Question: What do you expect from your visit to Germany?
Vladimir Putin: The relations with Germany are Russia’s foreign policy priority. We have amassed great positive experience of partnership. Both our countries and peoples are interested in intensive development of Russian-German ties. I hope that the upcoming meetings in Berlin will give them a new impetus. I would like to say that Moscow is prepared to back up with concrete deeds its commitment to the strategy of equal and mutually beneficial cooperation with Germany.
Question: Your predecessor Boris Yeltsin and former Chancellor Helmut Kohl had built up a cordial friendship; on the whole the relations between them were very affectionate. Both belonged to the wartime generation. The same cannot be said about your relations with Gerhard Schroeder. How do you see the present relations with Germany? Have they become more pragmatic and somewhat cooler?
Vladimir Putin: The styles of communication between leaders may vary. The main thing is that something real should emerge from meetings and negotiations. Something that contributes to security, political stability and mutually beneficial cooperation for the benefit of all people. I don’t think that a pragmatic character of relations necessarily means cooler relations. What matters is that the fruits of Russian-German partnership become very real for our citizens. And that, in turn, would have a favourable impact on the overall state of our relations.
Question: In recent years Germany has taken a more guarded stance on economic cooperation with Russia. It applies both to trade and to direct investments. This is often put down to the lack of legal security (tax legislation, customs, etc). Do you believe, Mr President, that some steps need to be taken in these areas?
Vladimir Putin: You are right. Our economic relations have recently shown signs of stagnation. I agree that Russia has yet a lot to do to improve the investment climate. Our task is to minimise the risk factors for Russian and foreign investors, to make our economic policy transparent and clear for years ahead. To this end we are improving our economic legislation. Amendments and additions are being prepared to laws and regulations in line with the federal law “On Foreign Investments”. Work continues on the model agreement on state concession concluded with Russian and foreign investors. Enabling legislation is being drafted for the implementation of the federal law “On Production Sharing Agreements”. Work is drawing to a close on the draft of the second part of the Russian Tax Code, which is called upon to ensure a stable and predictable tax regime in the country. We are planning to phase in a profit tax, gradually solve the problem of deduction of operating costs from the taxable base and the creation of an effective system of tax appeals.
Measures are being planned to streamline custom clearing of goods and grant preferential treatment to foreign investors. On the whole, serious work is underway to improve the protection of investors’ rights, insurance of foreign investments in the Russian Federation with the participation of the state, Russian and foreign financial and credit organisations, and international institutions.
Yet, even now about 2,000 German companies are active in the Russian market. A recent German study conducted in Moscow has revealed that the majority of German businessmen who have worked here for a long period of time challenge the widespread claim that it is difficult to do business in Russia. Contrary to widespread fears many of them are investing in our country and opening new production facilities: BMW, Knauf, Henkel, Erman and others. In short, those who are active and forward-looking are gaining footholds in our markets and are undoubtedly doing very well.
Question: Your country has lived through a very wrenching experience. How will the market economy develop? What is Mr Putin’s economic strategy?
Vladimir Putin: It looks as if the worst phase of the economic crisis is behind us. Last year, economic buoyancy in Russia increased and the GDP grew by 3.2%. Economic growth continues this year: in the first four months the economy has grown by almost 8%, industrial output by more than 10%, exports are up by 1.5 times and wages by almost 25%.
Today it is critically important for us to maintain and strengthen the positive trends, to support economic growth in order to make it sustainable.
This is the aim of the Government’s economic programme, which is currently being finalised. Only a free economy can ensure prosperity for the country. That is why the programme envisages resolute measures to make the economy less bureaucratic, to relieve it from excessive and meddlesome state regulation, to cut the tax burden and create a favourable investment climate.
The main tasks of the Government are not to interfere in business affairs, not to manage the real sector or trade, but to protect property rights, ensure an equal competitive environment and pass simple and effective laws. That will make both the state and the economy more effective. This is the gist of my approach to economic policy.
Question: Before you were elected President you said that you would curb the power of the oligarchs. Many in the West think this is no longer possible. You have also spoken about “the dictatorship of the law” in Russia. Isn’t there an inherent contradiction? What exactly do you mean by that?
Vladimir Putin: I don’t think there are any contradictions.
First, our key task is to guarantee equal rights and equal obligations of all citizens. We want to ensure strict compliance with Russian laws throughout the country. We want the rights of citizens to be respected equally in Moscow and in any other region. In the economic field it means tough measures to provide an equal playing field in terms of taxes, access to loans, the absence of preferential treatment of some businessmen. This is what I mean by dictatorship of the law.
