Europe needs new Energy Charter – Medvedev

Europe needs a new Energy Charter focused not only on consumers but also on producers and transit countries as well, says Dmitry Medvedev in his interview with Spanish journalists from channel TVE and newspaper El Pais.

The Spanish journalists interviewing Medvedev are: Chief Correspondent of the Moscow bureau of public service channel Television Espanola (TVE) Jose-Carlos Gallardo-Korulon; Director of the international editorial staff of ‘El Pais’ Luis Prados-De-Escosura; and Moscow Correspondent for ‘El Pais’ Maria-Pilar Bonet-Cardona.

Q: Mr. Medvedev, His Majesty King Juan Carlos was the first one to come here in 2008 to congratulate you here in Moscow as Russia’s new president, and that visit was interpreted as a demonstration of good relations between our two countries. At what stage, in your opinion, are these relations today?

A: Thank you. I think they are at an excellent stage, at the stage when we can find a solution to almost any problem we can discuss it with our Spanish counterparts. We find solutions to the most difficult problems, the most difficult issues that our countries are facing – both in the bilateral and multilateral format, including the issues of European security and overcoming the consequences of the global financial crisis.

That’s why it is with much optimism and great pleasure that I am looking forward to my visit to Spain. Our people very much appreciate the attitude King Juan Carlos I of Spain has towards our country, and respect him as a well-known and experienced statesman and a leader of a friendly nation. We know that both he and Queen Sofía are very interested in Russian culture and history, as evidenced by many examples. That is why my very first contact with His Majesty, which took place last year – and indeed, this was almost immediately after I came into office – gave me an impression that we would be able to find common language on many diverse issues.

His Majesty and I even attended a photography exhibition together. I knew he was interested in this subject, and I was also somewhat interested, and we were able not only to discuss bilateral relations, but also to talk about the world of photography, about art, as well. This paves the way for discussing many different issues: both at the head-of-state level and at the government level. In short, at almost any level we have a very good foundation for advancing our relations further.

And I believe this is particularly valuable today, when the entire world faces financial difficulties, when some old mechanisms no longer work, when we all face the problem of shortage of finances for implementing various major projects, when we have to deal with urgent social problems, when some people cannot find a job, and their number is growing, when we have to respond to global challenges, including those that have to do with the existing system of financial ties, the financial architecture.

Very soon there will be a meeting in London, which should provide conditions for addressing these major problems – speaking of which, we very much expect to mutually coordinate our efforts with our Spanish partners – let alone the problems which are traditional for our countries: those of maintaining European security. The dialogue with respect to this subject is a multilateral one.

I have presented my views on many occasions, and I think we will visit this subject again with you today. I don’t think that those institutions which provide security in Europe today are sufficient. We need to create the framework for a new security system which will include, with all due respect, not only those blocs that exist today, but also non-bloc entities. Of course, it’s good that we have some forums today where we can meet and discuss these things, but this does not mean that this situation is set in stone.

The reason I mention this is because with our Spanish partners we don’t have any difficulty finding common solutions to the most challenging problems of today. That’s why it is with great joy and optimism that I am looking forward to the meeting I’ll have in Spain, to the state visit, which, by the way, will include the signing of the Declaration of Strategic Cooperation between our countries.

Q: Mr. President, in 2008 you proposed to design an international treaty to create a new security architecture. I’d like to ask: does Mikhail Gorbachev’s idea about setting up a common European home from Vancouver to Vladivostok have anything to do with it? And what do you think about the US project to deploy a missile defense system in Europe?

A: Usually, every new idea only seems to be new. In reality, there is always some background. In fact, various people have been speaking about a common European home from the Atlantic to the Urals long before Mikhail Gorbachev. Charles de Gaulle spoke about this. I am sure that somebody spoke about this too even before Charles de Gaulle. This indicates that good ideas always find favour with politicians, who then present them.

