Moscow to respond to U.S. missile shield in Eastern Europe

Russia will be forced to respond to the deployment of a U.S. missile defence system in Eastern Europe by developing anti-missile shield ballistic weapons, according to the Russian leadership.

Russia's President Vladimir Putin made the comments to western media ahead of the G8 summit in Germany.

The full transcript follows below.

V.P.: Good evening ladies and gentlemen. I cordially welcome you. To begin with I would like to say some words. We consider the G8 forum as a very useful and interesting undertaking which lets us co-ordinate and synchronise our activities on the basic problems of world's economic development and international relations. Not just synchronise watches, so to say, but also adjust our positions which could be later formally accepted within G8 documents and decisions of other international organisations, including the UN, as it has already happened before.

I am really satisfied to note that those agreements we reached in Saint Petersburg last year are not forgotten. A lot of what we agreed upon is been undertaken right now. Furthermore, that the EU German chairmanship has not forgotten the main issues we discussed in Saint Petersburg. In documents that are being prepared by experts, sherpas, we can see a visible trace of what was discussed at the Russian summit. First of all it surely is dealing with the global energy system. But not only that. It also takes into consideration help in the development to, in particular, African countries. It has to do with control of the infectious disease. It also, naturally, has to do with our joint efforts on climate change.

All that I have mentioned and at the same time the most urgent problems of European politics, such as the Balkan problems and certain others, all of them will be drawn to our closest attention. I am absolutely sure that frank talks of partners will be of great use to us whatever difficult matters we are going to discuss.

I thank you for the attention you pay to our work. Undoubtedly I am not encouraged to speak for all my colleagues in the G8. But on issues that you think are of great public importance I am ready to give a more detailed picture of the Russian position.

That is all I intended to mention in the beginning. Let us not waste our time on monologues. Let's work, I am all attention.

Spiegel: Mr President, it seems that Russia does not like the West as it used to. Our relations somehow worsened. It goes together with the change for the worse in Russian-American relations. Are we approaching a new Cold War?

V.P.: In international relations and relations between countries you cannot use the terminology applied to human relations, particularly talking about honey-moon or a period previous to a man and a woman are going to marry. On the international arena and in interstate relations in all times the main principle was the interest. But the more these relations became civilised, the more obvious it was that your country's interests must be compared to the same of the others. You have to find a compromise to settle the most complicated questions and issues.

Today one of the biggest problems is that some members of the international community believe themselves to be the ultimate authority. That certainly does not create an atmosphere of mutual trust which, to my opinion, is the key matter to find not just mutually acceptable but optimum decisions. At the same time we do not think it is necessary to go too far in the dramatisation of what happens. If we speak out bluntly, frankly and fundamentally it does not mean we seek confrontation. Moreover, I am deeply convinced that on the global scene we must manage to recreate a practice of not just open discussion but readiness to search for compromise to everybody's advantage. I do believe that the certain crisis the international community is facing today would never happen and would never influence the domestic situations in some countries, like the events in Iraq would not have been such a great headache for the United States. And if you remember Russia opposed such measures. We still think it was possible to achieve more in the given conditions at the time by different means and the results would be, to my point of view, better than we witness today. Therefore we are not for confrontation and we are ready for a dialogue on equal terms, taking into account the interests of all sides.

Wall Street Journal: To proceed the previous question. One of the hottest recent problems between Washington and Moscow is the American plan to deploy the ABM systems in Europe. As Russia comes out strictly against this system and Washington says it will be deployed anyway the confrontation becomes harder.

V.P.: By the way, this is the response to the previous question. Please proceed.

Wall Street Journal: There are more and more countries which want this system to be deployed on their territory. What does Russia want to achieve by opposing this plan? Are you hoping that Washington would renounce its plans to put elements of the missile defence system in Europe, or will you have some other priorities now that Washington says it wouldn't allow Russia to veto the program?

V.P.: I would like to begin with the Conventional Armed Forces in Europe treaty. We have not just declared we would follow the requirements of this treaty, we have actually carried it out. We have withdrawn our heavy arms from the European part of Russia and have decreased our army contingent by 300,000. We also undertook some other steps. And what have we got in response? Countries in Eastern Europe are acquiring new arms. Two new bases in Romania and Bulgaria, a tracking station in the Czech Republic and the Missile Defence System in Poland. So we ask what is going on? Russian unilateral disarmament that is all. But if we disarm ourselves why we do not see at least a desire of our partners to disarm? That fact really disturbs us. In given conditions we have nothing to do but put a unilateral moratorium on the treaty.

As for the Missile Defence System. This is not just an ABM system. Once it is created it will work in an automatic mode together with the U.S. Nuclear arsenal. I would like you and your audience to pay closest attention to the fact that for the first time in history the components of the U.S. nuclear potential are being placed on the European continent. It's changing the entire configuration of international security. This is the second.

Thirdly, the position of the U.S. is explained by the necessity to guard against Iranian rockets. But those rockets simply do not exist. Iran does not have the missiles with the range of 5-8 thousand kilometres. Which means we are told this system will protect against something that does not exist. Isn't it funny? It probably would be but surely is not. We are not satisfied with this explanation.  There are no grounds to place such a system in Europe. Our military specialists think it will undoubtedly affect the territory of Russia as far as the Urals. And of course we will have to react.

Now I want to give the final answer on what we actually want. We want to be heard. We want our position to be clear. We do not exclude that our American partners will renounce their plan. We act according to common sense and hope everyone will do the same. But if it does not happen, we relieve ourselves of responsibility. And we are not those who are initiating a new obvious arms race in Europe.

We want everyone to understand clearly and precisely that it will not be our responsibility, as of now some try to blame us for the improvement of our strategic nuclear weapons systems. But we were not the first to start disregarding the anti ballistic missile treaty. During our discussions with our American counterparts we have told them we have neither resources nor desire to build such a system. But both of us understand on a professional level that the existence of the ABM system on one side and its absence on the other side creates an illusion of security and increases a possibility for a nuclear conflict.