Second, about the relations between the Government and the so-called oligarchs. We should give a clear definition of the term “oligarch”. If it means big Russian business which is doing spectacularly well through its own efforts – by introducing new goods, new technologies and breaking into new markets, we are all in favour of such business. We are proud of these fellow Russians. They are helping not only themselves but also their colleagues and the country.
But there is a different kind of “businessmen” who sponge on state budget money, enjoy easy-term credits and various exemptions from Russian legislation, in short, they grab the state resources. Some of them are trying to use the resources they thus obtain to influence the Government and society. We will wage an uncompromising war on such “oligarchs”.
There must be and will be the Rule of Law in Russia. We will not allow government power to be “privatised” and to be harnessed to serve personal or corporate interests, be it the interests of regional politicians or financial and industrial groups.
Question: In this connection, does Vladimir Putin favour greater centralisation? Early signs of it are already in evidence.
Vladimir Putin: We want an orderly government. The aim of the current administrative reform is not to limit the rights of the regions. Our historical experience shows that over-centralisation and an attempt to manage “all and sundry” from Moscow do not work. We will not depart from the principles of Russian state structure set down in the Constitution. I am sure that true independence of the regions is a major achievement of the past decade.
What we aim at is strengthening the state as the guarantor of the rights and freedoms of citizens. The main thrust of our actions is to ensure effective work of the state structure from top to bottom. To have all its component parts work as a single whole without malfunctions.
Question: You have proclaimed a fight against organised crime. Organised crime can only be conquered by putting an end to it throughout the world. Are you going to broaden cooperation in this field with the EU and especially Germany?
Vladimir Putin: You are right. Organised crime can only be conquered by uniting forces of all civilised states. We favour broad cooperation in the fight against that international evil. A legal framework for this already exists. For example, on April 28 this year the Council of Europe approved a plan of joint actions with Russia against organised crime that contains a whole range of measures.
Russia has also signed the Council of Europe conventions on legal assistance on criminal cases and the fight against corruption and terrorism. Cooperation in this sphere was the subject of a lively discussion at the recent Russia-EU summit, as reflected in its joint statement.
Last year, we signed an inter-governmental agreement with Germany on cooperation in fighting very dangerous crimes. That substantially broadens the framework and potential for cooperation between special services of the two countries in counteracting drug trafficking, terrorism, trade in people, smuggling of arms, radioactive materials, crimes against property, counterfeiting and laundering of money. These agreements have made investigations much more effective. Our law enforcement bodies are cooperating closely within Interpol.
Question: An unpleasant topic for all the parties: in spite of all military efforts fighting in Chechnya continues. With all due respect for Russia’s position on this issue some people think that you do not have a clear game plan for a political settlement of the problem.
Vladimir Putin: A qualitative change has occurred in the situation in Chechnya. The phase of the counter-terrorist operation involving large-scale use of troops is over. Now the main efforts are concentrated on preventing acts of sabotage, identifying and eliminating the leaders of the bands. These measures will continue until all the pockets of terrorism are neutralised.
The Russian authorities are increasingly redirecting their efforts to the reconstruction of peaceful life and the search for a model of long-term political settlement in the republic. Infrastructure is being restored and the work of local government is being organised. The meeting with the Chechen representatives, the heads of regional administrations, which took place at the Kremlin in March, gave a major impetus to the political process. The dialogue will constantly expand.
There will have to be a transitional period before the situation in Chechnya is fully back to normal. During that period the Government bodies in the republic will proceed on the basis of a draft law, which was submitted to the State Duma on June 8. Pending the adoption of that law the executive bodies in Chechnya will operate under a presidential decree.
The future Government of Chechnya will include those Chechen representatives who are ready for cooperation. The adoption of a final decision on the political system in the Chechen Republic and the holding of elections will mark the end of the transitional period. An arduous road lies ahead, but there is no alternative to it.
Question: The US may take the decision to deploy a space anti-missile system, a kind of mini-SDI, as early as this year. What does it mean for Russia?
