Question: Mr President, the G8 summit is about to begin in St Petersburg. What do you think will be the summit’s most important result?
President Vladimir Putin: First of all, I would like to see adopted the documents that our colleagues and various experts have worked on through out the year. I would say that this is the most important aspect of international policy and even the international agenda. It is not just any international policy, it is those very issues that are crucial for humanity: energy security, the fight against infectious diseases, the development of education. All of these are crucial issues in any state policy.
And if we are able to coordinate our positions on all these topics then that will already be a big result in and of itself.
Question: Allow me to ask something at once. After the issue of energy security was given a high priority on the Russian agenda we heard quite a few statements from Washington, for example by Dick Cheney, that some kind of energy blackmail is taking place. For example, Dick Cheney referred to the fact that Russia is exerting pressure on Ukraine and on other states. Five weeks after these statements, what will your dialogue with American President George W. Bush consist of? Can you still talk to him and can you still refer to him as your friend? Do you need an additional translator for interacting with him?
Vladimir Putin: It is no surprise that when a government adopts a position it is trying to first and foremost defend its economic or political interests. So when in the middle of the 1970s Germany and the USSR thought of constructing a gas pipeline system to provide German consumers with our natural gas, America was against this. At the time they talked about the unreliability, the problems related to possible dependence on the USSR. And we both know that no dependence ensued.
Moreover, the Berlin wall fell with the support of the Soviet Union and Germany was united. And despite all the difficulties and dramatic events of that period, Russia has been a most reliable supplier for over 40 years.
Response: Certainly, Russia is a reliable supplier. And undoubtedly this also raises the question of economic dependence. You understand much better than I do to what extent Germany depends on deliveries of gas to Russia.
Vladimir Putin: Just like Russia depends on consumers in Germany. This is the mutual dependence between the producer and the consumer. And this has a definite role with respect to ensuring security. Over time this mutual dependence must establish normal mutual relations on the world’s energy market and in international politics. In fact this is a positive rather than a negative thing.
With respect to the statements of some of our partners, including those that you mentioned, it seems to me – rather, I am confident – that all the hysteria surrounding deliveries of gas to Ukraine and the construction of the Northern European pipeline were aimed at defending American economic and political interests in Europe. And good for them, that they were able to defend their interests so persistently and effectively.
In particular, I am referring to the fact that the United States had special relations with certain eastern European countries and that they want to support them. They want to support certain political forces, for example in Ukraine. I do not think that this is the right choice because there are no pro-Russian or pro-Soviet forces there. All political forces in Ukraine are first and foremost pro-Ukrainian and nationalist, in the best sense of the word. But the Americans decided to have a stake in the political spectrum and wanted to support them by all possible means, including through cheap energy from Russia. But as I have already said, if someone wants to support political forces in one or another country, then they have to pay for it.
And the most important thing for European consumers of energy resources, including gas, involves diversifying the transport routes and supply channels. Why should you always have to depend on the agreements we have with Ukraine, Belarus or Poland on transportation? And these transit countries make their own prices depend on the conditions under which Russia is supplying gas to you. Why do you need this?
Increasing the amount of transport possibilities is in the interests of European consumers. I have been amazed, simply amazed, by how both the Federal Republic of Germany or other European countries don’t understand what is in their own interests. How can any major political party feel that it is defending Germany’s national interests if it does not understand these elementary things? Or perhaps they are defending other interests.
Question: You are now talking about agreements with Gazprom and about establishing a reliable gas pipeline that will supply Germany with gas. But a question arises: why has Moscow not taken the decision to sign the European Energy Charter, and why did you say that it is not possible to sign or to ratify the Charter? Seeing as we are talking about problems with respect to nationalization. And why is it also impossible to allow foreign companies into Russian territory or is it only good friends that are allowed in?
Vladimir Putin: First of all, I want to finish with the previous question. It is a very important one.
We were able to make majors changes in the situation. Fundamental changes. Before, our European partners, including Germany, depended on how we agreed with countries such as Ukraine on the deliveries of gas to Ukraine itself. Before this was done according to one contract. In one contract we determined the prices for Ukraine and the conditions for deliveries to Europe. Now we have separated these issues and concluded two contracts for the coming five years. One concerning transporting our gas to Germany and other European countries and the other on Ukraine. We have to applaud this decision and to thank President Yushchenko for the fact that he did this, rather than speculating on these issues. That is the first thing.
