas on such topics as EU-Russia and NATO-Russia relations. We continue to share a vision on the need to create a space for free movement of people, ideas and goods between the European Union and the Russian Federation. We believe this could greatly contribute to broadening relations between Europe and Russia and does not conflict with economic integration processes that are currently occurring within the CIS.
Italy believes there are no major hurdles to taking the steps within the framework of a NATO-Russia Council. Together with NATO, we could do everything necessary in order to rebuff international terrorism, stabilise the situation in Afghanistan and achieve the goals we have set for ourselves through joint efforts.
”We keep 40 percent of our gold and currency reserves in euro. Some of those reserves are in the form of government bonds from European states. We are not changing anything, we believe in the fundamental capacities of the European economy and will provide every support to our European partners’ efforts to stabilise the situation.“
I also want to say that we exchanged ideas regarding the current crisis in and around Syria and shared our opinions on this matter. We called on Russia to work with us to do everything possible to bring an end to the violence currently happening in that nation, to jointly find new approaches to settling the Syrian conflict.
In conclusion, I would like to say that in order for meetings to be successful, it is very important to have the necessary preparation, but it is also important to have the right spirit during such talks and conversations. I would like to say now that speaking with you, holding these talks and discussing important topics was easy and interesting, and I thank you for the constructive and friendly spirit that permeated our discussions and talks. Thank you, Mr President.
Question: Good evening. I have a question for the Prime Minister of Italy.
Mr Prime Minister, you are aware that today, the spread or ratio between the profitability of Italian government bonds and German government bonds is at 520 points. Do you think that such a situation, in addition to a near collapse in the stock markets, which we witnessed today, demonstrates a need to urgently call together the European Council to discuss steps and measures that could prevent such a trend? Do you think that the funding allotted by Europe to fight this crisis is sufficient, or do you believe that it is necessary for the European Central Bank to direct additional resources toward this goal?
And a question for Mr Putin.
Mr Putin, I know that you and Mr Prime Minister discussed the situation and the crisis currently underway in the Eurozone. I would like to know whether you gave any recommendations on how to best overcome this crisis.
And another personal question for you. At this time, would you purchase government bonds of the Eurozone countries, particularly Italy, Spain and others which face crisis?
Mario Monti: I do not think it would be expedient to call together an emergency summit or meeting at the European level right now. In any case, it is the prerogative of the President to summon special meetings, councils, or simply convene heads of state to discuss such issues at a European level. Emergency councils were called together many times in the past. I also do not feel we sjould summon special councils or summits at a European level right now because such an emergency council, if you recall, was convened just a month ago, on June 28–29. Within the framework of that summit, decisions were made that turned out to be particularly effective for overcoming the current situation. At the time, in the context of the football championship underway, I used football terms to say that there were no winners or losers resulting from this emergency European meeting. We identified only one possible victory, which would be to continue developing the European system, the Eurozone, aimed at overcoming the crisis, by using the best instruments for stabilisation and the strictest policies necessary for overcoming all these difficulties.
You also asked me whether it would be expedient and useful for the European Central Bank to extend new funding. Yes, of course, this would be useful, but I do not think the possibilities for immediately setting such a fund, are currently in place. I also agree with you that it would be very useful, much more useful to have corresponding banking licenses issued that can be applied to resolving the crisis situation.
Speaking of the gap or spread existing between Italian and German government bonds, I can say that this is not dependent on our current efforts to reduce the problems in the state budget. I think it is linked to the practical implementation of the decisions made at the emergency European summit in June, since right now we should apply new instruments, using a package of measures that would allow us to overcome all the difficulties. In connection with this, we are hearing a lot of statements that are destabilising the situation, incorrectly interpreting decisions that were made within the framework of that council.
Incidentally, when I was speaking with President Putin about the situation in the Eurozone, he stressed that the Russian Federation maintains a certain share of its gold and foreign currency reserves in euro and that the Russian Federation has no intention to change that share to a different currency.