I speak theoretically without personal assessment. The strategic balance in the world is being affected. To restore the balance without building the ABM system we are forced to introduce the anti-ABM systems and that is exactly what we are doing now.

Once we heard from our partners: nothing serious, we are not enemies and we will not be against you. We answered: we have notified you in advance that would counteract. We just do what we warn you we would do if you do not hear us. If ABM systems are deployed in Europe we would respond. We have to secure our safety. We did not initiate this process.

And the last thing. There is no place for an illusion that we stop caring for somebody. Sometimes I cannot but think why our American partners are so insistent in their attempts to deploy ABM systems in Europe if it is obvious they are not supposed to defend from Iranian's not to say about Northern Korea's missiles? We all know where North Korea is and what range those missile should be to reach Europe. It is neither against those countries nor against Russia because Russia has no intentions to attack anybody. For what purpose it is made, in that case? Maybe it is to force Russia to make self-protective steps and to prevent further Russia-EU co-operation? If it is so, though it is just one version, than it is yet another mistake which will not help us to improve international security and relations.

Spiegel: A small additional answer: could you consider the deployment of similar ABM systems near the U.S. borders, in Cuba for instance?

V.P.: I should have said it myself but you did it first. We do not plan anything of the kind, we even dismantled our bases in Cuba some time ago. At the same time the U.S. creates new bases in Europe, in Romania and Bulgaria. Our bases were dismantled because after the Soviet Union ceased to exist we carry out a policy in a different manner due to the changes in Russian society. We do not need confrontation of any kind, what we look for is co-operation, we neither need to have military bases near somebody's borders nor do we plan to have. This is first.

Secondly, modern arms do not need this actually. Usually this is a matter of political decisions.

Nikkei: I am the only one to represent Asia here, therefore I want to ask you about your policy in Asia. What is your position towards Asian countries? Possibly you would not like the question but nevertheless I should ask you about the “northern territories”, the essence of the Russian-Japanese dispute. I have just heard from my colleague in Tokyo that there will be a summit between Russia and Japan on June 7. Japanese Prime Minister Shinzo Abe will surely bring up the issue. He has already said very clearly that he wants to make the final decision on the question with you, Mr Putin. That means that probably you will have to make a decision by the end of your term. Could you comment on his political intentions?

V.P.: As everybody knows a considerable part of Russia is situated in Asia. Asia is developing rapidly therefore is of great interest to Russia, in terms of economics first of all. This potential interest is caused not only by the co-operation in the energy sphere, since Russia has vast energy resources which could potentially solve the lack of energy of the fast growing Asian economies, but in a broader sense as well. We consider the High-Tech sphere as a good ground for co-operation. We count on this co-operation to develop the Asian part of Russia. During the last 15 years we have have sophisticated processes undergoing in Russia including depopulation of Asian territories. We accept development programmes for these regions of the Russian Federation and our attention to this problem is one of the closest. That is why we are interested in Asian partners.

Probably you happen to know that our turnover is growing with both China and Japan. It grew nearly 60% last year. Japanese investors engage with the Russian market not in the Far East only but on the European part of Russia as well. We can only welcome such an interest for collaboration.

As for the disputed islands you have mentioned – we do not consider them disputable because this situation emerged as a result of WWII and is fixed by the international jurisdiction in internationally accepted documents. Though we do understand the motives of our Japanese partners. We want to overcome this obstacle from the past and we search for the solution to his problem.

I would like to mention that in my opinion there is less rhetoric in this direction and the discussion develops in a business-like and thorough manner. We welcome that. I want to remind of the flexibility of the Soviet Union which in 1956 accepted and even ratified the agreement with Japan to pass back two islands. Japan ratified the document, too, but later on rejected to fulfil it. It is hard to work like this but we are determined to work on. I wait for the meeting with my Japanese colleague in Heiligendamm. I hope we could discuss the matter and moreover consultations on the Foreign Ministries' expert level never stopped but intensified recently.

The Times: Currently the British media spotlight has mostly two questions on Russia. The first now is the Litvinenko case and the second is the British Petroleum and Shell experience in Russia. I would like to ask you two questions. Firstly, are there any conditions under which Russia could agree to extradite Lugovoy to the UK? And the second question is: should the British companies invest into the Russian economy considering the experience of Shell and British Petroleum?

V.P.: Are there conditions which could make Russia favour the UK demand to extradite Lugovoy?

Yes, there are. You just need to change the Constitution of the Russian Federation. This is first.

The second is that we need really serious grounds even if the Constitution is changed. According the information I received from the Prosecutor General's Office the British side has not supplied the indisputable evidence. There is a demand for extradition of Mr Lugovoy but there is no material to support it. So, as diplomats say, there is no substance in the demand, no essence in the materials on the basis of which our British colleagues want us to extradite Lugovoy.

The third is that we are undertaking a criminal investigation on the murder of Litvinenko in the UK. If our law machinery collects enough conclusive evidence against any citizen of the Russian Federation to pass the case into the court it would be done so. I do hope we could obtain effective help from our Britain colleagues. We do not need only demands for extradition; we need proof to pass the case into the court. We can do it here in Russia and anyone who is found guilty of Litvinenko's death would be prosecuted.

Now we return to the very fact of the demand for extradition. I have mixed feelings about it. If those people who wrote and sent this demand did not know that the Russian Constitution restricts extradition of Russian Citizens to foreign countries we would rise up the question of their competency. High rank law enforcement official should actually know it. If they do not know than they occupy inappropriate positions. Maybe they should work in the Parliament or a newspaper. Unless they knew everything all right but nevertheless did so – just to make a politically motivated PR campaign which looks silly from whatever the angle you take a look. I see not a single positive component in the issue. If they did not know – than what were they doing there with such a low competence? If they knew everything and did in spite of their knowledge – it is a purely political case. From all sides the matter appears bad and foolish.