Vladimir Putin: A US decision to deploy the NMD would undermine strategic stability in the relations between the nuclear powers and wreck its foundation, the 1972 ABM Treaty, which expressly forbids the creation of such a system. It should be clear that mutual strategic offensive weapons reductions, nuclear weapons reductions, could only take place if the ABM Treaty remains valid. Its destruction would make it impossible to further reduce strategic offensive weapons under the START-1 treaty. This is an objective inter-connection, and it is reflected in the Russian legislation. The START-2 would not be able to come into force and it would be impossible to conclude a START-З treaty on drastic cuts of nuclear arsenals, which are to be discussed. It would deal a blow at other agreements of fundamental and global significance, such as the Nuclear Non-Proliferation Treaty and the Comprehensive Nuclear Test Ban Treaty. I put this bluntly to President Clinton during his recent visit to Moscow.
Question: A conflict on the issue is brewing between the US and Europe. Foreign Minister Fischer criticised the American plans in Washington and offered Germany’s services as an honest broker. What do you think about that?
Vladimir Putin: The position of Europe with regard to the US plans to deploy the NMD is becoming very important for Russia. We believe that the German point of view on this problem is constructive and reasonable. It is important that the European states come out for the preservation of the Russian-American ABM Treaty of 1972 and thus in favour of strategic stability in the world. Washington is unable to implement its plans single-handedly without the help of its European allies, notably, Britain, Denmark and Norway. By hosting elements of the US national missile defence system, these countries risk being dragged into a process that would upset strategic stability in unpredictable ways. The price may be very high: after an official American notification of withdrawal from the ABM Treaty, Russia would have to consider options not only of withdrawing from START, but from the Medium and Shorter Range Treaty, whose conclusion was conditional on the legal and military framework of the START-2 – ABM process.
But I still hope that eventually favourable trends will prevail. During my visit to Berlin I would like to discuss with German colleagues our initiative on creating a common anti-missile security system in Europe. That approach, in our opinion, would help to preserve the balance of forces and safeguard the security of all European countries.
Question: Today the US argues that such a system is necessary to counter the threat from certain countries, especially in the Middle East. By the same token, Washington has invited you to cooperate on this issue. It sounds reasonable, Mr President.
Vladimir Putin: After our experts studied the true state of affairs, we have come to the conclusion that, contrary to what the US claims, no missile threat emanates from the so-called “rogue states” in the Middle East or in Asia, there is no threat today or in the foreseeable future.
I think that the slight changes to the ABM Treaty proposed by America do not adapt the treaty but actually “water it down” and liquidate it. I repeat that the American position on the NMD is a major strategic miscalculation, which dramatically increases the strategic threat to the US, Russia and other states. In fact, the American initiatives amount to “cutting off one’s nose to spite one’s face”.
I think that a truly sound and responsible approach is different. There is a positive alternative to the NMD plan.
The powerful arsenal of political and diplomatic cooperation should be pressed into service to solve the problem of new missile threats. We have laid out before the Americans a constructive programme of cooperation in promoting the disarmament process, including further deep cuts of strategic offensive weapons under the future START-3 Treaty, with the preservation of the ABM Treaty, the strengthening of non-proliferation regimes, notably, a joint effort to set up a global system to monitor non-proliferation of missiles and missile technologies.
Question: There is some concern in the West about renewed Russian claims to the status of a great power. One sign of it is a 50% increase of the military budget and a lowering of the threshold of the use of nuclear weapons under your new military doctrine. Mr President, how would Russia look then in this new world?
Vladimir Putin: Russia is not claiming a great power status. It is a great power by virtue of its huge potential, its history and culture.
Russia’s actual military spending is pretty low. If, by tradition, one compares it with the US military budget, it is 100 times less than America’s.
Our new military doctrine does not say a word about lowering the threshold for the use of nuclear weapons. If you take a close look at the relevant provisions of the doctrine, it stipulates the use of nuclear weapons as the last resort after all other means have failed. Let me also note that our approach to the problem of the use of nuclear weapons is essentially no different from that of the US and its nuclear allies.
Question: As before, the Baltic states are seeking NATO membership. Does Russia recognise their right to do so? If not, what will be your reaction?
Vladimir Putin: I am sure no state in the world would feel particularly happy about the growth of a military bloc of which it is not a member. Especially if it increases the zone of our immediate contact with the alliance. Naturally, Russia views the plans of further NATO expansion as unfriendly and prejudicial to its security. The consequences of the admission of new members bear out our conclusion: the eastward expansion of the alliance is not conducive to European stability. Look at the growing aggressiveness of some “new-comers” with regard to Russia.
