President Dmitry Medvedev talks to the Wall Street Journal

The transcript of Dmitry Medvedev’s interview with the Wall Street Journal.

WSJ: Mr. President, thank you for finding the time for us. You're going to visit the USA; what are your goals for this visit? Second, what do you think has changed in your relations with the new U.S. President?

Dmitry Medvedev: My goals for the visit to the USA? I would like to continue our communication with President Obama. I would like to fixate the positive trends that have formed in Russian-American dialogue. It is no secret that, a few years ago, it degraded to a very low level, almost right down to Cold War status. That was very sad to see and, I think, bad for both the Russian and American people. We have managed to restore full-scale communication recently and achieved a whole number of quite tangible results. Take our synchronised work on international issues such as the signing of the START-3 Treaty, our projects we are trying to implement now, and a multitude of other areas where we understand each other better now.

This is why I would like to continue communication with my counterpart, with whom I have good relations. I have always said that relations among presidents are crucial to good relations among states. But still, good relations alone are not enough. As well as good personal relations, it also takes political will, support from other authorities, support from the public and support from the business community to get everything right.

Anyway, I think this visit is going to be interesting. I'm going to visit Silicon Valley for the first time. This is very interesting for me personally. But on the other hand, I'm looking forward to seeing the achievements and companies based in the Valley that are the quintessence of the scientific and engineering prowess of the United States, absorbing the best brains that come to the USA from other countries, Russia being among them. As we know, there are very many Russian citizens and expatriates there.

My goal is simple yet complicated at the same time. I want to see how things work in Silicon Valley. We would like to create something similar in the Russian Federation – adjusted to suit our views, of course. There is a project named Skolkovo that has already been prepared and received the go-ahead. We want to build a separate innovation city, not far from Moscow, to attract private investment – both Russian and international. This is why the experience of Silicon Valley looks so interesting to me. There are other interesting meetings on the agenda, including a speech at a university, and other events that I expect to be very interesting. I’ve never been to San-Francisco or California before, so this alone is enough to make the trip memorable.

Besides this, there is a more formal element to the trip; the negotiations with my counterpart in Washington. Washington is far more familiar to me. Washington is a typical capital, yet that doesn't change the essence of our discussions and negotiations. While I hope we will be able to cover the entire Russian-American agenda, I personally would like to dwell on a few specific issues, and I have already mentioned that to Barack Obama. Those things are: economic cooperation between Russia and the United States, because we have increased our contact over the security sphere, but haven’t improved our economic ties much. That doesn’t mean, however, that there are no economic ties at all: there are investments, and our trade turnover measures tens of billions of dollars, yet still this is not the level that befits countries like Russia and America. This is what I hope to talk about.

There are a number of long-standing issues such our joining the WTO. Our Americans partners have promised their support on the matter. I don’t know how things are going to work out, but I want to discuss it with my American colleague and make all effort so that Russia's joining the WTO can finally take place. As the saying goes, the ball is America’s court now.  That's it, briefly.

WSJ: Mr. President, what exactly can the American government do during this visit to accelerate Russia's accession to the WTO?

DM: Well, what can be done and what should be done? We need to agree on a few rather small, yet still outstanding, matters of discussion that our colleagues are now working on: the Government of the Russian Federation, our trade representative, and other officials from the United States of America. I think disagreements are minimal; I think most of them are pure matters of taste or related to the way the USA raises its economic interests. I think we should step over this threshold, because Russia's accession to the WTO is beneficial not only to Russia (for which it is a test to a certain extent), but to the entire WTO and other countries, because we want to act by the same rules.

Sometimes, we are being reproached for doing something wrong or for supporting an industry or branches of industry, which we are not supposed to subsidise under these circumstances because such preferences cannot be applied at this moment. In short, this is a constant subject for debate. But this discussion will end automatically as soon as Russia joins the WTO. They’ve been leading us up the garden path for a quite a long period of time, much longer than some other major economies. Moreover, some countries that are already WTO members can hardly even be called market economies, and yet they are in. But Russia is out. That is why I repeat once again: I hope the incumbent U.S. administration will live up to the promises it once gave to me.

WSJ: Mr. President, today most countries in Western Europe are hit by the financial crisis. You are closely watching the process. Do you think the crisis is in its initial, medium or final stage?