And the last remark. If the UK authorities let such a great number of cheaters, villains and terrorists gather on their territory, they created those conditions for threatening lives of the British citizens with their own hands.

About the Shell company. I would like to specify the question. What are you interested in concerning Shell and BP? Does Shell mean the Sakhalin Island issue? Is that correct?

The Times: Yes, this question is concerning Sakhalin Island. Will the license be revoked or could they depend on keeping it?

V.P.: Have you seen the first edition of the contract? Have you ever read it?

The Times: Yes.

V.P.: Did you like what you have read? You know, it is a colonial kind of the contract having nothing to do with the interests of the Russian federation. It is a pity that some Russian officials in the beginning of the 1990s could be tricked in such a way without being put to prison. For many years Russian recourses were exploited virtually for nothing, practically for nothing. If only could they followed the letter of the contract, but nothing of the sort.

Objective data confirmed they violated the ecological legislation, the fact they did not deny, I must say. Those facts are confirmed by ecological expertise. Moreover, Gazprom had received proposals to enter the project much earlier than well known ecological scandals but restrained from this step. But when the ecological problems were found and sanctions were applied, Gazprom saved the project by joining it.

There is yet another circumstance. Gazprom did not come in because of our pressure and robbed somebody, Gazprom paid US$ 8 BLN to enter the project. It is a market price. As far as I understood, the partners united within the frames of this project are satisfied, mostly because everything is kept to the terms of the contract. Our foreign partners will get access to all the resources they planned as a result of realization of this project. I think this is a good example of co-operation and our loyal attitude even towards those situations emerged in the beginning of the 1990 evidently outside the legal framework.

As for the British Petroleum Company I should say that every country has its own legislation concerning exploration of natural recourses. Russia has its own legislation. It is a mistake if somebody thinks it could be not observed. This problem is not a solely BP problem. If you mean the Kovykta field project, than there are several Russian participants in the project. We talk about not only BP, but companies of Viktor Vekselberg and Vladimir Potanin. They are Russian economy residents. Therefore it is not the matter of BP as a foreign partner but all the stockholders who took assumed obligations for the development of the field but unfortunately could not fulfil them. They still have not started the development though according to the conditions of being granted the license they should have started gas production last year and not just start but produce a certain amount of gas. Unfortunately they failed.

There are many reasons for it including connecting to the pipeline system. But they knew about the problems when they were obtaining the license. They knew about these problems and possible restrictions. But nevertheless they obtained the license.  I do not even want to discuss how they did it. Let it be on the conscience of those who granted them this license in the beginning of the 1990s.

Please pay special attention to the explored reserves of this field – 3 TRLN cubic metres of gas. To understand this quantity you must know this is equivalent to nearly all the gas reserves of Canada. So, if the members of the consortium do nothing to use their license – how long could we stand this?
It is clear that the Ministry of Natural Recourses will bring up the question to withdraw the license. Though the negotiations are still going on and who knows how it will end up. I do not know to what decision the Ministry of Natural Recourses and stockholders of the consortium will come to. I use the word stockholders on purpose because if we talk about the BP joint-stock company itself, not just the Russian part of it, which intended to develop Kovykta field, than the BP's reserves worldwide are growing mostly because of the Russian fields, the present or previous BP's high-ranking officials could confirm that.

Moreover, over 25% of the BP income comes from the Russian Federation. We do welcome the company in Russia and will help support it as long as it acts within the framework of Russian legislation.

Kommersant: Vladimir Vladimirovich, our relations with the West recently are being damaged with tremendous speed. It looks bad and it is getting worse. There is no dialogue in the energy sphere. There are no talks about the Energy charter, and arms race is unfolding.

And you confirm it yourself. Yesterday you said that it is an arms race. You pronounced these words. There appeared a new word in your vocabulary – imperialism. This is a word from the Soviet reality. It was like “American imperialism” and “Israel soldiery” then, do you remember? And only Soviet peace initiatives stood against, and now Russian peace initiatives stand against it. I would like to ask – do you consider it possible to speak about some compromises, to compromise, to take into consideration – at least pro forma – the public opinion of Europe, of the U.S., of Russia in the end? Don't you think that the existing position is the way to nowhere? It is only enforced by this arms race, by our rockets. What is the aim?

V.P.: To tell the truth it is a strange and unexpected question for me. The arms race is really starting. But was it us who withdrew from a ballistic missile defence treaty? We have to react to our partners' actions. We were trying to convince them for two years: “Do not do this. What are you doing? You are destroying the international security system. Do you understand that you force us onto the responsive measures?” They answered: “It is nothing at all serious, do it. We are not enemies. Do what you want.” I think it was based on the illusion that Russia has nothing to answer with. We were warning – do not do that. But they were not listening to us. After that we heard about the development of the small-yield nuclear weapons. They continue to develop those weapons. We understand that so to say some hide-outs of Bin Laden in the rocks should be destroyed. Such aim possibly exists.

But maybe it is better to look for other means of solving this problem and not to develop the small-yield nuclear weapons, not to scale down the threshold of the possible use of nuclear weapons and not to put humanity to the brink of nuclear catastrophe. We are not listened to. We say: “Do not deploy nuclear weapons in space. We do not want to do that.” But it continues according to the principle “who is not with us, that is against us.” What is this? Is this a way of dialogue, a search of compromise? This is all the dialogue: “who is not with us, that is against us.”

I said about our fulfilment of CFE, the Treaty on Conventional Armed Forces in Europe. We really fulfilled it. Some control groups come, go to the sites, our Western partners make checks, and they see everything. We have done this. And we get bases, missile defence shield in Europe in response. What should we do?

