President of Russia Vladimir Putin: Colleagues, ladies and gentlemen,
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Our talks with President of the Republic of Cyprus Nicos Anastasiades took place in a friendly and constructive spirit. We exchanged views on the full range of bilateral cooperation areas and on key international and regional issues, and mapped the outlines for our continued cooperation.
In August this year, we will mark 55 years since our countries established diplomatic relations. Russia and Cyprus have always enjoyed truly friendly and mutually advantageous relations, and today’s meeting fully confirmed this.
More than 40 agreements underpin the legal basis of our relations. We just signed a number of new documents, including the Joint Action Plan for 2015–2017, one of the objectives of which is to activate our economic cooperation.
In 2014, unfortunately, our bilateral trade dropped, mostly due to economic circumstances of the moment, such as the fall in oil and petroleum product prices. The EU’s anti-Russian sanctions and our response measures have also had a negative effect in that exports of agricultural produce from Cyprus to the Russian market have fallen drastically. I am sure, however, that if we work together and in focused fashion, we will succeed in resolving the situation and set our trade back on an upward growth track.
In investment cooperation, we have traditionally had good results, very high results indeed. Cyprus is in second place in terms of investment in Russia’s economy, with $65 billion. We know that a large part of this is repatriated capital, but that it is coming via Cyprus is already not a bad thing. It is good when our money comes back to work in our economy.
Russian investment in Cyprus has also reached the solid figure of $33 billion and accounts for more than 80 percent of all foreign investment in Cyprus.
Sberbank is working actively on the market in Cyprus, and Russian Commercial Bank, a subsidiary of VTB Bank, is one of the country’s three biggest credit and financial institutions.
We have agreed to do everything necessary to encourage our two countries’ companies and banks to expand their mutually advantageous cooperation.
Russia will continue to help Cyprus recover from the consequences of the debt crisis. As you know, we accorded a large stabilisation loan of 2.5 billion euros and we have agreed to restructure the loan on more advantageous terms.
What’s more, VTB Capital, together with Cyprus’ Finance Ministry, have successfully organised the first issue of sovereign Cyprus Eurobonds since the crisis, for a total of 750 million euros. We think that the Russian Federation has thus made a positive contribution to normalising the situation in the Eurozone after the difficult period in 2011–2013.
Of course, we also discussed our humanitarian contacts today. We signed the 2015–2018 Cooperation Programme for Science, Education and Culture and are in the final stages of drafting an agreement on reciprocal recognition of academic qualifications.
Last year, we celebrated the 50th anniversary of the Friendship Society between our two countries. Nicosia hosted the Cyprus-Russia charity gala concert. The Pushkin State Museum of Fine Arts held a successful exhibition devoted to ancient Cyprus.
Cyprus is one of the most popular destinations for Russian tourists. More than 600,000 Russians visited the island last year, an increase of nearly 5 percent.
Mr Anastasiades and I had a detailed discussion of the international agenda. Our positions on most issues are close or converge, as the diplomats say. We exchanged views on the situation in the Middle East and the Mediterranean region, and also on the main problems in the development of relations between Russia and the EU.
Russia reiterated its principled position on comprehensive and fair settlement of the Cyprus issue on the basis of the UN Security Council resolution. We believe the chief aim is to reach a settlement that would guarantee the interests of both communities in Cyprus. It is important that the Cypriots themselves work out mutually acceptable solutions, without interference from outside.
I would like to conclude by once again thanking President Anastasiades and all of our Cypriot friends and colleagues for this substantive discussion. We will be happy to see the President at the celebrations of the 70th anniversary of Victory over Nazism in May this year in Moscow.
Thank you for your attention.
Question: The Eastern Mediterranean is a particularly sensitive region, but it has good prospects, as we recently saw with the energy agreements between Cyprus and Egypt.
What is the significance of the defence agreement you signed, as well as the agreements that cover the energy sector?
Vladimir Putin: As I said earlier, the friendly relations between our countries are not aimed against anyone; our goal is to implement our national objectives for the good of our people, and our cooperation does not harm anybody.
Today, you witnessed the signing of many documents concerning defence cooperation. For example, this pertains to our military ships’ entry into Cyprus ports. These are primarily Russian ships participating in international efforts to fight terrorism, international piracy, etc.
First, I do not think that this could be a source of concern for anyone. Second, this is our joint work, and in this respect, we can also discuss the contribution by Cyprus to these joint efforts, and I’m confident they will bring results in those highly important, pressing areas of fighting the threats we face today, including in this region of the world.
As for energy, we have already said that this cooperation accounts for a significant portion of our joint work, but naturally, there are other prospects. We know that foreign companies (American, European and Asian ones) are already working in Cyprus’ exclusive economic zone. Many of our partners I just named, including Cypriot leadership, are interested in cooperating more actively with Russian companies. We will consider these options and are not ruling out working more closely together.
We expressed interest in this before, but as far as I know, we did not win the tenders that were declared earlier. Now we see that our partners in Cyprus are still showing interest. I repeat, today we stated that we are ready to broaden this cooperation.
Question: Much has already been said today about European Union sanctions and Russian counter-sanctions, but nevertheless, we would like to find out more details.
Vladimir Putin: Our position is well known. We are certain that the sanctions and counter-sanctions are harmful for us and our partners. The European experts themselves have stated this, arguing that the Eurozone has suffered losses of tens of billions of euros.