DM: It would be better if you asked me how it’s going to develop: according to the letter ‘V’, or ‘W’ or ‘L’ scenarios. Naturally, I would not like it to unfold according to the ‘L’ scenario, and still less according to the ‘W’ or ‘triple-V’ scenarios. But in fact, if we follow the events closely, I think that we are in a stage of getting out of the crisis. So, it’s high time we start working on what is called an ‘exit strategy’.

Another question is how well our economies are prepared for it. Some can be more prepared than others. I know that many countries, including the United States, continue insisting that they should keep stimulating their own economy. But I think that a discussion of the exit strategy should go full steam ahead because otherwise we will only heat-up appetite but won’t reach the final result. That is why I think that we are somewhere at this stage. I can prove it with a number of economic indicators. Almost everywhere, all countries and all major economies have seen slight growth. It can be quite small like 0.5% or 1% or considerable like in some fast-developing economies and markets such as China or India, for example. Russia has a moderate growth of about 4% which is fairly good. If we manage to sustain this growth, I think it would be a good indicator. That is why we should start thinking of our exit strategy. Naturally, some stimulation measures should be preserved, we cannot set things loose overnight. Let me remind you that last year we poured in about 200 billion dollars to support our own economy. It’s big money, indeed. That helped us to solve a number of problems such as to keep major enterprises working, to provide them with orders and to ensure their smooth transition into the next year. But this cannot go on infinitely. Today, the conditions are slightly different, everything is changing. Therefore, I hope that we are at this stage now.

WSJ: Mr. President, do you think that some European countries have drawn a tough lesson in terms of how to balance state budgets? Which point of view do you like more: a German one or a French one?

DM: A while ago, I was on a visit to Germany, and we spent hours discussing this subject with my colleague, Chancellor Merkel. The entire conversation pivoted around the question: "What do you want – stability or solidarity?" This is the watershed in the positions of a number of EU countries. All comparisons here look rather primitive. Evidently, the position of solidarity is most-favoured by left-minded people, while the position of stability usually appeals to "rightists".

I think that the position to advocate is a pragmatic one. Of course, it is hard for me to give advice to the European Union; they don’t need my advice because they can get through on their own, I hope, but, in any case, you need to find a happy medium.
You can’t destabilise economies; you can’t extend aid blindly in a situation where all has been lost anyway. You have to be sober in your reasoning.

Yet, on the other hand, you should take some reasonable measures to support a number of weak economies in order to save the general idea. And the general idea is the common European market and the common supranational European currency, the euro. So, in this case, it is necessary to take some measures.

By the way, they did take such measures, because their decision to provide almost a trillion euros means that they have decided in favour of common stability on the European continent.

So, I think you shouldn’t contrast these things. Yet, indefinite solidarity and ineffective aid is, of course, a dangerous strategy. Eventually, it can undermine anything, even the European Union. Then even those countries that are not in danger today may face problem with solvency later. So, what you need is a happy medium.

I hope I will be able to discuss the matter with my other colleague, Nicolas Sarkozy, who is coming to the St. Petersburg Economic Forum. I have talked to Chancellor Merkel already; now I'm going to talk to him.

WSJ: Mr. President, if the crisis keeps spreading and, for example, Spain and Portugal encounter problems, will Russia offer international financial help to ensure stability in Europe?

DM: Yes, you know, we are very interested in stability in Europe. Firstly, because Russia is a European country. We are not EU members, but we are a European country.

Second, our international reserves are kept in several baskets: dollars, euros, sterling pounds, some other currencies such as the Swiss franc, and, of course, gold and equities. Therefore, the situation on the European continent ultimately influences our wellbeing too. That's why we are keeping a very close eye on the situation. During my last conversation on this matter with Angela Merkel – and it was a rather long conversation – I told her we hope very much that their efforts to support the euro and the economy will bring results. We have separate relations with all countries, including those that are in a difficult situation now, such as Greece, Spain and Portugal. Sure enough, we will take that into account in our contacts, but I think that the majority of support measures should be taken by the European Union, and it has already made the relevant decisions.

What is most important now, I think, is that they complete this task and not give up halfway through. Otherwise, as I said, a centrifugal process may begin, which will give an advantage to those in favour of abolishing the single currency and abolishing the unified market. In my opinion, that would be a step back.

WSJ: Are you seriously afraid that the single currency may collapse?

DM: Not yet, although we shouldn’t rule out this danger, at least because we are looking at a unique situation. Recently, we had the Russia-EU summit that takes place twice a year. You may know that there is now also a similar summit between America and the EU. We discussed the situation at our summit, and it looks unique indeed.