Question: Here is a question. It seems to me that you are a little bit disappointed by the American position, that they are really uniting their efforts with Ukraine, are working quite unilaterally, and are not thanking Russia for your position after 11 September. Since the whole time there is the impression that at the beginning they provoked you, and now you are responding…
Vladimir Putin: We are not children and we do not want any gratitude from anybody. I think that this really is a unilateral approach that our American partners have adopted. One cannot back any one political force by painting it with a pro-western brush. I will say to you once again that there are no solely pro-western or solely pro-Russian forces there. All of these political forces are, first and foremost, pro-Ukrainian. This has to be understood. Just as one must respect our interests since almost 17 million ethnic Russians live in Ukraine and half of all Ukrainian families have ties with the Russian Federation.
A huge economic dependence has remained from Soviet times. And other ties that are extremely important for us.
I repeat that if someone wants to support a certain political force then they can do so, but please, not at our expense. That is the first thing.
Now we shall return to the question of the Energy Charter. We do not reject the possibility of working according to the principles contained in this document. And our agreements with BASF and E.ON are the best confirmation of our desire to do so. What is that Energy Charter and what is it based on? On access to infrastructure of extraction and transport. And we say that we are not against providing such access. And we showed this through concrete agreements. We allowed BASF, for example, into one of our largest gas deposits. After which BASF allowed us to transport gas on the territory of the Federal Republic of Germany at market cost. But this is far from everything. This is a very narrow and unilateral way of understanding the problem.
I can ask you whether you know or whether your spectators today know that Russia’s energy sector is much more liberalized, almost impossible to compare with that in OPEC countries?
Question: You are saying that these reproaches are unfair and that we should not talk about full nationalisation of the energy sector. You also know about the reproaches concerning Rosneft and the fact that it was not put on the stock market. And in addition to this the question of destroying Khodorkovskii’s empire and the process connected with this arises. But of course we have already talked enough about this.
Yet the question remains: do you think investors have an interest in cooperating with Russia when they see how major companies that do not behave properly or, for example, dare to criticize the Russian government are treated?
Vladimir Putin: All the same I would still like to answer your question about the openness of our market and why we are not preparing to ratify the Additional Protocol to the Energy Charter.
Our energy market is much more open then that of many other countries that supply energy to foreign markets, for example the OPEC countries. I am not sure whether our spectators today are aware that the state is involved in only two of our oil and gas companies? Along with this we have more than ten major companies and almost all of them are private. Foreign capital has a strong presence in many of these companies. In one of these companies, TNK BP, it is fifty-fifty. And the world’s largest company that I have already mentioned – British Petroleum – has substantially increased its supplies over the last few years thanks to the supplies received from the Russian government.
In the Russian Far East American companies are carrying out multibillion dollar projects. The American company Texaco is the leader in this respect and has already invested more then ten billion dollars. In the north of the Russian Federation foreign companies are actively carrying out extraction. There are a huge number of partners working in Russia’s energy sector. Probably more than in any other country.
But there are things to which we pay special attention. The Energy Charter and the Additional Protocol refer to granting access to infrastructure for extracting and transporting gas. And so we ask our partners: “Very well, we shall give you access to this infrastructure and where will you allow us access?” And they answer: “We will reciprocate”. And I ask you: “Where are these deposits? Where are the huge gas pipelines and infrastructure like that we have?” Our partners do not have such infrastructure. For that reason signing and ratifying the additional protocols with the Russian party is a unilateral decision, and we shall not accept unilateral decisions.
And I will honestly tell you the most important thing. Today energy is one of the key sectors of our economy. And for that reason we want our partnership to be an equal one and that our partners give us access to what is important for us. And we do not always need, shall we say, access to deposits that you don’t have. We need high-tech products. But even today the COCOM lists are still in use and in practice they prevent us from gaining access to western high-tech products.