You talk about the public opinion. Public opinion in Russia is for strengthening its security. Where do you see the public opinion according to which we must disarm and then maybe even divide our territory into three or four states as some theoreticians, like Mr Brzezinski, offer.

If such a public opinion exists, I would argue with it. I was elected a President of Russian Federation not to place my country on the brink of catastrophe. And if this balance in the world will be destroyed for good, it will be a catastrophe not only for Russia, but for the whole world.

Some have an illusion that it is possible to do everything not taking into consideration the interests of others. Certainly, it worsens the international atmosphere, it is the reason of the arms race you talk about. We are not its initiators. We do not want it, we do not want to divert resources for it. And we are not worsening our relations with anybody. But we have to respond.
Mention at least one our step, at least one our action which would provoke the change of the situation to the worse. There is nothing. We are not interested in it. We are interested in the situation when the advantageous environment surrounds Russia, we are interested in energy dialogue.
We already talked about this, we have been sponsoring the former Soviet republics with cheap energy products for 15 years. Why should we do that, where is the logic, the ground for that? We were sponsoring Ukraine for 15 years, this is $US 3-5 BLN annually. Just think about that! Who does the same in the world? Moreover, our actions are not politicised. These actions are not politicised.

The best example and the best proof of that (I have recently said it at the press conference) are the Baltic States which we have been sponsoring for all these years too. When we understood that they are fair with us in the economic sphere and they are ready to pass on the world and European price formation, we made advances to that. We said: “Ok. We will further deliver you energy products at lower prices. Let's set the schedule of the passing on the European prices.” We agreed on the issue and signed documents. We have been passing on the European price formation with them for three years. Even amid we had not a border treaty with Latvia and we had a hot political debate on this issue, Latvia had been getting our cheap gas until last year, in 2006 on average 1/3 cheaper than for example Germany. Ask Head of Latvian Government, he will confirm that.

When it came to Ukraine, we were said that it was a political decision and we were blamed for supporting Lukashenko regime which the Western countries do not like. We said: “Look, firstly we cannot start fighting on all fronts at the same time. Secondly, we are planning to pass on market price formation with our partners. When the time comes, we will do it with Belarussia as well.” We did it. As soon as we did it, Western mass media made noise about it: why, what Russia is doing, Russia is offending small Belarussia. Is that fair and proper attitude towards Russia? We passed on unitary price formation with all Transcaucasia and with Georgia, though we have not very good political relations with it, and with Armenia, with which we have excellent relations and which is considered to be our strategic partner. Yes, we heard a lot of uncomplimentary remarks from our Armenian partners, but finally we found the way to understand each other. They cannot pay the whole price in hard cash but they pay in property. They pay in hard resources and it is evidenced in documentation. Nobody can say that we politicise these questions. We are not going to spend huge amounts of money to sponsor economies of other countries. We are ready to develop integration at post-Soviet area but on egalitarian basis. Some get to our interests closer and closer and they suppose we will not defend our interests. If we want order and international law to rule on international scene, this law and interests of all the participants of international communication should be respected. That is all.

Kommersant: When I talk about the public opinion in Russia, I meant among other things that, to my mind, the public opinion in Russia would be totally against the new arms race in which the USSR once lost.

V.P.: I am against the arms race. I am against any arms race, but I would like to draw your attention to what I said in last year's Address about – we took into consideration the USSR experience and we will not get involved into the arms race which we are imposed on. We will not react in the same way, we will respond by means of other ways and methods which are not less effective. It is called “asymmetric answer.”

The U.S. builds a huge and expensive missile defence system which will cost tens of billions of dollars. We said: “No, we will not get involved in this race. We will build rather cheap but rather effective missile penetration aids and thus preserve the balance of powers in the world.” And we will act further in the same way.

Moreover, I would like to draw your attention that in spite of the fact that we manage to find these answers, the volume of our defence expenses in relation to GDP does not grow. It remains the same – 2.7%. And we are planning the same volume of defence expenses for the nearest 5-10 years. It absolutely complies with the average defence expenses of NATO countries, it does not exceed that figure, and in some cases it is even lower. And we use some certain competitive advantages – rather developed military-industrial potential and the intellectual level of those people who work in our military industry. We have good results and people. A lot of this is preserved and we will do everything not only to preserve but to develop this potential.

Corriere della Serra: Mr President, two more points concerning the strategic balance in Europe. I would like to ask, is Intermediate-Range Nuclear Forces (INF) Treaty in danger after the situation with CFE?

And secondly, you said that you do not want to take part in an arms race. But in case the U.S. continues to build the missile defence shield in Poland and Czech Republic, do not we return to the times when the former Soviet nuclear power were directed to European cities, goals in Europe?

V.P.: Certainly. Certainly, we return to those times. And it is evident that if the part of the strategic nuclear potential of the U.S. appears to be in Europe and, as our military specialists suppose, will threaten us, we will have to take the responding measures. What are these measures? Certainly, the new goals in Europe. And it is the technical question, what means of destruction of objects constituting, according to our military, a potential threat to the Russian Federation – ballistic or no-ballistic missiles, or absolutely new systems – it is a technical question.

Corriere della Serra: And what about INF Treaty?

V.P.: Concerning intermediate-range ballistic missiles and short-range missiles – this is a wider problem and it does not have any connection with U.S. missile shield defence.

The matter is that the U.S. and the Russian Federation have a burden not to develop intermediate-range ballistic missiles but many other countries do it, for example Israel, Pakistan, North Korea, Iran. If this arrangement was a common one, everyone would be certain to keep up with it. But taking into consideration the fact that almost all countries of the world develop intermediate-range ballistic missiles, I do not understand why Russia and the U.S. must limit themselves.

We have agreements concerning non-proliferation. It is clear. And these agreements are embracive. Though with difficulty, we keep the world from steps which could complicate the situation or lead to a catastrophe.

When it comes to short-range missiles, these agreements are not embracive that is why we think what we should do provide our safety. I repeat once more, a lot of countries do it, including our neighbour-countries.