Today in Europe, there are states with weak economies and strong currencies, which has never happened before in the history of mankind or in world economic history, because that currency is supranational. Yet even that currency is ultimately determined by the economic power of separate states, some of which are the weak links now.

The question is how to unite all of them “in a marital union” and how it’s going to work in a relatively long-term and even mid-term perspective. This is exactly why this question is the subject of heated debates. That is why some countries have seen a revival of the so-called “national currency parties”, like the party of the German mark in Germany or the party the French franc in France. Indeed, it’s posing a rather serious threat to the European Union as a common market and as a union of European states. That is why I am not exaggerating the threat, but it shouldn’t be underestimated either. And what do you think?

WSJ: So far, I am going to agree with you. This threat is real. Governments should fulfill the measures they announce. And if we should see that they are not sticking to their commitments, then the crisis is going to increase and we will have to solve it with much fewer resources. That is why I asked you whether Russia may render assistance if it really becomes a “contagious phenomenon”?

DM: I will speak about Russia’s support separately. We have our internal tasks, which we should solve. We’ve got quite a few domestic problems. Our economy has not recovered from the crisis yet. But there are several projects on which we are really working with countries with weakened economies. And if we consider it through the prism of our relations in this sphere, in such projects, then I will probably say yes. But if direct financial infusions are in question, then it would be more preferable that they come from the EU partners.

There’s another complicated problem here: how to force weakening economies to introduce austerity. This, exactly, is a conflict between stability and solidarity because it’s extremely difficult to follow recommendations, even the smartest of them, coming from other countries or the European Commission, especially when thousands of people are demonstrating in the streets, demanding that the parliament be disbanded and the government deposed for failure to cope with the threats that have arisen. That is why the success of a common policy of fighting a crisis that emerged some time ago in the European Union’s economy will depend on how consistently the governments of countries with weakened economies will implement these economic measures. The situation is, indeed, alarming because it certainly can be perceived as a second wave of the crisis that erupted in late 2008. This is obvious. I think that we are going to discuss that at the Forum tomorrow.

WSJ: Mr. President, when you travel to the United States, You will see that the country is fully preoccupied with the crisis in the Gulf of Mexico. First of all, BP or the American government has asked the Russian government to share your experience of working in deep waters?
In a broader context, do you think that this crisis will fundamentally change the nature of the global oil industry? How will this oil leak change the equation of risks and revenues?

DM: This is a big problem. We see how much attention it has drawn in your country and how much attention the US president is paying to it. In fact, such a problem is capable of shaking anything, including the reputation of the authorities. This is absolutely obvious.

It’s very difficult to find a solution to this problem because it’s for the first time that we are dealing with such a full-scale disaster. Yes, there have been oil spills before. There is a set of conventions on this subject. I’ve purposefully studied all international laws in order to understand what is to be done. And do you know what conclusion I arrived at? This is what I am going to tell my colleagues at the G-20 meeting: despite the fact that we have a legal foundation for removing minor problems, there is no global international legal basis for dealing with the aftermaths of mega disasters like the one in the Gulf of Mexico. First of all, it’s impossible to deal with it at the moment, because there is no technical solution for it. Second, and this is absolutely clear, the general question that arises is who is going to compensate for the losses, and will a company that will formally be vested with the task to solve this problem have enough assets and money for it? And if there isn’t enough money, then who is going to be liable for it? Here comes the question of insurance. But there have been very few cases of insurance against these kinds of risks, and I even don’t know who is going to be ready to act as the insurer for this kind of transactions and who could be in charge of reinsurance. What company could play the role of a reinsurance company because the amount of potential compensation is estimated at hundreds of billions of dollars. Hence, we need a new international approach to this problem. And here Russia also has a role to play because we also extract huge amounts of oil and we have facilities similar to the ones located in the Gulf of Mexico. We certainly look after them and I hope that they are going to be absolutely fine, but it’s a wake-up call. And here, as you’ve said, it’s necessary to find a new way of distributing the risks because these risks are so high that not only an individual company will be unable to cope with such risks but also a whole country, especially if this country is not so powerful as the United States or Russia, if it’s smaller and more compact. Who is going to be held responsible then? What company will answer for all this? That is why we need to consolidate our efforts here.