My proposal, of course, is a modified version of what has been proposed earlier, but what I did is I adopted it to contemporary conditions. Today, the confrontation between NATO and the Warsaw Pact is over. We no longer have a situation where two blocs co-exist in Europe. There is no iron curtain any more. The Cold War, thank God, is over. That’s why the idea cannot remain unchanged. But I think it is still relevant, because the existing security system in Europe is less than perfect, as I have just said. The reason I say it is less than perfect is because there are countries which, strictly speaking, do not belong to any bloc or alliance, and their security is not ensured at the bloc level. This will always create tension. This will always give them an impression that they don’t get absolutely fair treatment and will simply generate problems in dealing with other countries.

I think that the way to solve this problem is to create an organization which would unite all European countries regardless of which organizations they are part of – be it NATO, the CIS (the Commonwealth of Independent States), the Collective Security Treaty Organization, or the European Union. All these organizations are like sets in maths, and none of these sets fully covers any of the other sets. This means that it is necessary to have a universal field.

You could object that there is the OSCE. The problem with the OSCE is that in the last few years it has failed to realize its potential. To my mind, the OSCE is less effective today than it was during the Cold War, back at the time when it was not called an Organization, but when it was the Conference on Security and Cooperation in Europe and was accompanied by what is known as the Helsinki Accords. Thus, we are not opposed to discussing these issues in the OSCE format, but it seems to me that the framework of the new system should be somewhat different.

What can we do here? We could hold a summit in the OSCE format. I’ve already said this. I gather some of our partners in Europe, including our partners in Spain, like the idea. Some of our partners in Europe say they think it is unnecessary. Alright, let’s think what other mechanisms we could use. We could consider creating a forum of some sort where European countries that are not part of the EU could discuss things with the EU. This is another option.
We should just be creative and find an idea that will gather us together. I am absolutely confident that this is necessary, and, by the way, a number of dramatic events, including those that happened in 2008, have demonstrated how fragile peace is. I mean, among other things, what happened in August – the crisis in the Caucasus, Georgia’s aggression against little entities that used to be its constituents. Therefore, this problem is very, very urgent.

As for the missile defense project, my position is different. I am of the opinion that this idea in its original format is no longer relevant. Moreover, we are frustrated with it. We have an impression that this project is directed against Russia – at least in a roundabout way, if not directly. Naturally, Russia does not like this. This is totally obvious.

So, what can we do here? Nobody says threats do not exist – including threats that may involve acts of nuclear terrorism, threats from countries with unstable regimes. Let us address such threats together, not isolating each other from these processes. We have proposed this more than once to others, including our American partners. The position of the previous administration was very simple and, if you please, very dumb: “we are going to do this because that’s what we have decided to do.” I expect the new United States administration to take a more creative and more cooperative approach to this issue. And we do receive messages from our American counterparts to this effect. I expect these messages to evolve into concrete proposals. I hope that during my first meeting with the US president Barack Obama we are able to discuss this issue as well. This problem is extremely urgent for Europe.

Q: Could we go back to bilateral relations? The trade turnover has exceeded two billion euros, and we can do even better than that. We are very much interested in developing our cooperation. Last autumn, I think Lukoil wanted to buy into Repsol and some sectors in Spain, and we know what their response was. I’d like to ask if you think they don’t trust Russian partners enough and if there are stereotypes, and what should be the foundation for our relations.

A: Thank you. First of all, I’d like to say that the trade turnover we have, good as it is, is too low. This is true even under current crisis conditions. I believe countries with such potential as Russia and Spain definitely must have a much higher turnover. There are countries comparable with Spain in terms of their economic potential with which our turnover is measured in tens of billions of either dollars or euros. I think we are well able to bring our trade turnover up to a comparable level.

As for investment, this is always a two-way street. It is impossible to welcome investments, and at the same time pursue a different policy with respect to other economic players. This always causes tensions.

We are interested in Spanish investments coming to Russia. And, in turn, we want Russian companies to enter the Spanish market and invest their funds in various sectors there.
Furthermore, this may be a banality, but it is obvious that the more our countries invest in each other, the higher the security level in Europe will be, because governments may change, leaders may come and go, but if countries have a common business, they will never have a reason for conflicts – at least for serious conflicts. They will always be forced to talk and reach an agreement. Conversely, if there is no trade as the foundation, no joint projects, that’s when a lot of problems emerge.