There is another point to which I would like to draw your attention. Yes, of course, today we see a negative scenario, but I am deeply convinced that this curtailing of economic ties between the EU and Russia will inevitably lead to the loss of a certain amount of competitiveness for the entire Eurozone in the medium- and especially the long-term: I mean the colossal opportunities of our natural reserves, the opportunities in certain sectors where Russia is a clear leader, for example in the peaceful use of nuclear energy, as well as other areas.
I want to stress that if we curtail all of this, it will inevitably lead to the loss of a certain degree of competitiveness in the Eurozone, and this will reflect negatively on Russia as well. In making such decisions, I believe it would be good for them to be made by members of the European Union based on their national interests – not just based on unclear general ideas formulated by some unknown actors. We see this based on the Cypriot example as well as several other nations, and we are grateful to our partners. I think that in protecting their position, they are protecting the interests of the entire European community.
Question (retranslated): Good afternoon. I represent the Cyprus News Agency. My question is for President Putin. First, Mr President, I would like to ask whether you think Cyprus can help improve relations between Russia and the European Union. Second, what do you think Russia can do to create a more favourable climate for renewing talks on the Cyprus issue?
Vladimir Putin: Let’s begin with the second question.
You know our position and as I said in my opening remarks, we believeCypriots themselves must resolve these issues, without external interference. Our objective is to create the conditions for reaching mutually acceptable, balanced solutions. We adhere strictly to the fundamental principles of international law and the existing decisions by the United Nations Security Council; this position does not change.
I feel that if we proceed based on these assumptions, we will be able to achieve a long-term settlement, which all the parties in this region are interested in. I am confident that if this happens, it will be beneficial to the people of Cyprus, both in the northern and southern part of the island, and to all of Europe. We will strive for this in various ways, and you know that we have never fundamentally changed our positions.
As for what Cyprus can do to help normalise our relations with the European Union. We all know well that Cyprus is a small nation, but it is a full-fledged member of the European Union, and in this respect, its voice has the same significance as the voices of other EU member states. So the position which Cyprus is stating openly on many key issues is valuable in and of itself, and we are very grateful for this.
Question: I apologise but my question does not concern Russian-Cypriot relations. Based on the information coming in, there is a new full-scale gas crisis brewing between Russia and Ukraine. Today, Gazprom announced that the prepaid volume of gas will be enough for three days at the most, and at the same time, the company is expressing concern that stopping deliveries could hit European consumers of Russian gas. And today, it became known that Naftogaz of Ukraine announced one of the conditions for renewing prepayments would be for Gazprom to stop supplying gas through the Prokhorovka and Platovo gas metering stations – in other words, directly to southeast Ukraine. Mr President, what do you see as the resolution to this situation? Is there a threat to gas transit, and how can the issue of supplying gas to southeast Ukraine be resolved?
Vladimir Putin: We have come back to the question we already touched on; President Anastasiades already spoke about the reason for the deteriorating relations between Russia and the EU: the crisis in Ukraine.
We also mentioned the Minsk Agreements today, which were signed in Minsk just recently, but were also reinforcedby a corresponding United Nations Security Council resolution. In this regard, I will note that these Minsk Agreements have become an international legal act, and it must be respected.
Why am I saying this? Because one of the provisions in these agreements concerns the revivalof the economy and social sector in individual areas within the Donetsk and Lugansk regions, in other words, the ones that are now calling themselves the Lugansk People’s Republic and the Donetsk People’sRepublic. In this respect, of course, in fulfilling this provision, which they signed, the current authorities in Kiev must ensure energy supplies to these regions.
We have learned that due to alleged damage to pipelines, Kiev suspended the provision of energy or gas to this region several days ago. At the same time, in compliance with the contract signed back in 2009 and its amendments from October 2014, and acting in full accordance with this contract, Gazprom is supplying gas to Ukraine within the framework of the prepayments in the volume needed by Ukraine. These contracts also indicate the crossing points you just named – both the contract itself and the technical annex to the contract. So Gazprom is not violating anything.
I do not know for sure whether or not the pipeline is damaged in those areas. What I do know is that they are home to four million people. Imagine if these people have no gas during winter. Not only are they already going hungry, and the OSCE has stated that the situation there constitutes a humanitarian crisis, but cutting off these people’s gas as well? What do you call that? It sounds like genocide. Apparently, certain decision-makers in today’s Ukraine do not understand what humanitarian issues are, what is humane in general, the very concept, I think, has been forgotten. I just can’t understand who could support this policy.
When we discuss such issues with the Ukrainian leadership and we talk about the need to renew the payment of pensions, social benefits, etc., we hear the same thing in reply: “They are at war with us, we will not pay them anything.” Well, all right, there are people there who have indeed taken up arms and are defending their rights and interests. There are people like that, we won’t discuss who is guilty of what right now. But there are also women and children, there are elderly people who have earned their pensions since Soviet times and have the right to these pensions. There are people with disabilities who have nothing to do with any conflicts. Who has the right to take away their livelihood? Either the Ukrainian authorities believe this to be their territory, and then they are fully responsible for the situation there, or this is not the case – and then they should say so openly.
Gazprom is fulfilling all its contractual obligations and will continue to do so. The prepayments made by the Ukrainian side are equivalent to three or four more days of gas. If there is no further prepayment, Gazprom will suspend deliveries in accordance with this contract and its amendments. Naturally, this may create a certain threat for the transit of gas to Europe to our European partners.
The Russian Energy Minister and Gazprom executives have been making vigorous attempts to not only inform but also involve our European partners in the resolution of this problem over the past several days. We hope that it will not come to extreme measures and that gas deliveries will not be suspended. But this does not depend on us alone; it depends on our Ukrainian partners’ financial discipline.