Of course, I do hope that the US administration, alongside with its special services set up to deal with such situations and through the efforts of companies in charge, will be able to solve this problem. But we urgently need to think about the future.

As for now no one has asked us to participate in these efforts but we are ready to discuss this problem from cover to cover, so to speak.

WSJ: After the crisis struck, you asked to examine Russia’s deposits lying deep in water so as to avert a possibility of such situations.

DM: Yes, of course. Shortly after the accident had occurred, I issued orders to all the ministries in charge of this kind of security. Informal consultations were certainly held with the leading companies that use this method to extract oil at sea. Everybody is watching the situation, including the Prosecutor General’s Office. But there are two aspects to it. The first is technological, and it’s still a big problem. How we should handle similar accidents at great depths, especially if the pressure there is high. I think that scores of scientific papers are going to be written on this subject because after this disaster all the risks should be perceived in a different light. It’s fair.

The second, and no less important, is the economic aspect. In this context, I’ve already asked: who will act as an insurance company for such incidents in future, and in what way should the international community distribute its roles? I think that the conventions which were adopted on this subject in the 20th Century are definitely not enough. They include the United Nations Convention on the Law of the Sea and the International Convention for the Prevention of Oil Pollution at Sea. They are not enough, and we should think about that.

WSJ: Mr President, I would also like to ask you how the oil spill has affected your opinion of BP as one of Russia’s partners. And do you, Mr President, have any worries concerning BP’s financial status?

DM: Well, BP is obviously our partner, I mean it is a partner of a Russian company, and I met with its officials several times when I was in the government, though I can’t remember whether I met them as a President. But we had met several times anyway, before that tragic catastrophe, and discussed various issues. Therefore, we are certainly not indifferent to BP’s future, and even more so because Russian companies have created a joint venture with BP.

I don’t know what will happen next, but I know for sure BP will lose big money this year. How they will manage to cope with those expenditures, won’t they lead to the annihilation of the company or to its breakup is a matter of expediency. And I can be straightforward here: certainly we want the interests of the Russian investors that launched joint businesses with BP to be protected in some ways. It is obvious.

But, on the other hand, I realise that, so to say, business is business, and anything can actually happen. Anyway, I am confident that BP partners in the Russian Federation and other countries follow the situation. I have even noticed that the United States of America and the United Kingdom have rather differing opinions of the situation. The British believe that the position of the US towards BP is too tough.

WSJ: Indeed, it relates to the issue of pensioners in Britain.

As for Kyrgyzstan, what can Russia do in order to mitigate the crisis? The US became too close to Mr Bakiyev in the past. Has it affected the crisis? As you understand it from your information sources, who is really responsible for the outburst of interethnic clashes in Kyrgyzstan?

DM: The situation there is exceptionally complicated, I would even say tragic. Unfortunately, there are several reasons for that.

First, let me remind you that Mr Bakiyev, who has now resigned as the President and left the country, initially came to power through a coup d’etat, which is not a constitutional way. Certainly, his legitimacy was subsequently confirmed at the elections, and he was a partner we worked with. But, nevertheless, it was not today that this problem emerged. It is rooted in the overall instability of the civil society in Kyrgyzstan and immature political institutions there.

I realise that processes of this kind take long time. We are developing our own political institutions as well and we closely follow what is happening now in Kyrgyzstan, our close partner, a strategic one, as it is customary to say. Let me mention that Kyrgyzstan is a participating state to the EurAsEC, to the Collective Security Treaty Organisation, which means that we are allies, but its domestic political instability and desire to solve all the problems by rapidly changing its political deck has already let Kyrgyzstan down once.

What happened before the current civil unrest? We were building our relations with the former authorities of Kyrgyzstan, but I have to admit that previous regime went too far. It is not about some sort of close ties with other countries, the United States of America for example, as that aspect is exactly what is called the issue of foreign policy priorities. But they should have been honest with their citizens, should have earned money honestly without lying to their partners. They should have taken decisions supported by their people, instead of spending national wealth for personal purposes and private goals. None of this has been done. That is why the level of popular support and respect was practically negligible and hence the collapse of the former administration was, in fact, instantaneous. Nobody actually expected this. I believe that even the countries of Central Asia did not think that the situation was so far out of balance.

I would like to recall that at the elections about a year ago Mr Bakiyev received much of the electoral vote. From the angle of public approval, from people’s support, it seemed that his position was stable. But it turned out quite the contrary. It turned out that everything is much more complicated.