Response: But this is not the biggest problem – please excuse me from interrupting you again. Of course the biggest problem is that today the Russian economy is getting a large profit from the high oil price (it is already 80 USD and not 10 like it once was) and therefore the country’s currency reserves are different than they were in the past, and you can act differently because of it.
Vladimir Putin: I would still like to finish. And so if at one point we go to sign and ratify the agreement then we must know that if we allow our partners into the crucial sectors of our economy then our partners would allow us into crucial sectors of your economy so that the cooperation was on an equal footing…
Question: I hope that you will not be offended if we once again return to those criticisms that are always put forward with respect to Russia. They concern the fact that the G8 summit should not be held in Russia because Russia should not have this honour. You know that there are alternative meetings and complaints by non-governmental organisations regarding the human rights situation in Russia. Would you say that this is also a manipulation of interests and can you confirm this?
Vladimir Putin: All the same, I would like to finish the previous question. We are ready to cooperate in the energy sector if it is a partnership based on equal rights and if we will achieve our goals in our relations with our partners.
We know the reaction that occurred in Great Britain. Just as Gazprom announced that it wanted to buy one of their companies, everyone got excited: “The Russians are coming! Guards!” And, by the way, it is good for a liberal economy to get investments.
And I would like to close the second question. You talked about the reliability or the unreliability of capital investments in Russia. There are billions of dollars of foreign capital invested in our economy, especially in the energy sector. And everyone would like even more. And they would like us to ratify the Energy Charter to invest even more. We have billions of dollars of investments, and they are growing. So all are happy!
And regarding the unfortunate case you mentioned, that famous sad case with YUKOS and Mikhail Khodorkovskii, I have already spoken about this theme. It is hard to imagine that in the Federal Republic of Germany in three or four years people could amass many billions of dollars, personal funds. If the court decided that these assets were obtained by illegal means and made a decision then we abide by the court’s decision. And this has not stopped the inflow of foreign investments into our economy. Moreover, the level of our companies’ capitalisation last year was an absolute record, not only for our economy, but also for the world economy.
Question: 30 percent. I hope that you will not be offended if I criticize protecting this process. At any rate, perhaps we can also pass on to other questions that are linked to this?
Is it not the case that if you encourage people to make investments in Russia, and at the same time hold such legal cases, then at the end of the day this leads to nationalization? Since a large portion of YUKOS assets have now become the property of government companies. In this case, does this not shut the door to investors? Perhaps you could answer this question briefly?
Vladimir Putin: I want to tell you that if you really look at the essential thing in the decisions made by the court, then the court decided that a significant part of the assets were stolen from the state. Though of course we are talking about tax evasion. And if these assets are returned to the state, then I think it was just. This is the answer to your question: whether it was good or bad they fell to the company with a 100 percent state capital.
But as you know, today this company is engaging in the IPO process – sales of the assets. This is being done actively and in an absolutely market-based, transparent way. I would draw your attention to the fact that at present more than 560 million dollars of these shares are owned by the population, the citizens of the Russian Federation. Billions of dollars of investments are already being made by major foreign partners. And I think that this is correct. I am happy.
I cannot say whether I am proud or not – I am happy. I consider that this is correct.
Question: Mr President, a question on the debates surrounding human rights in connection with the G8 summit in St Petersburg. You know that there are alternative meetings and criticisms linked to the fact that non-governmental organisations in Russia are faced with obstacles that prevent them from carrying out their activities. And recently people are talking about the fact that in practice the state controls the Russian media, and is always publishing only positive materials on your government.
I don’t want to trouble you again and again with all these arguments, and probably you know the situation much better then I do. However, the question remains: how do you react to these criticisms? You always say that you have three thousand television channels that show different programmes on health, on sports. But here is my question: how can oppositional voices be heard if they don’t have access to major television channels? What is the situation in this respect?
Vladimir Putin: If you had really made a serious analysis of our media sources and the volume of critical remarks addressed to the President and the government then you would see that there are enough of them. There are a lot of them. And if we are going to speak about a case in which media tries to manipulate public opinion then the best example of manipulating public opinion in Europe occurred in the case that you mentioned. It was, shall we say, linked to energy deliveries in Ukraine and Europe or, shall we say, with the construction of the Northern European Gas Pipeline.
