OCTOBER 2007

From Cirqueminime/Paris
http://cirqueminime.blogcollective.com/blog
October 10, 2006

QUESTION (translated from Russian): Mr President, let us begin with what may seem to be a banal topic.

In Germany people are very worried because Gazprom is going to help finance a very famous German football club, Schalke 04, and invest 125 million euros in the club over five years. And Abramovich bought a player for England who was one of the main figures in the German national football team. And now we are asking ourselves the question: ‘Should we Germans be afraid of Russians buying up everything?’

VLADIMIR PUTIN: I think that this should only make you happy. Regarding Schalke 04 and Gazprom, as far as I am aware the issue at hand is not purchasing the club. Gazprom has no such plans. Rather, Gazprom wants to intensify relations between the Russian football club from St Petersburg, Zenit, and Shalke 04 – Gazprom also sponsors Zenit. The issue consists in establishing a partnership between two football clubs. And as far as I know, German partners have shown an interest in the fact that Gazprom is helping finance Schalke 04.

REMARK: Former Chancellor Gerhard Schroeder acted as an intermediary here. And I understand that he was quite successful.

VLADIMIR PUTIN: The issue consists in the fact that even today he has links to some of Gazprom’s projects, some major cooperation projects in the energy sector between Germany and Russia. I am referring to the well-known project of the North European Gas Pipeline.

So he is not only helping ensure that Germany will have a good supply of energy resources, he is also helping cooperation in the spheres of culture and education, and in this case in sports. In addition, as far as I know, the traditional fans of Schalke 04 are miners. And this link to the energy sector means that Gazprom has a natural interest here.

I will repeat once again. The issue at hand is not that of purchasing the club. We are discussing cooperation between two football clubs supported by Gazprom and about advertising during this collective endeavor. Gazprom will receive advertising from these two clubs.

QUESTION: Of course we have prepared a number of questions that relate to energy. But please allow us to now broach another, very serious issue. The fact that the famous journalist Anna Politkovskaia has been shot is in the headlines of all the newspapers.

Can you please tell us how you are affected by the death of this journalist who criticized you very harshly?

VLADIMIR PUTIN: First of all I would like to say that a murder is a very serious crime both with respect to society and with respect to God. The criminals must be found out and correspondingly punished.

Unfortunately, this is not the only such crime in Russia. And we will do everything we can to bring the criminals to justice.

And now, with respect to the political aspect of this affair. The investigation is looking at all possible variants. And of course, one of them, one of the most probable, is related to her work as a journalist. She really was a critic of the present authorities – something that is common to all media representatives – but she often adopted radical positions. And recently she mainly concentrated her attention on criticizing the authorities in the Chechen Republic.

I must say – and I think that experts would agree with me – that her political influence inside of Russia was negligible and that she was probably better known among human rights organisations and in the western media. In connection with this I think that one of our newspapers was correct when it stated today that Anna Politkovskaia’s murder has caused much more damage to the current authorities in general, and to the Chechen authorities in particular, than her reporting did.

In any case, I repeat that what has happened is absolutely inadmissible. This horrendous crime is damaging for Russia and must be solved. It causes both moral and political damage and is damaging for the political system that we are building, a system which must have places for all people, independently of their points of view. On the contrary, we must ensure that people receive the possibility to expose their points of view, including in the media.

You know that several years ago an American journalist of Russian origin, Paul Khlebnikov, was killed in Russia. He also dealt with problems in the Chechen Republic and wrote a book entitled ‘Conversation with a Barbarian’. According to the investigation, the protagonists of this book were not happy with how Khlebnikov portrayed them and they destroyed him.

QUESTION: Please allow me to ask you another two questions. Just today I read the newspapers and various questions are being asked, including by your critics. One of the questions reads as follows: is it possible that the person you support in Chechnya, Ramzan Kadyrov, could be behind this murder? Do you think that this is at all possible?