There is an Interim Government there now which is not legally legitimate enough but which is trying to cope with the problems. We cooperate with this government, we help it, provide humanitarian assistance and advice.

We are certainly ready to develop bilateral economic relations and we follow closely the recent developments. And what has happened? Unfortunately, it is the same thing that has already happened in Kyrgyzstan once. The inter-ethnic tensions that escalated in the late 1980s and virtually coincided with the disintegration of the Soviet Union, unfortunately re-emerged with the same acuteness and resulted in violent clashes on ethnic grounds which are especially dangerous as we understand that the recovery from such conflicts takes decades if not centuries and in some cases lead to disintegration of countries and establishment of brand new geographical entities. Thus, the roots of this conflict are, unfortunately, rather deep.

But I hope that the authorities of Kyrgyzstan will do everything possible to consolidate popular support and restore law and order. Even now the situation in the south of Kyrgyzstan is close to a humanitarian catastrophe: the number of refugees that have crossed the border and that are now on the territory of Uzbekistan is close to 100 thousand. Uzbekistan, of course, cannot easily manage this situation, it has to provide them with food, water, and housing.

On the other hand, in the areas of conflicts young people with some specific bands on, usually in a state of agitation from alcohol or drugs, keep riding along the streets, shooting sporadically and killing people. I was deeply struck by the situation when wounded people were murdered and emergency vehicles that came to rescue people were burnt, and it was impossible to provide medical care. This shows the level of tension and strain that prevails in society.

This does not mean that there is no way out but, evidently, Kyrgyzstan’s government has to be wise, tactful and attentive, try to communicate with the leaders of corresponding diasporas, communities, ensure constant dialog between them and in some cases use force, nevertheless, as no state can function without law enforcement.

As for the requests to deploy Russian peacekeeping units there, at the moment, in my view, it is not necessary and our partners in Kyrgyzstan have revoked their request for now, as they are to deal with this situation themselves. This is their internal problem and I hope they will be able to resolve it. But we shall see.

That’s the situation.

WSJ: Mr President, are you still opposing operation of the American military base there?

DM: You know, I have never been against the American base there because this base is located within the territory of Kyrgyzstan. I am not the President of Kyrgyzstan; I am the President of Russia. We do not have an American military base and we do not need one, just like there is no Russian military base in America.

If at some moment the leaders of Kyrgyzstan decided that they needed this base, this was their decision, but I should remind you in what kind of circumstances this decision was made.

This decision was made in the beginning of this decade and it was supported at the highest level when the campaign in Afghanistan began and our American partners needed help. And I will be straight with you, back then Russia supported the idea saying that if it was needed for fighting terrorism, for establishing law and order, then it is ok.

However, I believe – and I openly say it – that this base should fulfill specific tasks and finish its operation, it should not be there forever. Well, this issue is likely to cause the most discussions: whether something should or should not be done about it now. In any case, we cooperate with the United States of America on Afghanistan. You know pretty well that we have allowed both military and non-military transit. From our point of view, we provide the maximum support to the mission of establishing order in Afghanistan that is performed by the United States and some other countries.

The issue of bases is beyond the competence of the Russian authorities. But if you want to know my opinion, then I will reiterate that such facilities should not be permanent; they should stop functioning after they have completed their tasks. The leaders of Kyrgyzstan should determine the future of this base. Let them decide.

WSJ: Mr President, have you called the Government of Uzbekistan and urged them to take a balanced stance in order to prevent this domestic problem from becoming an international problem?

DM: I talked to the President of Uzbekistan immediately after it all started. We both, actually, were at the summit of the Shanghai Cooperation Organisation in Tashkent when the situation became aggravated, and we also got in touch over the phone later.

But I think that today the leadership of Uzbekistan has adopted a very careful and balanced position in this regard – it accommodates refugees and, at the same time, it does not heat up tensions. I believe that such a balanced stance can help resolve the problem. I have discussed it with other partners; I have discussed it with the President of Kazakhstan several times. In general, we share the understanding of the roots of this problem and possible developments, possible scenario in Kyrgyzstan.

I can say that the most dangerous scenario would be the following. That law and order is not established but election needs to be held, hence the political environment in Kyrgyzstan would be fragmented and consists of several actors. First, these segments will cause severe domestic tension, discussions in the parliament, different political groups will emerge. At the same time, the Constitution that is proposed to be adopted will transform Kyrgyzstan from a presidential into a parliamentary republic. It is rather dangerous given the instability of power in Kyrgyzstan.