President of Russia Vladimir Putin: The first part of the question concerned possible recommendations to our guests and to the Prime Minister of Italy. I want to tell you that Russia’s current economy looks quite good from the outside and even appears preferable to the economies of many European nations. It was said that if anyone is adhering to the Maastricht treaties, it’s Russia, more than many European countries.
Mr Mario Monti is well-known in Russia, Italy, and all of Europe as a true expert. He is not just the Prime Minister of Italy – he is a major economic expert and we all know him well from that angle, as a person who needs no recommendations.
As for market reactions, the markets react not only to the quantity of money provided to allay the crisis, but also the assortment and quality of measures of a structural nature, the quality and quantity of measures consolidating budgetary indicators for Eurozone. The greater the divide between the funding pumped in and the minimum of structural measures taken, the more speculative operations we will see. But it is very difficult to implement these structural measures. To do this, you need at least two conditions: you need a responsible attitude toward the processes taking place within the entire civil society of a particular country, and full trust on behalf of the people toward the political leadership.
It is true that we keep 40 percent of our gold and currency reserves in euro, and we are not structurally lowering this level of our reserves. Some of those reserves are in the form of government bonds from European states. We are not changing anything, we believe in the fundamental capacities of the European economy and will provide every support to our European partners’ efforts to stabilise the situation.
Question: You already mentioned that you touched on the Syrian crisis during your talks. In this regard, I would be interested in hearing the Prime Minister of Italy and President of Russia’s opinions regarding the UN Security Council’s decision to extend the mandate of the observer mission in Syria. Do you think this compromise means that the Council was able to overcome certain disagreements and there is a real chance of settlement, or is this simply a technical delay of an inevitable military resolution to this problem?
Vladimir Putin: Our overall position is well-known. We are confident the first thing that is to be done is for the violence to end on both sides. Both the government and the armed opposition must cease this violence and sit down at a negotiation table, and during their negotiations decide on how the nation will live in the future.
In other words, we believe that the future of the country must be decided not on the basis of military defeat or military victory of one of the sides, but rather through a negotiation process, on the basis of bilateral agreements and compromises.
As for the agreement reached in the UN on extending the UN mission, I think it speaks to the fact that despite certain differences in qualification of the reasons and the causes, compromises can be reached on the UN platform and all parties participating in the process can come to an agreement that is beneficial for everyone – most importantly, for the people of Syria. We will continue to working with our partners.
Mario Monti: We discussed the subject of Syria, and our discussion was held in the spirit of paying careful attention to the motives expressed within the framework of discussing this topic with President Putin. I understand Moscow’s caution regarding the UN Security Council’s invocation of Chapter 7 of the UN Charter, i.e., the possibility of taking corresponding actions on that nation’s territory. In my view, the risks assessment here should be well-balanced.
I fully understand the Russian Federation’s preoccupation and concern with ensuring that previous negative experiences with Syria, which we have already seen, are not repeated. But at the same time, we also must take into account the risk being discussed within the UN framework. The risk is as follows: if the United Nations does not pass the corresponding resolutions, the situation may spiral out of control, and then it will be very difficult to work even on issues of a transitional government or what will happen to that nation after Bashar al-Assad leaves its political arena.
We believe that the most expedient option with regard to Syria would be the one that was applied in Lebanon – in other words, forming a transitional government that includes all components of the society – I repeat, absolutely all components of Syrian society. Clearly, passing this kind of resolution which should be passed by the UN would be impossible without corresponding support of the Russian Federation.
Question: Mr Putin, could you please clarify your views regarding the Syrian situation, how you see Bashar al-Assad’s role in resolving this situation?
I also have a question for Prime Minister Monti. Yesterday, in an interview to Rossiya-24 television channel, Mr Monti stated that strategists and policymakers look toward the future. So what do you see in the future? Will it be difficult to overcome the current situation? I am asking you specifically as a policymaker. Are there possibilities for surmounting it?