As for the situation with Lukoil and the bid I think it made for Repsol shares, naturally, I won’t comment on the situation in detail, because at any rate this matter is between two private companies. Lukoil is a private company, and the Russian government has nothing to do with it; on the contrary, to a large degree it is controlled by foreign shareholders.

Anyway, I was told this was an interesting offer worth considering and maybe allowing one company to buy into another one. As far as I know, the stake in question was rather small; it was even less than what they call a blocking stake. In other words, such a stake does not seriously affect the decision-making process in a company; it only gives one an opportunity to enter a market and, so to say, demonstrate one’s capabilities, have a share in the capital stock, and so on.

From what I have heard from various sources, including our Spanish partners and our Spanish friends, this investment project was met with mixed reactions. Some like it, while others follow the logic and the stereotype of “Look, now even here the Russians are coming!” – like this threatens the country’s independence and so forth. I think such logic is harmful or foolish, whatever you prefer, because in this case we just say there are good investments and bad investments, good investors and bad investors. And this means we are building new Berlin walls; we are building economic walls. This even contradicts the idea of one Europe.

I don’t know what the outcome of this particular investment project will be. I think the two companies are still negotiating. I repeat, we are interested in being represented in the Spanish market. Spanish investors are interested in working in Russia. As for this particular deal, there is only one thing I can say: generally speaking, I believe countries like the Russian Federation and Spain must have their own energy cooperation track, their own energy cooperation benchmarks, because these are large countries which have energy potential of their own, which have their interests, and surely we should be able to find some energy projects which will be interesting to our countries, and this sphere is no exception.

Q: The US has just lost the Manas airbase in Kyrgyzstan, a key base for supplying NATO forces in their war on terror, and on Islamic terrorism in Afghanistan. Can Russia do something to compensate for this loss? And does it want to do it?

A: My answer to your question will come in two parts. The first part will be very short. The decision to shut down the Manas airbase in Kyrgyzstan is a sovereign decision of the Kyrgyz leadership. They have explained the reasons why they made this decision. As far as I know, they made it largely because the initial agreement to set up a base was concluded for two years. The base was there eight years. Apparently, this was not what they agreed to. But in any case, it is up to them, and they made this decision. It should be respected as any other decision made by a sovereign state in keeping with applicable laws.

Now, as far as our work in Afghanistan is concerned, I would like to say that we are not interested in stopping this work. On the contrary, we would like to step up these efforts, because we see how dangerous radical groups in Afghanistan, Pakistan and some other countries are. These groups pose a threat to whole of mankind and – to a large degree, or even primarily-to their own people.

Thus, we are ready to step up this cooperation in every aspect, including our cooperation with the United States. We have made some offers to the United States concerning the transit of non-military cargo. We have similar agreements with France and Germany. We have discussed these issues with Spain as well.

So, we think this work should go on, and I think we have a very good foundation for reaching an agreement here. I gather that the new US president has named this problem as one of the key priorities in US foreign policy. We share this view. Moreover, we are ready to take part in discussing Afghanistan’s domestic problems, and these discussions may include influential international organizations. Recently we had a summit of the Shanghai Cooperation Organization, and we agreed to call a conference on this subject. I think very soon, sometime this year, we may have a conference on Afghanistan under the auspices of the Shanghai Cooperation
Organization. The reason we are using the SCO format in this case is because most of the member-states border Afghanistan, and naturally they are interested in the settlement process in this country making as much progress as possible. Also, they want to see a feasible foundation for a normal political system in Afghanistan, one that the people of the country will trust, one that will be efficient and that won’t be weak and imposed from outside.

In short, we want to see a civilized and democratic state in Afghanistan.

Q: There was another gas war between Ukraine and Russia in January, right? And as Western observers say, Russia lost a lot of money. You yourself wrote about it, Gazprom did. Russia also lost some trust and damaged its reputation. I know for sure, because I heard it myself, even thought I can’t quote, because this was not out in the open, that high standing Russian officials were against this measure – to turn off the tap delivering gas to Ukraine. Next time when this problem occurs, what will you do in January, when you try to agree on the price again? Will you turn off the tap again or will you appeal to the International Court, the Arbitration Court of Stockholm, which deals with such cases? As a lawyer you know it very well.