And once more I would like to stress that it does not have a direct connection to U.S. plans to deploy missile shield defence system in Europe. But we will find answers to both dangers.

Figaro: Mr President, at the G8 summit you will meet the newly-elected President of France Mr Sarkozy. You had close working relations with former President Jacques Shiraque. How do you see the relationship of Russia and France during the Sarkozy presidency due to the fact that Mr Sarkozy is considered to be America's friend and to be focused on human rights problems in his external policy?

V.P.: You know, I am very happy that somebody is focused on the human rights problems. I have read the report of Amnesty International and they have a lot of questions not only to Russia but to our partners, including our G8 partners. Moreover, the criticism is very tough, the issues of mass media rights violation, tortures, police violence to the detained people and migration legislation are touched upon. I think we all must pay attention to such things.

What concerns somebody being a U.S. friend, I am only glad about it as we consider ourselves to be a U.S. friend as well. I say it without any exaggeration, though some can find in it some inconsistency against the background of our rather hard missile defence problem discussion, Conventional Armed Forces in Europe Treaty issue and so on. It can look a bit unconvincing but it is really so. Our relations with the U.S. are not the same as they were 20 or even 15 years ago. And when the U.S. President says that we are not enemies any more, I do not only believe him, I suppose so myself. Because the question is not who and whose friend is. The question is how we can strengthen the international security system, what we should do for this and what keeps us from it. And we have different positions and different opinions concerning this issue. We have one point of view, our American partners have another.

As far as I could notice, when Mr Sarkozy was giving one of his first public speeches, he stressed that he is really a U.S. friend. But nevertheless he underlined that it didn't mean that they must agree with the U.S. on all issues and they could have their own point of view on a row of issues. I can only greet that because I have the same approach. And I see nothing queer in the fact that we express our opinion on some issues and defend our position. What is queer in it?

With concern to our relations with France, they are deep, we have bilateral interests in political sphere, coincidence of interests, and we have close positions on many international problems. We have a large volume and, the main thing, very big potential of economic co-operation. All this creates a good base for the development of relations in the future. I reckon on this very much. Anyway, the phone conversation which I had with the newly-elected President of France, confirms that the French leadership is set for the same positive work. We have planned a meeting with President Sarkozy in the G8 framework and we will get acquainted personally. I think that we will establish good working and personal contacts. Anyway, I would like that very much, we will go for this.

Figaro: Let me ask a question concerning gas. It is about Stockman gas field and Gazprom. Gazprom decided to exploit it on its own without making consortium. And as you know it is a kind of exam for the investment climate in Russia. Do you think that there exists any possibility for Western companies to take part in this project?

V.P.: Gazprom hasn't said that there will be no consortium. Gazprom said that there will be no other subsoil developer. Let us differentiate these things. That means that Gazprom will be the only subsoil developer, the only owner, but it doesn't mean that it is not going to turn to the joint work with foreign partners. For example in the issues connected with exploitation. If there are issues connected with gas liquefaction – then in projecting and construction of the gas liquefaction plant, in distribution, in off-take. Gazprom is set for broad co-operation with foreign partners, as it was earlier.

Globe & Mail: Some continue to say that Russia must not be a G8 member. And some already say that your country walks off the principles of liberal democracy. And some say that your country appeared to be not able to improve its positions in providing political liberties, human rights development transparency and so on. And a part of Russian economy withdrew from the principles of free economy, and returned to the state control. If to take into consideration this argument, your country does not fit well the set of industrially-developed countries which are G8 members. How could you react to such statements?

V.P.: I would say that it is yet another nonsense and maybe the wish to attract attention and reach some political goals, pinpoint some problems or draw special attention to them. We did not invite Russia to G8 ourselves. We were invited and we co-operate with it with pleasure.

We are on the 9th place in the world in the economic volume and according to some data we have drawn ahead of some G8 countries. If we calculate the economic volume in a definite manner, we have drawn ahead of some G8 countries.

Russia has huge gold and currency reserves, third in volume in the world. Russia conducts a very balanced macro-economic policy and thus influences the world financial market. Maybe not very significantly at the moment, but nevertheless it does.

Russia is one of the leading players in international energy policy. I have already said that last year that last year we occupied the first place in the crude-oil production, drawing ahead of everybody. And we have been occupying the first place in gas production for a long time already. The role and significance of Russia in the sphere of energy will rise further.

In the end, Russia is one of the biggest nuclear powers. Let's not forget that Russia is one of the UN founders and a permanent member of the Security Council.

If someone wants to make G8 a closed club of several states which will try to solve the problems of humanity between themselves, nothing good will come of it.

Vice versa, an idea of enlargement of this club is considered, by means of a more systematic involvement into the G8 work of other countries – China, India, Brasilia, Mexico, Republic of South Africa.

Let's not show a false face on the issue of democratic liberties and human rights. I have already said that I have Amnesty International report on the U.S. as well. I think I shouldn't repeat in order not to offend anyone. If you want, I will repeat now the statements which concern the U.S. Amnesty International concludes that the U.S. is the main breaker of the rights and liberties of a person at global rate. I have a quote and I can show it. And it is motivated.

There are the same claims to the UK, France and Germany. There are claims to Russia. But let's not forget that other G8 member countries did not experience such dramatic transformations which Russian Federation underwent. They have not gone through the Civil war which actually took place in the Caucasus.

Nevertheless, some so called common values are much more preserved in our country than in other G8 countries. Despite the serious conflict in the Caucasus we have kept the moratorium on the death penalty. Simultaneously some G8 countries use capital punishment and death sentences are fulfilled toughly and in series.

Such discussions are possible but baseless.

I repeat. During German presidency in the G8 certain rules as for work with leading economies on the permanent basis might be drafted. I have already mentioned these countries and we will certainly support our German partners. I think it is quite right.