VLADIMIR PUTIN: No, that is impossible. And I shall tell you why. Because Anna Politkovskaia’s reporting did not damage his political activity nor hinder the development of his political career. I am not going to say right now whether this is good or bad nor am I going to evaluate her point of view. I repeat that in my opinion she was too radical. But first of all, she had the right to her opinions and, second of all, by virtue of this radicalism she did not have a very strong influence on political life within the country, and especially in Chechnya.

Ramzan Kadyrov belongs to those people who, at the time, fought against the federal forces in Chechnya and we should not forget this. Today we are involving all people, independently of their past activities and political convictions, in the power bodies, in the law enforcement agencies in Chechnya. And to illustrate this point I can use the example of a member of a recently elected Chechen parliament who was the former Defense Minister in Maskhadov’s government. Therefore the composition of various political forces, of parliament and administrative structures remains uneasy but, in my opinion, they would have no motive to organise this murder.

Disagreement or a certain discontent with her activities is possible. But I could not imagine that one of the authorities could go so far as to organise such a horrible crime.

QUESTION: Vladimir Vladimirovich, one more question related to the freedom of the media. Is this freedom only connected with Anna Politkovskaia’s murder? For example, is it not also linked to the fact that there is not a lot of criticism of the President on Russian TV? And the organisation Reports Without Borders has ranked Russia at 140 th – one of the last in the world.

Do you consider that Russia has problems linked to this issue?

VLADIMIR PUTIN: I consider that Russia’s political system is in an intermediate stage of development. Our media as a whole is developing. And there are several thousand broadcasting corporations that are registered and operate in Russia. And I want to emphasise this number. Even if the authorities from various levels would want to control such a large system it would be impossible. And with regards to written press and periodicals, than they number more than 58,000. And broadcasting companies number 5,500 and foreigners participate in more than half of them.

But I can also say something precise on this account, namely that when we try to enter the information markets of other countries, including in western Europe and in North America, then we are consistently prevented from doing so. Various bureaucratic pretexts cause delays that last for years. We have concrete examples of this. They find thousands of reasons to prevent our media from working in your information markets. And many of yours work in Russia even without licenses.

QUESTION: Allow me to ask one more question before we move on to other issues. When you will go to Germany journalists will certainly ask you various questions that you are very familiar with – about press freedom, human rights and democracy. Already now in Germany newspapers are constantly demanding that Ms Merkel herself put these questions to you. Can you please tell us whether you are not tired answering all of this?

VLADIMIR PUTIN: No, I am used to this. Moreover, I consider that we do not explain the true state of affairs in these fields in Russia enough.

For example, many said, argued and even accused Russia of concentrating political power in Moscow. Various sources did so. And in Germany they have now adopted a law on redistributing powers between the Landers and the federal centre. And significant changes were also made to the powers of the upper chamber of parliament, the Bundesrat. Many rights were withdrawn from the Landers and given to Berlin. And what did they give the Landers in return? The right to determine the opening and closing hours of shops, and isn’t that great! And in Russia it is the municipal authorities that have this right. But of course we are not saying that we have seen some kind of antidemocratic process in Germany or that power has been excessively concentrated in Berlin. REMARK: I think that now Ms. Merkel is already noticing that federalism in Germany, in particular with respect to her plans concerning healthcare reform, goes against positions of the leaders of a number of Landers governments.

VLADIMIR PUTIN: You know, I also wanted to add that it is very hard to understand and get the feel of just what is expedient and what is superfluous for a given country. But at the same time I want to tell you clearly that we have no desire whatsoever to go back to the Soviet system with complete centralization and totalitarianism. We are simply looking for an internal mechanism that would ensure our citizens’ freedom, would guarantee their rights to govern and resolve certain problems and, at the same time, allow the government to function more effectively and to better serve our citizens.