A: First of all, we didn’t turn off the tap. We just found ourselves in a situation where Ukraine didn’t sign an agreement with us. We did not have any legal basis for continuing with the gas deliveries. That’s why we made these difficult decisions, we didn’t want to make them, and we would like to avoid them in the future. We had a long and difficult process of discussion with our Ukrainian partners, and in the end we came to an agreement which we signed on January 19. According to that agreement, gas is delivered to Ukraine now at market prices, and our Ukrainian partners are obligated to make timely payments. The next payment is around 400 million dollars, if I am not mistaken, and it needs to be made soon. If they fail to pay, the agreement’s provisions become active – Ukraine will have to switch to the pre-payment system for further deliveries. So at this point we do this on credit, so we trust them, but operate with market prices, so then it would be a pre-payment system. These will be the natural consequences if they don’t pay on time. Of course, we would not want to go back to the old scenario. It is definitely not our choice, but I can honestly tell you – if they refuse to pay, we will have to do something about it. Not too long ago my colleague Mr. Barroso came with many European commissioners. I told him a simple thing – if we want to secure everyone: European consumers and create a normal sense of co-operation in general, secure it – then let’s help the Ukrainians. They are really in a difficult situation. Some analysts say the economic situation in Ukraine is close to economic collapse. If we sense that they are not able to pay, then let’s create a financial pool and help them with money. I think this is a solution that will help everyone. There are a number of European financial institutions. We are ready to take part in that ourselves. We are ready to bring in some of our money in order to provide for a normal situation with deliveries. But let’s do it in a civilized way. We proposed a consortium idea, which would buy some gas. The idea is not dead. But we have not reached the deadline yet, and I think our Ukrainian partners are capable of settling all these issues. As far as the specific Russian officials that you talked about, the ones who are against this strategy, tell me, and I will fire them.

Q: I can’t tell you, because I won’t break the off-the-record rule. This was a public post in a closed forum.

A: I see.

Q: Yes.

A: I see.

Q: In Barcelona. The city of Barcelona.

A: I understand.

Q: The recent gas crisis, the gas crisis as well as the war with Georgia and the situation with human rights in Russia, these are the issues that have always threatened and are still threatening Russia’s talks with the EU about the new partnership agreement. How do you view your relations with the European Union, if you say that the EU is a strategic partner that Russia needs?

A: You know I think that these were difficult events, one of them is simply dramatic – the Caucasus crisis in August, our neighbour’s aggression – and the gas problem, of course they create certain tension, and tension in Europe. We cannot deny that. But at the same time we come from the point that all European countries are interested in good relations with the Russian Federation, as well as that the Russian Federation is interested in good partnership relations with the European Union and specific countries in Europe. These relations are not opportunistic and should not depend on any political events. And we definitely should not look at the signing of the partnership agreement with Europe, with the European Union as some kind of prize that Russia gets for its good behavior, all parties are interested in such an agreement. We have an agreement now. And even though it has expired, in general it is still applied. So there is definitely a need for a new agreement. And in my opinion it should be a general document, accompanied by a number of various agreements on different issues. But I will say again, it is not a way of stimulating Russia. It is a document that we all need. This should be our assumption. And this document should serve as a basis for many other agreements.

We have mentioned the gas crisis several times today. As a lawyer, I don’t have any legal illusions, nevertheless, I think that a there should be a solid legal basis for settling such issues. What do we have now in this area for example? We have an agreement with our Ukrainian friends, and the Ukrainian partners break it from time to time. And there is the Energy Charter, ratified by a number of countries, and signed, but not ratified by some, like the Russian Federation for example, some countries didn’t sign it at all. It means that the issue has not been shaped legally. In relation to that, I have come up with an idea, which I first voiced at the Moscow summit during this gas conflict – let’s draw up a new Energy Charter or a new version of the Energy Charter. But what should it be like? It should not benefit just the consumers. Yes, a consumer is a vulnerable party. But sometimes we need to think about the producers as well, and the transit countries. Otherwise we cannot come to an agreement. But the Charter that we have today mostly considers the consumer. I gave an order, and our government along with our largest companies are working on a proposal for the new Energy Charter. As I promised, I will definitely bring it and give it to partners probably in London, maybe in Italy, but hopefully in London, and I think it will be Russia’s contribution, Russia’s additional contribution to European energy security.