As for the talk about admitting Latvia, Lithuania and Estonia into NATO, let me stress again: if NATO approached the borders of the former USSR, a qualitatively new situation would be created for Russia and Europe. It would have dire consequences for the whole security system on the continent. By the way, the references by some Baltic leaders to a “threat of Russian aggression” reveal the sort of luggage they are carrying as they knock on NATO’s doors.
Sometimes this provokes criticism of Russia for “not recognising the right of the Baltic countries to freedom”. I see a hint of such a reproach in your question. You should not simplify matters and interpret the Russian position so loosely. We believe that every state has the right to choose how to ensure its own security. But, as the European Security Charter adopted in Istanbul stresses that one cannot strengthen one’s own security by reducing the security of other countries.
We propose a different approach. Russia has submitted a broad range of proposals to turn the Baltic states into a zone of stability, security and confidence. Our proposals remain standing. We have also taken some drastic unilateral measures: we cut our troops in the north-west of the continent by 40%. We have yet to see a reciprocal move of our partners.
Question: Another delicate topic is the so-called art trophies. In spite of Russian laws some priceless art works, notably the Bremen collection, have been returned to Germany and fragments of the Amber Room stolen by the Germans have been returned to Russia. Is it a one-off gesture or perhaps the start of the repatriation of treasures?
Vladimir Putin: Don’t hasten to criticise the laws of the Russian Federation. The fragments of the Amber Room have been returned to Russia and the objects of the Bremen collection have been returned to Germany not in spite of but thanks to the Russian laws. Our legal regulations have made it possible to return what had been brought into Russia illegally and was therefore not covered by the definition of displaced values.
We are ready for constructive cooperation with Germany on the problem of displaced cultural values. The relevant Russian law is based on international law and it does not preclude the return of displaced works of art as part of mutually beneficial exchanges or as friendly gestures. Our country has repeatedly demonstrated its good will. The Dresden Picture Gallery, the “Green Vault” collection of the Saxon kings and the Pergamum Altar were returned to Germany after restoration. That policy has continued in recent years. For example, Russia has handed over to Germany part of the Walther Rathenau archive. The German side reciprocated by returning to us fragments of the Amber Room that were discovered in Germany. I am sure movement in that direction will continue.
Question: Mr President, in conclusion I would like to ask you how you see the future of Europe. What will be the future roles of Germany and Russia? And what should be the role of Europe?
Vladimir Putin: The role of Europe has been and remains unique. It is the cradle of democracy and civilisation, and a natural pole in the emerging multi-polar world. Without it not a single serious problem in the Euro-Atlantic space and in the world can be solved. So Europe must be strong, stable and democratic. There should be no dividing lines, “double standards”, and relapses into fascism, extremism, nationalism and terrorism. The latter threat, to my deep regret, is becoming more acute.
Russia sees Europe in the 21st century as a single space of democracy, prosperity and equal security for all its states. This idea of the future of our continent is in line with the multi-lateral agreements under the OSCE, including the European Security Charter.
Russia is an inalienable part of Europe. We want to and must develop not in confrontation with Europe, as was the case during the Cold War, but together with it. This is the only way to ensure long-term and sustained development of the continent.
A new Europe is emerging at different levels, and multi-lateral aspects are acquiring greater importance. We are keeping a close eye on the evolution of the European Union, the OSCE, NATO, the Council of Europe and regional organisations. Integration processes are sometimes controversial. For instance, we cannot but be worried about the attempts to put NATO at the centre of the emerging European security system. That objectively weakens the role of the OSCE, which has the greatest potential for balancing the interests of all European countries.
Peace and prosperity in Europe are only possible in the context of equal and constructive interaction. Russia and Germany can and must play a major role in it. Cooperation between our two countries would go a long way to determine the face of Europe in the 21st century.
Question: Mr President, you are thought to have a special feeling towards Germany. The destinies of our peoples appear to be intertwined in history in both positive and negative ways. What do you feel when you think about Germany and what do you expect from the German Government?
Vladimir Putin: Throughout history, Russia and Germany have been closely tied together. They were alternately adversaries and allies. Today we are partners. That is a major achievement, especially after the bloody Second World War. Responsible leaders in Moscow and Berlin must heed the lessons of the past and promote the positive traditions of Russian-German ties. It is important to support and strengthen the spirit of partnership and mutual understanding. We should look not only at today but also to our joint future. By concrete deeds in the sphere of politics, economics, technology, science and culture we should provide the Russians and the Germans with a new perspective, contribute to the well-being of our peoples, and the unity of Europe on the basis of common values of progress, democracy and freedom.