Globe & Mail: You spoke about the problems of a unidirectional world. Do you consider some sort of alliance, some formal relations between the countries which could form alternative centre of power in the system of the international relations?

V.P.: I believe it still will be dead end and wrong way. We stand for the multi-polar world which should diverse and take into account the interests of the major part of international society. We should draft such rules and learn to observe them.

Spiegel: The former German Chancellor Gerhard Schroeder called you “a democrat at his finest”. Do you consider yourself as such?

V.P.: Am I “a democrat at his finest”? Certainly I am absolute and clear democrat but the thing or rather tragedy is that I am the only one in the whole world. Let us look at North America – it's terrible – tortures and the homeless, Guantanamo, keeping in custody without investigation and trial. Let us look at Europe: tough attacks against the protesters, rubber bullets, tear gas here and there, killing the protesters in the streets. Leave alone the post-Soviet space. Ukraine was the only hope but they have totally discredited themselves and are now drifting to complete tyranny. Total violation of the constitution, of all the legislation, etc. After the death of Mahatma Gandhi I have nobody to speak with.

Spiegel: Do you notice any tendencies of restoring totalitarianism in your country?

V.P.: Complete lie, do not trust.

Spiegel: We had close relations with Gerhard Schroeder. Do you consider that the new Chancellor Angela Merkel wants to have closer relations with the U.S. than with Russia?

V.P.: Every person, every politician chooses their own type of behaviour, some priorities. I do not feel any worsening in the German direction. Bearing in mind the good relations with Gerhard Schroeder I could say that I have very good and businesslike relations with Ms Merkel. Certainly, she is more persistent in some aspects. She eagerly fights for Polish meat but as I have already mentioned does not want to eat it herself as it is known to be arrested in Berlin. However, we have no disagreement on key issues preventing us from developing intergovernmental ties. Our relations are very pragmatic and stable. We see the continuity of the previous government attitude towards Russia.

Kommersant: My news paper have recently touched upon particular problem that two days ago Federal Customs service prohibited the export of biomaterials samples, it simply does allow to take them out of the country.

V.P.: What are these biomaterials?

Kommersant: The samples of biomaterials. Tests of human blood, body's particles which are required to make qualified analysis of these tests by the Western databases to diagnose properly cancer patients and finally make necessary surgery and thus help them. Customs does not allow to take these biomaterials out of the country. There are several versions but the situation remains unchanged. Federal Customs Office today made a statement that some regulation in this field will be drafted but the specimens are already not allowed to be exported. What do you think?

V.P.: It is hard for me to say something because I am not familiar with the case. Some regulations should be drafted. Health Ministry should take part in it. If you say that the specimens are exported to help the people then I wonder what help was rendered before and to whom? Is there any statistics? I have no such statistics. I generally doubt that anyone got any specific help after some biomaterials were exported.

Kommersant: If some was diagnosed properly then help was rendered. Proper diagnosis was made on the basis of international databases located abroad.

V.P.: Where is the diagnosis? Please, show me the statistics that someone was properly diagnosed as a result of this work.

Kommersant: We will show it to you.

V.P.: Send it to me but all that should be done together with the Health Ministry. All the countries have certain rules concerning that matter as well as the regulations on exporting human organs, tissues, etc. This is a very sensitive question and every civilised country should have regulations on that, ours included. I do not know the details, but the regulations will be drafted and everyone will act within their framework.

Kommersant: Before they are in place could the borders open? Will the previous regulations be in force as far?

V.P.: There are no any previous regulations. If there had been any, there would have been some violation. But there were not any. There should be regulation in place drafted together with the Health Ministry.

Nikkei: People in Asia look at Russia in the light of the relations with the U.S, with Europe. I honestly believe one should look at Russia as an Asian country directly because it is a large country. A considerable part of Russia is in Asia. Asia is booming economically, it is big rise, hardly imaginable before.

All the Asian countries are quickly developing. The rise has resumed in Japan, China is certainly growing quickly too. Moreover, there are various bilateral economic agreements in Asia envisaging preferences in trading and so on leave alone international multilateral aspects. Russia demonstrates high dynamics in its economy. How do you plan to participate in economic growth in Asia and how do you plan to work within the six-party group? Are you planning to use six-party co-operation as a way of co-operation?

V.P.: Please, clarify what sort of six-party co-operation do you mean?

Nikkei: I mean North Korea. Six-party talks on solving the North Korean problem. Russia takes part in these talks aimed at solving the North Korean problem. How do you plan to participate in this process if you do?

V.P.: We are actively working in the framework of six-party talks on North Korea's nuclear problem. Moreover, you could possibly learn that our position on this complicated problem is rather productive and resulted in positive achievements in this case. We always tried to avoid creating dead ends during the talks, to take into account the interests of North Korean partners and finally reached such agreements which are acceptable for all. China also has done a lot to achieve the positive outcome. I think all the participants have demonstrated goodwill and showed that despite an acute problem it is possible to reach a compromise if there is a will to agree and to find a compromise. We will work further.

As for Asia as a whole, I have already mentioned that it is one of the priority fields. We will work in the framework of the international organisations. We are taking part in various Asian forums and we will continue this work.

As to the economy, pressing energy problem, it is known that an oil pipeline is about to reach the Pacific coast. We are considering the same project in the gas industry together with building a gas pipeline to China and once more to the Pacific coast.

We will also continue work in the other fields like hi-tech, military-technical co-operation. We will further develop the co-operation with Asia in various fields.

The Times: Tony Blair has finally decided to support Gordon Brown to become new Prime Minister. Do you think it is right? Whom would you like to see as Russia's new President?

V.P.: If you mean Gordon Brown in spite of all my respect for him I doubt he could become Russia's president

As for the choice within the Labour Party it is not our business. We know Gordon Brown as high-class professional. I hope if he finally heads the UK government all the positive development in the past will be envisaged and we will be able to develop our relations with the UK further. We have a lot of mutual interests in various fields. We discussed it several times with Tony. We discussed the problems of our co-operation and the prospects of our interaction in a wider panel – between the governments of Russia and the UK.