Q: We have talked about these two issues – gas conflict and the war with Georgia. Not the human rights issue. I think certain elements of this issue could be questioned. There have been concerns, concerns about these issues.

A: Who voiced these concerns and about what events? Because if you mean specific issues, let’s talk about them.

Q: I am talking about the international community, and also the government, police. As far as particular situations. There are several specific examples: Anna Politkovskaya’s case, for example.

A: You are talking about problems inside the country, in Russia? Because there are plenty of such cases in Europe. But you are talking about Russian problems. I see. Well, you know…

Q: Yes, yes.

A: Well, this is the area in which every country will find something they don’t like about their partners. I don’t support the idea of turning this discussion into an argument, attempts to find faults of our European partners, for example, even though in every country you can find something to hold against it and discuss how well they follow the basics of human rights, and this includes the most developed both socially and economically countries. We are not a perfect state. We also have many different problems, including those in the human rights area. The most important thing is not to pretend that they don’t exist, but to stay consistent in fighting such cases. I think that Russia has gone a long way in the past 18 years, because even several decades ago this issue would have been considered nonsense. What human rights could you talk about in the Soviet Union? Well, actually, Spain remembers a similar time quite well. And it was also not too long ago. But now the situation is different.

We have a Constitution that functions fairly well, basic human and civil rights and freedoms are guaranteed by it. And as a lawyer, not as a head of a state, I am pretty impressed with what has been done in recent years. But it does not mean that there are no problems. I think that there are enough problems. But unfortunately we still fail at some basic rights. I am talking about protection of people from criminal offences, from invasions into their private life, protection of property.
Unfortunately, in this respect things are not good traditionally, and the atmosphere in general is very difficult crime wise. Social institutions are not efficient, and actions of the state, including police, raise many questions. Just yesterday I was at the Prosecutor General Board meeting, where we talked about crime. But I can honestly say to all our Spanish friends, last year we had over 2000 cases of homicide, which have not been solved. The statistic is very sad. We need to do everything to make sure that such crimes are at least solved. And on the large scale – to prevent these crimes, even though it is hard, especially during the crisis, problems become bigger. It is a topic for a separate talk. The most important thing is not to turn a blind eye to the problem. Yesterday we also discussed the issue of jury, jury in court. It is a new establishment, or rather a well forgotten old establishment. It used to exist in the Russian Empire, though in a somewhat different form. Not too long ago, during the hearing on the Politkovskaya case, the jury pronounced the defenders not guilty.

As the head of the state, I will not evaluate the court’s decision, because it is the court, but I can tell you one thing, which I also told the Prosecutor General Board yesterday. I don’t know if you heard or not. I said that our police, investigators need to learn how to work in a system that includes the jury institution. It is a rather complicated process. Just remember movies focusing on this problem. It is a separate topic. Evidentiary support has to be very convincing, well prepared. The State Prosecutor’s actions in the process must be outstanding and also convincing. Therefore it’s a primary objective for the state to improve such institutions, but civil society should not stay on the sidelines either, because all these problems are quite obvious, and I think that all non-governmental structures should help the state in this area. They should reveal the most difficult cases, propose legislative measures that could be taken. In this sense we have a constructive dialogue with a number of non-governmental organizations. We are in constant talks, at times heated discussions. I meet with them myself. By the way, one such meeting is planned for the near future. I am sure we will hear some things that are very unpleasant for the state. The most important thing is to be open, not to cover our ears, but to hear them out and try to react. In this case we will have a modern developed society. That’s it.

Q: Do you think that the depth of the economic crisis in the world and the depth of the crisis in Russia and other countries will put at jeopardy the social agreement which was active during Vladimir Putin’s presidency? In recent years the country has been restored, your political influence and reputation have been improving, on the one hand. On the other hand, the living standards have been getting higher. But could the fact that oil prices have gone down destabilize this social agreement, the social pact?