Question: Allow me to ask you about the Russian media. There really is criticism not only within Russian but from a number of international organisations who say that national television is either directly or indirectly state-controlled and also that to increasing degree the newspapers are controlled by companies that are connected to the state.
And there was also a conference held in Moscow. I would ask that you understand that it is the situation in Russia that interests us.
Of course we understand that referring to conflicts in other regions of the world follows logically. But allow us to ask you your opinion on what will happen in the Russian mass media.
Vladimir Putin: I will answer your question. I believe that our media is developing in absolutely the right direction. The number of our television and broadcasting companies – and you already referred to this number yourself – is increasing and is already more then 3,500 and the number of newspapers is more then 40,000. The majority of them are founded with foreign capital. I don’t know whether you know this or not. It is not possible to supervise everything, this is a huge volume of mass media. No, we don’t try to do this. Yes, it is national…
Question: Do you want to say that all these international organisations are either lying or that they aren’t noticing your efforts? For example, Reporters Without Borders does not rank Russia in the first hundred countries and behind you there is only Saudi Arabia or Cuba. Do you not consider this to be criticism? It is not such a bad question.
Vladimir Putin: We are trying to analyse this criticism. And certainly, wherever there is constructive criticism, of course we always react to this. But I would like to answer the question you just asked in a more general, conceptual way.
I already answered your colleagues and I can repeat the same to you. We both know that at the beginning and in the middle of the 1990s the background was this: the economic and social spheres of the Russian Federation were in disorder, we could not solve social problems or carry out our obligations to the population without borrowing many billions of dollars (and incidentally, at that time our oligarchs were earning billions for their own pockets). And on this background there was a whole system put in place to influence Russian interior and foreign policy. And in the last three, four or five years and based on the changes in the situation of the Russian economy then these means of influencing Russian society began to disappear. And some of our partners very much wanted to keep something in place so that they could continue this influence.
Little remains from the previous tools of influence, and it seems to me that they have chosen their line of attack on purpose. Though of course, in this sphere, issues arise and there are problems. It is precisely for this reason that I compared certain things that happen in both our countries to show that they don’t only happen in our country.
The ability to manipulate public opinion is no less in western countries, the so-called developed democracies, then it is here. And civil society should do everything to resist these tendencies.
Every year the state’s role in electronic media and especially in printed media is decreasing. Look at the statistics and it is obvious.
Question: I shall analyse statistical data, I promise. And I ask that you understand my persistence in touching certain themes. You know about the so-called managed democracy. It is ostensibly a friendly formulation and yet one that criticizes Russia which has established a democracy where nothing happens by chance. Does such a democracy exist?
Vladimir Putin: Recently at an event the Presidential Executive Office staff members described our position in answer to a question on managed democracy. We consider that this is a democracy that is controlled from the outside. And we have examples of this, including on the territory of the former Soviet Union. This will not happen in relation to Russia.
Regarding the non-governmental organisations you mentioned. I have already said that before adopting the law I sent the Justice Minister of the Russian Federation to our European colleagues to consult on this issue. And in the Council of Europe personnel from two departments, the human rights department and the legal department, formed a commission together with independent European experts and made written remarks. We studied these remarks and I sent them to parliament on my behalf. They were all accepted.
If we say that it is not a very good law then this must also affect our European colleagues. It implies that you are questioning their qualifications. I do not think that this is the case.
Question: However, as a whole you accuse non-governmental organisations of being financed by foreign special services or from abroad, organisations such as Amnesty International.
But allow me to come back to the question. Since Russia sees itself just as you say, how can Amnesty International be dangerous to Russia?
Vladimir Putin: We are not accusing anybody of anything. But we shall not allow organisations that deal with problems of internal policy to be financed from abroad. That is the issue. And that is the most important problem.
We want and will support the development of civil society in every possible way, including non-governmental organisations that work towards helping the environment, the population, the struggle against corruption. We are going to support all this and many other things. But we will not support and we shall not encourage foreign states to send money into Russia in hidden ways, through the special services, and for these organisations to carry out political activity inside the Russian Federation.
And I think that such an attitude is absolutely correct, if we want to provide for Russia’s sovereignty and that of the Federal Republic of Germany. And I wish you the same.