I remember the warm reception when I was on an official visit in the UK. All that is our positive legacy which enables us to go on. As for the decisions within the Labour Party we will accept any one and will work with any partner.

The election of the President in Russia will not be within any political party but by means of direct and secret vote of the country's population.

The Times: Anyway, what should this person be, what are the features you would like to see?

V.P.: First of all the person should be respectable, honest, highly professional, experienced one, with positive work either in Russia's region or in federal bodies. The person should be the one whom the majority of Russian voters could put confidence in during the election campaign.

Spiegel: Could this person be the one who already was the President?

V.P.: Previously we had one President of Russia only – Boris Yeltsin. Today it is a commemoration day of him, 40 days after his death. There were no other presidents in Russia. My term comes to an end. I honestly do not understand you.

Wall Street Journal: Your term as a president comes to an end. How would you like your presidency to be viewed in history? Where do you see the main achievements of your presidency to be marked? Who are the Russian and world leaders with whom you'd like your presidency to be compared?

V.P.: Let's start with the last item. What is the purpose of such a comparison? Particular situation in the particular country in the historical period is unique. I do not think someone should be compared to another one. After some time the specialists, the citizens and the experts will be able to make an impartial assessment of my achievements during eight years of the presidency.

I believe there are the things me and the persons who worked with me could certainly be proud of. These are the restoration of the territorial integrity of the Russian Federation, strengthening of the state itself, steps towards establishment of the multi-party system in Russia, strengthening of parliamentarism, restoration of the armed forces potential and certainly economic development. You probably know average GDP growth during that period was 6.9% annually. It amounted to 7.7% during the first 4 months this year.

When I started to work as president in 2000 30% of the Russia's population was living under poverty limit. This amount decreased by a half to 15%. By 2009-2010  we could reach 10% which is on the European level.

We have paid all the debts despite the enormous amount and now have the best foreign debt/GDP ratio in Europe. In 2000 gold and foreign currency reserves amounted to $US 12 BLN with the debt being over 100% of GDP. Now we have the third biggest reserves in the world. During the first 4 months of 2007 we added $US90 BLN to the reserves.

There was the permanent outflow of the capital in the 1990s and even in 2000-2001 amounting to $US15-20-25 BLN annually. Last year we registered the influx of the capital amounting to $US41 BLN. During the first four months the influx of $US40 BLN was registered. Last year the Russian stock market experienced tremendous rise in capitalisation exceeding 50%, precisely 53% if I am not mistaken. It is one of the best if not the best figure in the world. Our economy became the 9th in the world after being one of the last ones and even exceeded some of the G8 countries by the volume. This gives us the opportunity to solve the social problems. The increase of real incomes is about 12% annually. During the first four months of it amounted to 18% and that of the salaries – 11-12%.

As for the main unsolved problems the major and the most acute is the disparity of the incomes between those who earn and get quite a little and those who earn and get very much. Fighting the poverty is the main task for the near future. We should do much to improve the pension system because the replacement co-efficient (pension to average wages ratio) is lower in Russia than in Europe. The ratio of the incomes of the most wealthy and the poorest is 15,6-15,7 times which is less then in the U.S. (15.9 times) but more than in the UK and Italy (13,6-13,8). But it is still too high for us and we should further fight the poverty.

Another task is demography. We should try our best to change the situation. We have adopted a special programme in this sphere. I will nit repeat it. We allocated huge funds for that. I am sure we will achieve the results.

One more thing dealing with state development. We are permanently criticised for power centralisation but the decisions on decentralisation are usually not paid attention to. Considerable powers have been transferred to regional and municipal authorities.

I was surprised with the discussion in Germany on what should be given to Federal lands in exchange for some powers taken from them. We solved this problem long ago. It is funny for us to hear that the municipal authorities have right to decide whether to open or close a shop and so on. They have much wider powers in Russia than in many European countries. We consider it as step in right direction. Unfortunately these powers had not been supported with the adequate funds in the past but we are gradually improving the situation. That's the general view but it is also a lot to be done.

Corriere Della Sera: I understand that the Russian citizens will elect the future president but could you possibly tell us about your activities after that.

V.P.: I will continue to work. I cannot tell you now where I will work and in what position. I have some ideas but it is too early to reveal that. According to Russian legislation I am far from pension age. It would be ridiculous to stay at home or as they say it in Russia to idle.

I repeat I will not reveal my plans by the moment. It will be silly to put it seriously to excite the public opinion in Russia. Let us wait and see the course of the political process in Russia in the end of this year and at the beginning of the next one. There are various variants.

Corriere della Serra: About Russia's foreign policy. Sometimes it seems to me that Russia's foreign policy presents no real alternative to, for instance, the American of the European foreign policy?

Let us take two examples. Iran. Russia certainly does not want Iran to become a nuclear power because it is close to Russian borders. However what is the alternative to top sanctions and the Western policy, the policy implemented by the West with Russia's participation, say, within the framework of the UN? What are the variants Russia could propose?

Next example is Kosovo. I know your stance on Kosovo, on direct talks between the Serbs and the Kosovars. Do not you think such a stance against the Ahtisaari's plan in the UN in fact encourages Kosovo to declare unilateral independence?

V.P.: As for the Russian proposals to solve some complicated and at first glance insolvable issues we have just discussed the problems of North Korea with your colleague Mr Ota. We know that despite its sophisticated nature it was solved after the parties involved decided not to excite it and not to drive it to a dead end but started to look for a solution and reached a compromise. It was achieved without war and threats. We support that way of solution.

As for Kosovo you mentioned our support of the dialogue between the Albanian population of Kosovo and the Serbs but it is not the whole our vision. I would like to elaborate.