Vladimir Putin: As far as Syria’s current leadership is concerned, as well as the so-called armed opposition, they must find the strength to launch a negotiation process, to carry it out in such a way as to make it possible to achieve mutually acceptable compromises for the future of the country.
I want to try to explain our position in the simplest language possible. I want to say what we want and what we do not want. We do not want for the situation to unfold into the bloodiest scenario of a civil war lasting many years, as happened in Afghanistan. We want there to be peace and for all the people living in that country (both members of smaller religious groups and those who are in the majority) to come to an agreement and find an approach to governing and participating in the government of the nation that is acceptable to everyone, ensuring security for all of these religious and ethnic groups in the future.
”Syria’s current leadership, as well as the so-called armed opposition, must find the strength to launch a negotiation process, to carry it out in such a way as to make it possible to achieve mutually acceptable compromises for the future of the country.“
We are concerned that if the country’s current leadership is barred from power unconstitutionally then the opposition and today’s leaders will simply change places; the leaders will become the opposition and vice versa. In that case, a civil war may continue for who knows how long.
In our view, the steps should be as follows: a ceasefire by both sides, end of violence, negotiations, seeking a resolution, determining the constitutional foundations for a future society and state, and then structural changes – not the other way around. Otherwise, we believe there will be chaos.
Mario Monti: I would like to clarify for Mr Putin that the question I was asked concerns something I said during an interview to the Russian TV channel Rossiya-24, just before this visit. I was asked to name a person whose example I could follow. I mentioned that our outstanding Italian politician, Alcide De Gasperi, had said that politicians look toward the next election and promise everything before the people go to the polls, whereas strategists look at the future and promise to do everything for future generations.
I think this is a very interesting phrase. I won’t discuss the subject and the essence of the phrase itself, its form or substance. It is difficult for me to discuss its form, since I am not a professional politician, nor am I an important policymaker who could talk about form or give another form to this phrase. But in essence, it also does not apply to me because it was said by a great Italian strategist who (I just checked online) died on August 19, 1954, and so the essence of this phrase could not in any way concern the economic situation and problems that we are facing today. But I really like the idea that is contained in this phrase, so I often say it, just as I wanted to express it before coming here, to specify the basis for my views on the situation.
Question: I have the same question for both the President of Russia and the Prime Minister of Italy. We are on the shores of the Black Sea and so it is fitting to ask you about South Stream. You already mentioned this unquestionably landmark project. Do Russia and Italy maintain an interest in bringing South Stream to fruition? In your view, is it possible to avoid letting the negative economic circumstances in the world influence the prospects of this project?
Vladimir Putin: Naturally, when we talk about infrastructure projects in energy, we always take into account the demands of the market. We know that in crisis conditions, the volume of the product consumed is falling. But we also know that after the hard times better times will always come. Experts in economic crises say the same thing that overproduction crises, long-term crises and so on are eventually followed by recovery. In the medium-term perspective, the volume of natural gas consumed in Europe will certainly increase. I am referring, in part, to certain major consumer-nations’ rejection of nuclear energy.
With this project, overall, we already know who will be buying the product that will be pumped through the South Stream laid at the bottom of the Black Sea to our consumers in Western Europe, and how much. Such projects do not start without preliminary contract work. We have received the last approval, the one of the government of Turkey, to begin construction which will start at the end of this year and be completed over the course of two years. It is certainly an all-European, multilateral project which is of interest to most of our major consumers in Europe. I am certain that this project will be implemented.
Mario Monti: I agree with everything said on this topic by President Putin. I would like to add just one remark: at the end of June, the Council of Europe adopted a development pact. Major European projects, joint projects involving supply of electricity and energy resources, transport projects – all such projects were reviewed as driving force for future development. Given that we are currently living through a period of crisis and that development is essential for us, I see the entire South Stream project as a new lever, an important lever for a step that is essential for the development of the European Union, including Italy.