A: You know, of course, any crisis always created problems for the state, creates problems for regular people and naturally created tension in society. And if we say otherwise, we would be telling lies. People’s mood does not change for the best in a crisis, and of course I understand them. But to say that these changes could dramatically alter the situation in the country – I think it is impossible for several reasons. First, today’s Russia, the economic system of Russia, the social system of Russia today, is quite different from the system that we had 10-15 years ago. 15 years ago Russia was weak economically. It could not compete with the leading countries. A significant part of its economy was lost. In recent years we were able to change this situation. Therefore the current economic crisis will not hit social stability that hard, in my opinion. But of course, we need to make sure that living standards in our country, the quality of life of our average people stays on a normal level, that the quality of life would not be lower than a certain mark. In any case, we should not let the living standards in the country go back to what they were back in the 90s, when a significant part of our population was simply very poor. Now the situation is significantly better. And this is the main objective of the state, the main objective of the government. All our major decisions are about it, even when we accept a new budget and have to make cuts, as they say now – certain parts of the budget, mostly investment projects, we are trying to avoid changing social standards. So this social pact that you are talking about, meaning normal understanding between the power on one side and citizens on the other, this is a great achievement of the previous period and we have to do everything in order to maintain social peace and wellbeing in the country. I think we have everything we need for that.

Q: Is it true that Russia has changed drastically in the last 15 years? But there is one subject that you find very significant. I am talking about corruption, which existed then and exists still. Yesterday I was at a meeting of Russian businessmen, politicians and analysts. And they said that the tax service has some kind of plan, I will not quote the specific accusations. But it is obviously a problem, and this is a growing problem, and you know it, you worked on a law draft, right? What makes you think that this draft will be better than many other previous drafts? There have been many commissions and committees that fought against corruption. Why now, in the current crisis, you can if not win then move forward in overcoming this evil, which is not only limited to Russia, of course, everyone knows that.

A: There are two possible patterns in this situation. We could relax and admit our defeat, say – you know, we have been fighting this for centuries in Russia and we will never prevail. Or we could try to do something. I chose the latter. And when I was making this decision to work on fighting corruption, I heard different things. Some said – why are you doing this, you will not be able to achieve anything in a year, in two years, people will still take bribes, there will still be problems, illegal deals of all sorts. And that is true. And it probably will be this way. But when we act, do something, we let society know that we are working on this anyway, that we are still trying to narrow down this space, that we still grab someone by the hand, we still show that in a number of cases there will be a punishment, sooner or later people will have to answer for what they did. And this creates a slightly different atmosphere, even now we are talking that there is a way on corruption, and everybody says – yes, it is happening, but not very enthusiastically, there are problems here and there. But it would have been worse if nothing happened at all.

Therefore I think that society has to always answer for these things. And the state has to make a decision. As far as the laws go, I don’t have any illusions here either. The legislative documents that we accepted, will only work to a certain extent, but still I can honestly tell you that the laws that we have been waiting for in the past 10-12 years, because the very concept of corruption has not been present in the legislation until recently, and only the latest laws created the legal basis for it. These laws introduced a number of new institutions, very peculiar and previously unfamiliar to our country. So now we press corruption charges not just against officials, but also companies – legal entities, if there is proof. We encourage state employees to behave properly, declare all their income, in order to prevent the so called conflict of interests. And if a state employee has such a conflict, this employee must state this publicly and openly, then he gets a chance to settle this conflict legally. If he doesn’t do it, he commits an act of corruption. So this is an internal motivation for them not to do such things. There are many other important norms, including, actually, the issue of declaring income by the official’s family members. We talked about it a lot, but this didn’t take place. Next year will be the first year for the state employees’ family members to declare their incomes. It is also very important. Most likely, it won’t work in a number of cases. We can imagine a simple scenario when part of the income or some property will be made into names of some distant relatives, but at least this will not agree with the law. So I think that any actions that help prevent corruption, any specific rules in this area already have a good potential. It is like the state saying this is a priority.

Q: I see, but as far as the anti-crisis measures go, yesterday for example, the interest rate was announced at which banks got credit. But not too long ago I was in Nizhni Tagil, and they complain that the money doesn’t reach them. The anti-crisis money.