Question: It really is a very valid wish that we feel positively about. In fact it is always a question of degree. Of course now time prevents us from talking about the latest changes in Russian legislation.
How are your relations with the new Federal Chancellor of Germany? And what differences are there in comparison with your friend Gerhard Schroeder?
Vladimir Putin: I am very happy with how relations are developing with the present Chancellor. She is a very good partner and interlocutor. She has her own views on the development of our relations both for Russia and for Germany. She knows our country well. I have to give her what is due, because it really is the case. It is visible from our informal conversations.
She has her vision with respect to the development of the situation in Russia today. Incidentally, we discussed the situation concerning non-governmental organisations for quite a long time. Moreover, …
Question: When she was in Tomsk, she also visited non-governmental organisations. Did you see this as an insult?
Vladimir Putin: No, no not at all. I saw it as absolutely normal. Incidentally, I promised and sent her a comparison of the legislation that regulates the activities of non-governmental organisations in Russia and in Germany. I asked our jurists to do a comparative study and I sent her this comparative legal study. There are differences, but they are not significant.
And if we talk about the development of civil society and democracy as a whole, then I want to draw your attention to the law that was adopted recently in your Bundestag. I am referring to the Land’s inability to block certain draft projects that the legislation considers to be national issues. And it is certainly possible to see this as a restriction of the Land’s rights.
Response: It scarcely caused worries, since we are not talking about the kinds of difficulties that the opposition in Russia faces.
Vladimir Putin: You know, I could say the same to you. Do not worry about how democracy is developing in Russia.
In addition to changing the way the heads of regions come into power, we adopted a very important law that almost nobody noticed. And this law is about decentralizing power. It is a law about delimiting powers between the federal levels, regional, and then we adopted another law on local…
Response: For example, about naming governors – that was also a component of this law.
Vladimir Putin: It is not naming governors. It is changing the way that they come to power, including by being voted in by regional parliaments. But it is far from only this. We have to look at everything we do as being part of a whole. And one of the components is significantly increasing the number of municipalities (twofold, from 12 to 24 municipalities) and transferring a significant amount of powers and funds to this level.
The same thing is happening at the regional level. The federal authorities are also transferring a number of powers and sources of financing to that level. Therefore I consider it counterproductive for one to use this to rile people up, to decry it, and to frighten one’s citizens just by not evaluating the situation objectively.
Question: Yes, you do not say manipulate, but frighten which is, of course, a nicer term than that we would use. But of course we shouldn’t finish our conversation on such a note.
Allow me to ask to you a question, Mr President. George W. Bush said that he can read into your soul. What did he read there?
Vladimir Putin: He did not say that he could read into my soul. He said that he looked into my eyes and that he reacted positively.
I have already talked abut this many times. President Bush and I have very good personal relations, very trusting, and of course this helps us resolve international problems. It helps.
Question: Will you support him concerning the resolution against Iran?
Vladimir Putin: We consider that we have developed a good unified mechanism to work on very delicate issues on the international agenda, including on the Iranian nuclear dossier. And let me remind you that the mechanism consists of six countries, including the United States, Russia and the Federal Republic of Germany, who have developed a common position and gave our Iranian partners our proposals. As you know, they reacted positively. They declared that they are ready to begin negotiations on this basis.
We believe that we must not lead this situation into a dead end and aggravate it. Of course we would like Iran’s reaction to be faster. But we have negative examples of what happens when we hurry to make a decision on such sensitive and delicates issues. And also in this region we have situations from which no one knows how to get out, situations developing like, for example, the one in Iraq. For that reason we do not need to rush the issue. Resolving such large-scale issues does not need to be rushed. And no one should have any doubts that we are going to work together and search together for a solution to these problems (both the North Korean one and the Iranian one).
We have one goal and it is to provide international security in a long-term perspective. Incidentally, this is a significant and fundamental change from how things were during the Cold War. But we have a different way of searching for methods to resolve our problems. But as a rule it is in arguments, in an open and frank dialogue between partners that we will achieve the best results. I hope that this will also be the case here.
Response: Mr President, many thanks for the conversation.