However, the gravest scenario of all would include the coming to power of radicals in an absolutely legitimate way. When people do not believe any more that the civil authorities are able to establish law and order and say that there is only one force that can do it, then we will get a Kyrgyzstan developing by the Afghan scenario of the Taliban times. In my view, such a development of the situation would be rather regrettable and extremely dangerous for our country and other countries of Central Asia.

WSJ: Mr President, now comes the issue of Iran. UN sanctions have been agreed upon, and additional sanctions have been imposed – sanctions of the US.

What is your opinion concerning the progress with the sanctions? Whatever the case, Iran will inevitably gain its nuclear potential, its nuclear weapons potential. And while the world is somewhat divided on this point, on this problem, is it necessary to understand how to deal with Iran if it gets this potential?

DM: You know, I think that we have managed to develop a kind of a common, constructive position on Iran; say, a few years ago, that would have been impossible. Why is it so now?

First of all, it is so because Iran, unfortunately, did not and still does not want to hear the voice of reason. It does not want to reach agreement upon its nuclear programme. We cannot just stay aside. The United States of America, Europe, the Russian Federation and the People’s Republic of China – we are all interested in the nonproliferation of nuclear weapons. So if the programme is not transparent, if there are questions to be asked, we must either cooperate or otherwise put up with these problems.

On the other hand, we still managed, through great efforts, to coordinate the draft resolution acceptable to all. I’ll remind you that opinions concerning Iran are very different. Let’s face the truth: the United States of America has no cooperation with Iran whatsoever. Thus, you have nothing to lose as Iran is not your partner.

As for other countries, they are rather closely tied with Iran; we have quite diversified ties with Iran, and China even more so. This should be always taken into account, not to mention that these kind of sanctions must not damage the Iranian people. Sanctions are usually imposed to compel one to do something, but not to take revenge, not to do harm to the Iranian people. So it is my opinion that the resolution which was adopted reflects the balance of such varying approaches. The sanctions are imposed, they are rather severe, and at the same time they do not harm the Iranian people; these sanctions let the country live but compel – at least I hope so – compel the Iranian administration to take, at some point or another, the decision to cooperate with the world community, to cooperate more closely with the IAEA, to engage in frank and constructive discussions.

I do not know what else needs to be done. To tell you the truth, I would not like all our efforts to go down the drain, so to say, and to be a failure. And what am I referring to?

If we agreed now, if Russia agreed with the United States that these sanctions are collective, then unilateral sanctions imposed whether by the United States of America, the EU or any other countries will only aggravate the situation, because they are not agreed upon with anybody. At the same time, they will also damage our arrangements, because, ultimately, these sanctions may apply to other states. But we did not agree on it when we were drafting and adopting a joint resolution in the UN Security Council.
In my view, the situation should be as follows: yes, we should pursue dialogue with Iran, put pressure on it if necessary, urge it to take a constructive stance, avoid creating problems for civilians, and we should act collectively. If we do act responsibly, I am sure that we will make progress after all.

WSJ: Mr President, do you think Iran will have a nuclear bomb in five years? Is it 80 percent, 60 percent or 100 percent possible? When you talk to intelligence officers in the UK and other countries, do they already assume that it will happen just in this way?

DM: It is hard for me to determine percentage points; I do have some information, I receive on a regular basis updates and reports about the evidence pro et contra, and information provided by one intelligence service or another. Of course, aids of President Obama or any other president do the same thing. But it is difficult to measure it in terms of percentage points. I would like very much the Iranians to pursue only a peaceful nuclear programme as they certainly have the right to do so. But I could easily presume that this programme has different dimensions, especially given Iran’s determination in achieving some of their goals. And if the risk of developing nuclear arms does arise, it will be a major problem for the Middle East.

When I visited some countries in Africa and the Middle East, I was told directly that Iran’s having nuclear weapons would trigger a nuclear arms race in a few states of the region. Then everybody will be concerned about these weapons and start developing them. But if they appear in such numbers, it will pose a rather grave threat, because when there are so many nuclear weapons in such an explosive region as the Middle East, the possibility of using them will increase a hundredfold and grow dramatically.