Firstly, our stance is based on the international law principles including the territorial integrity of the state.

Secondly, Our position is based on the unanimously adopted resolution 1244 of the UN Security Council which is not cancelled. The resolution itself and the supplements to it clearly determine Kosovo as a part of Serbia.

Further, if we want to put the principle of self-determination of the nations which clearly was the Soviet approach during the fight against colonialism over the principle of the territorial integrity then the solution and the approach should be the universal ones and apply to other regions of the world or at least of Europe. The statements of our partners claiming Kosovo case is a unique do not convince us. There are no arguments that the Kosovo case differs from the situation in South Ossetia, Abkhazia or Transdniester. One case deals in the Yugoslav Communist empire disintegration, the other one – with the Soviet Communist empire disintegration. All the cases involve ethnic conflicts. There was a war and casualties, criminals and victims in all these places. South Ossetia, Abkhazia and Transdniester feel themselves independent for already 15 years. They have elected parliaments, presidents, adopted constitutions. There is no difference.

That is why we do not understand why we should support certain principle in one place in Europe and follow other principles in other parts of Europe rejecting the right for self-determination for small nations of the Caucasus.

Further I would like to mention that I do not exclude that gradual work with the Serbian side could result in some changes in their views on Kosovo. I do not want to be responsible for the Serbian side, but persistent and delicate might result in some sort of compromise.

I do not understand why we should humiliate a certain nation in Europe and put him on the knees the whole country to consider those who made it as their enemies. Such issues should be solved through an agreement and, I repeat, compromise. I think such opportunities still exist.

We hear one answer only: let's hurry up. Why should we hurry up? What is the reason for it?

Corriere della Serra: And what about Iran?

V.P.: I have already mentioned that we found a solution on North Korea without the use of force and without any specific threats.

Certainly, it is difficult. Mr Solana has just recently met the Iranian representative. The dialogue continues. We want it to go further. As you could see we work together with all the members of the Security Council and look for the ways acceptable for all the members of the Security Council. We feel highly responsible for that.

The Times: Do you agree with President Bush that Iran's possession of nuclear power is unacceptable?

V.P.: I do agree.

Figaro: I would like to comment on your statement on Kosovo. I do not see any chance for compromise. Explain to me what sort of compromise is possible? The country is independent or is not. Where do you see the chance for a compromise.

V.P.: If only I knew it I would have already proposed it. One has to look for it. It is difficult and complicated task. I do not know, as far. However, Serbia and Montenegro have managed to find a compromise for some time, haven't they? Everybody agreed with it. That's an example only. Do you realise that self-determination implementation will trigger negative processes not on the post-Soviet space only? What will we face here in Russia? It will be difficult to explain the small nations in the Northern Caucasus why some nation in Europe got such a right and they did not for some reason. One part of Ossetians lives in Russia and other one lives in Georgia and consider themselves an independent state. How could we explain the Ossetians why they are second-class people in Europe? Why do the Albanians have right to behave in such manner and the Ossetians do not? It is impossible to explain.

Such a solution will ignite the separatist movements in Europe itself. As far as I know Scotland wants to hold a referendum on the independence in three years. There are same movements in Catalonia and in the Basque provinces. Let us take the Balkans: Serbian republic would like to join Serbia. There are another problems in Southern Europe. I do not even want to indicate them in order not to provoke. You could talk to the experts if you like. What's the reason to provoke? It is very bad and dangerous. One could follow the path of the people who cannot wait, who are short of time for something. We cannot agree with that.

Figaro: One more question on the economy, on Russia willing to participate in the European companies, for instance in EADS. What does it need that for? What would you tell to those people who are slightly afraid of the goals Russia fulfils entering the capital of the European companies?

V.P.: Why are they afraid if Russian companies come with investments that the economies of some European countries badly need? They should be happy and thank them. Our companies follow market rules, they have no intentions to take something – they invest, create jobs, stimulate economic growth. As for EADS it experiences certain problems. If we make a deal on Russian investment it could save jobs in Airbus, for instance. What are they afraid of? I see no threats but addition of potentials and capabilities. Moreover, we have something to offer in aviation. We have our own problems and are establishing big holding company but still have interesting projects to offer. For instance, Be-200 fire-fighting plane which has no competitors in the world. There is simply no such plane. Simultaneously we know a scale or recent forest fires in Europe. Such a plane could be used to fight the fires.

Russian plane makers could take some segment of the market but the industry as whole will only benefit in Europe. No doubt.

There is a tough competition. There is a monopolisation with two or three main players competing each other. They are from the U.S. and Europe. If the Europeans do not want us, we will look for other partners. We will co-operate with someone in certain segments. We have a bureau of Boeing in Moscow which was very much engaged in making last model of this company. We have some mutual business to make. I repeat this work could be fruitful and increase competitiveness.

As for other investments, say in energy if Gazprom or any other our energy company enters European distribution networks it will be deeply interested in stable gas deliveries. What's wrong with that? There the advantages for everyone only.

We made an agreement with the German partners to build the NordStream pipeline. Some people consider it to avoid certain countries. That's wrong. This is an additional route to deliver energy in Europe. We do not stop anything and do not cut anything. We are building another route. We divided shares of the consortium with the Germans as 49 to 51. They let us to their networks and we let them to the extraction in Russia. Thus German consumers have assurances linked to the extraction as for the volumes, quality of the work and for the future deliveries. It strengthens energy security in Europe and confidence of the market players that it will work like a clock.

We are interested in co-operation in hi-tech. We see COCOM lists which were in force in the part but then were cancelled but somehow still acting as limitations for world economy, harmful limitations having nothing in common with present international relations. It is a rudiment of the past and should be cancelled. If you businessmen bought 25-30% of one of the biggest Austrian construction companies they take it to our market. One of the mutual projects will last 14 years and cost $US25 BLN. Is it good or bad for that company