A: But it’s rather not the issue of corruption. Unfortunately, it’s the issue of our economic situation, because differently from a number of European countries where there are signs of deflation, we have very high inflation, and despite the termination of several industries, the inflation rate is high, and because of this credit rate is even higher. And many enterprises just have no possibility of taking credit for which 18-20 per cent interest must be paid a year. But there are no such rates in Europe. And it’s a big problem today. This is true. And here there’s no unique recipe of what to do. In some cases we need to just compensate part of this credit rate, to subsidise it from the state. It’s evident that we cannot do this for all enterprises. We can do this only for systemically important enterprises. By the way, you’ve mentioned a tax inspectorate, a plan for collecting taxes.

There’s nothing rebellious in this. A tax inspectorate is to collect definite state profits if it does it in a legal way, it is to provide a profitable base for a state, if it doesn’t break the rules. Of course, paying taxes is an unpleasant event for any entrepreneur.

Q: But they complained saying they would come to our country. They are small businessmen. Their turnover is 60 thousand but they say that their plan is one million, and they need to do whatever they can to produce this money. How should this be understood?

A: Well, it may be understood differently, but if this payment doesn’t result from a law, there’s only one answer – it’s necessary to write an application to the Prosecutor’s office, that’s it. But if they do have to make these payments, then nothing else can be done.

Q: But you know how inspectors and auditors are used, don’t you?

A: That’s true. It happens sometimes. They really love to pay visits looking for some flaws. More often it arises from a desire to make a career, sometimes they want to get a bribe. Of course, we must do something about it.

Q: At that meeting where Mikhail Gorbachev was also present, it was said that at present there are people who under the cover of anti-crisis measures want to make money. It was the main topic of the meeting.

A: I believe this is a legitimate question and I, by the way, spoke about this in the course of three general meetings of law-enforcement agencies: at the general meeting of the Federal security service in our country, I spoke, at the general meeting of the Interior Ministry and yesterday I spoke in the General Prosecutor’s office saying that those who try to make a profit out of crisis, are worthy of special responsibility for such doings, because this is as it were a crime, which today has heightened public danger not because they are directed against a concrete company, but they are, in fact, able to disorganize the work of a whole group of companies and hit the pockets of a vast number of people.

Q: You’re a nice person as a personality

A: Thank you.

Q: Well, but why are you so afraid of people? Why is a radical opposition always banned from holding rallies? I don’t speak about Communists who are allowed to organize rallies. Actually, rallies and protests are authorized upon request, while Kasparov and ‘Another Russia’s’ requests are always denied. What do you fear?

A: You know, I certainly don’t follow the activity of a radical opposition as much as you do. In my view, this is a small group of marginal politicians who are always present in any other country and is interested in boosting attention for itself. But judging from what I see, and I see much, sometimes I even visit the Internet sites of this radical opposition. Thus, whatever they want to yell, they do in different places. They take to the streets and shout that the President and Government must be dismissed. It means they make all the statements they want to make. So, I imagine nobody jumps down their throats. They say whatever they want. They speak in public. And they are not deprived of this opportunity. But if they don’t speak on Red Square, forgive me, but I reckon it’s not their place to be. They can request a rally wherever they like, including the Kremlin, but they should appear where it’s allowed, where these kind of rallies are usually held.

Q: But in reality they were even detained in a restaurant.

A: Well, if there were some violations, they need to be investigated, but, to my mind, they say whatever they want with the straightforwardness of a working man.

Q: I’d like to ask a global question. We spoke about a global crisis. Russia offers new mechanisms of financial control. What can Russia contribute to the restructuring of the existing system?

A: I think it can contribute approximately the same as other countries contribute. The thing is that every state should put income into a global system of financial security. When there was a summit in Washington we managed to create a declaration which was supported by all participants, though they were all very different.