The point is that Iran’s neighbors already possess such weapons and, by the way, questions arise about how they will use these weapons. The negative thing is that our nuclear club has official and, I hope, responsible members, such as the Russian Federation, the United States of America, France, The UK, the People’s Republic of China; but there are also unofficial members that belong to this club but have no powers there. Still, everybody knows perfectly well that these are nuclear countries and that their Presidents and Prime Ministers have nuclear button briefcases carried with them. This already poses a serious threat to the world. The more such countries we have, the more dangerous this threat will be.

WSJ: In recent years how your relations with Prime Minister Putin has changed?

DM: Formally, they have certainly changed because I am the President while he became the Prime Minister. And this makes it clear.

I have outlined it many times that the President is President and under the Constitution he is the leader of the state and Commander-in-Chief. The Prime Minister is responsible for the economy. In this sense we have a different power distribution system than the United States of America. Ours is closer to the French system probably, although it is unique to a large extent, because it is a Russian system.

If we mean the personal factor, they have not probably changed. We have good and friendly relations. We communicate with each other, meet regularly and discuss diverse issues which are more than abundant.

So formally, our relations have much changed; personally, I hope that they have not changed a bit.

WSJ: Your way of life is as public as before, you visit the same football games and support the Zenit team?

DM: (Laughing.) You know, I do not visit games to support Zenit because I live in Moscow, though I historically did support them. But now I do not often visit football matches, I have a lot to do. Still, if I have time I nevertheless visit games. Sometimes they give me much pleasure and sometimes serious disappointment.

Recently, I visited the game with Slovenia where the Russian team was barred from the world championship. I can say that I had negative emotions and even the subsequent conversation with President of Slovenia did not lift my mood. But what is to be done? I decided myself to come there, to watch the game.

Speaking about other things, I certainly try to take some recreation, it is normal. I am not sure that this a socialised way of living because I have abundant public contacts in most diverse places and, therefore, on weekends I try to spend time at home with my family, to certainly engage in sports because otherwise it is impossible to keep normal spirits. But generally it is sometimes not easy.

WSJ: A question on North Korea. Recently a South Korean ship was sunk, the majority of the world community agreed that it was caused by a torpedo launched by the North Koreans. What, in your view, is really taking place in North Korea? Are we witnessing a transitional stage in that country and thus that was the cause for the incident? What can you tell the world, what do you know about North Korea?

DM: All people know little about North Korea, but unlike, most probably, you I visited North Korea. Have you ever been to North Korea?

WSJ: Once I had a visa, but I cancelled that trip. Nevertheless, when I lived in China I frequently met with North Korean delegations.

DM: I was a member of the delegation to North Korea. I think the visit was in 2000. No doubt, this is a very peculiar country. We have good neighborly relations with it, too, dating back to the USSR times, of course. But North Korea is a very closed nation, and the way they make decisions always raises at least a certain set of questions.

We would like that country to develop. We would like its citizens to be provided with basic goods and food. But I do not know the scenario for North Korea, because, once again, the political system of this country is rather original and unique.

Concerning this incident I can say the following. Of course, it is very sad as people died. Certainly, one of the possible conclusions is that the Cheonan corvette was hit by a torpedo launched from the neighboring country. But it is not the only version.

In my conversation with the President of South Korea I told him that we, firstly, share their grief. Secondly, we need an investigation, as careful as possible, including the expert work. He asked our experts to come. Our experts went there, returned and now they are preparing their own report.

In my opinion, this is rather important, because despite the fact, that only one version is widely known, we do not have to accept it at once. We need a most thorough investigation, and as soon as we receive evident conclusions, as soon as they become public domain, only in this case we can speak about punishing the perpetrators and bringing them to responsibility depending on the fact of who will be among these perpetrators, I mean a country or any other actors.

WSJ: Mr President, in your opinion, what role should China play towards North Korea: should they be more or less active to resolve the situation?

DM: You know, I think that our Chinese partners have a balanced and careful position on this issue, and we also do the same for several reasons. Firstly, and once again, we are neighbors. And, secondly, despite the difficulties in dealing with Korea, nevertheless they should not be pushed into the deadlock and the situation should not be aggravated to trigger some inadequate responses.

In fact, today Pyongyang is making highly aggressive declarations, but if we take such an unbalanced position, this would be very dangerous. The People’s Republic of China is the closest partner of North Korea and hence one of the most important channels to communicate with them. That is why I clearly understand the careful position they take.

WSJ: Mr. President, thank you very much for your time, it was generous of you.