And this declaration contains the outlines of a new financial system. I believe we’ve now arrived at that point where we can create a new fairer financial system not because the former one was vicious, but it's just become out of date. And this crisis, when the bubbles, produced by some economies, first of all in America, popped, we had these problems as well, and the European states. This is a sign telling us that we need to create a new system. That’s why we agreed that the result of the next round of our work in London should be a commission to develop international conventions on the topic, so we need to start work on the new Bretton Woods system, relatively speaking. That is why we are in this phase now. Not too long ago I had phone conversations with some of my European colleagues and the nearest future – today or tomorrow – I am planning to send them Russian proposals. Of course, I will send them to all the participants of the Washington summit, including the Prime Minister of Spain. And I hope that all these proposals, as well as other proposals, will be considered. We consider proposals from all our partners. In the end, our objective at the moment is to figure out what the new configuration will look like. And that is the most important thing. For now I can say that we I think we are moving very slowly. And the development of the crisis is not letting us act this way, because we have not hit the bottom yet, we are still falling and we don’t know how far we still have to go. At this point it is very important to get some convention of agreed on pillars, which will allow us to pass this crisis in the best possible way. We could agree on a risk verification system, on how large corporations work, agree on insurance, on control over macro economic data in the leading European countries and countries of the world, in other countries. So, in other words, we would agree that this new system would become more modern. If we can do it, we will at least soften the consequences of the world financial crisis. I personally hope that our work in London will be solid and constructive.

Q: Clarification on Afghanistan, when you mentioned the SCO

A: SCO, right?

Q: Do you mean that the SCO will invite NATO to discuss Afghanistan, right?

A: I think the SCO could easily invite the leaders of the North Atlantic Alliance to discuss this issue. The SCO has its own format.

Q: Right.

A: Because the Shanghai Organization for Cooperation includes the states that basically border with Afghanistan. No one else suffers more than the SCO countries from the radical activity there. It is Tajikistan, Kyrgyzstan and the Russian Federation. This whole dirty flow of drugs and terrorists pours into our territory in the first place. That’s why we ourselves will discuss these questions, but I think we will take into consideration the operation that is conducted there, that’s why there will need to be representatives of other structures there.

Q: Many blame the US for the world financial crisis which started in the summer of last year, saying that the crisis shows that the system in the US doesn’t work. Russia supports the multi-polar approach. Many Latin American countries support this idea. For example, the leaders of Venezuela, Nicaragua, and Bolivia who came to Russia not too long ago. Barack Obama has also expressed this idea. Do you think Russia and the US will find common ground on other ideas as well?

A: I certainly hope so. I really hope that this would be to the best interest of the United States of America, the Russian Federation and the whole world. It is no use blaming someone now, even though the roots of the crisis are well known. The most important thing now is to look into the future and create a system that will protect us from such crises, or at least try to soften the consequences. The world economy will always develop in cycles. No one will be able to change those laws. The question is – what will happen at climax points – the highest and lowest ones? It is one thing when it is something more or less predictable. And another thing when you have a crisis like the Great Depression in America, or the current crisis. We need to create a shield from that. We are ready for that.

Q: Don’t you think you need more democracy for that, because…

A: Where?

Q: In Russia, because…

A: You think that in order to overcome the world financial crisis, we need to solve Russia’s internal problems?

Q: No, I am just continuing his question, because we didn’t quite understand the answer.

A: What in particular?

Q: Society denied some freedoms, civil freedoms in Putin’s time and in your time as well. A party only needed 10,000 people before, now it is 50,000, and then when the number is lowered to 45,000 and 40,000 it is presented as democratization, but we have not even returned to the initial point, right? Are you going to solve this crisis with less democratization or more democratization?

A: I will tell you this. If we are talking about solving the crisis, I am not even sure that going through the crisis is in any way connected with the level of democracy. The problem is different. The problem is that normal economic mechanisms are absent, the ones that allow most of the countries to go through this crisis without losses. Of course, it is best if the state has all the democratic institutions, which allow it to make the right decisions and so forth. But if we are talking about overcoming the crisis, let’s remember what was happening in the United States of America in the 30s, and in some other countries experiencing the crisis. I don’t think these were the best democracies at the time. Quite the opposite actually. In a number of cases the state had to crack down on everyone in order to overcome the crisis. I am not saying we will do this in Russia. On the contrary. It is just that I am trying to say that overcoming the crisis and development of democratic institutions are different things. And we should not confuse them.

A: Thank you.