Let us look at the map of Russia. It is a huge territory, the largest in the world, and the home of hundreds of ethnic groups. Many republics and regions of the Russian Federation have special rights. This is a very complex state formation. And there exist no perfect solutions, no matter how good they might sound or seem, that can be automatically implemented in this country. But we are going to do everything to observe the principles of the modern civilised world, the principles of democracy and ensure that we protect the rights and freedoms of our citizens.

QUESTION: Vladimir Vladimirovich, I believe that in Dresden you will meet with Ms Merkel for the fifth time. You worked in Dresden in the Soviet intelligence services. Ms Merkel herself comes from the German Democratic Republic. Do you consider that all of this complicates your relationship with the present government as opposed to what it was with Mr Schroeder’s government?

And another question. Cooperation between the leaders of our countries has developed over twenty years. First it was between Gorbachev and Kohl and then between Yeltsin and Kohl. Then there was the friendship between Chancellor Schroeder and yourself.

However, today these ties are not as close as they once were. For example, the Interior Minister in the present government, Mr Schaeuble, says that Russian and German relations have no special value. Is it not painful for you to hear such things, such words about a strategic partnership, and not about friendship as it was before?

VLADIMIR PUTIN: No. And to be honest I didn’t really understand the thrust of your question. I love Germany and don’t hide this. I speak German worse and worse. But I love German language and I love German culture. I consider that it is a huge part of world civilization. Russia has always had close ties with Germany. I am deeply convinced that Ekaterina II was one of the most successful tsarinas of Russia. And she was of German origin – she was German.

And as to the change of government in Germany than, thank God, this has not affected relations between the two states. And Ms Merkel is very attentive to developing interstate relations, acts very carefully and is very interested in them; she pays a great deal of attention to this. She speaks Russian.

REMARK: Well?

VLADIMIR PUTIN: Yes, well. To tell you the truth, I was quite surprised. Of course one’s vocabulary diminishes if you do not speak every day, the same way one must practice a musical instrument. But if she is in a Russian-speaking environment than she will start speaking again quickly.

But this is not quite the issue here. I think that the basic political forces in Russia and in Germany – in any case this is how I understand it –understand the meaning of Russian-German relations for the people of our countries. And not only for our peoples but for all of Europe, for the whole world. More than 50 percent of our volume of trade takes place with Europe and 10 percent of this trade is destined for Germany.

I think that the signal that you are talking about is not as much directed at Russia as it is directed across the ocean. I know the German Interior Minister, I think that he can have his point of view, and I respect that point of view. But I shall repeat once again that both the Russian political class and the German political class are perfectly aware of the value of Russian-German relations.

And therefore of course it is natural that personal relations play a significant role here. But I want to tell you that, to put it mildly, Mr Schroeder and Mr Kohl did not always have the very best relations. I have very good, friendly relations with Mr Schroeder. But I regularly met with Mr Kohl in Moscow, both at my house and here in the Kremlin, throughout all these years and I continue to do so today. This is a great honour for me. I consider that he is one of the world’s major politicians today.

And in spite of the fact that Gerhard Schroeder is no longer in power I continue to have friendly relations with him and intend to continue to do so in the future. But this does not hinder the development of my personal relations with Ms Merkel. Private relations, good private relations, always help our work and we now have very good friendly relations. And the fact that she used to live in the German Democratic Republic does not hinder our relations. On the contrary, I think that it helps them since people’s mentalities in eastern Europe often are very similar.

The present government wishes to somehow strengthen transatlantic relations. And would we prevent this? We have no say in this at all. Problems had arisen concerning Iraq, with respect to Iraq, but this was Germany’s position, Schroeder’s government’s position. And we never influenced this position, we had no relation whatsoever to this. On the contrary, when being honest I must say that it was other partners that tried to influence our position.

For that reason Germany’s relations with other partners, including with respect to transatlantic solidarity, have no relation whatsoever to us. We did not influence them, we do not influence them, and we are not preparing to start doing so. And those reasons relations cannot be a factor in Russian-German relations.

QUESTION: Germany is assuming the EU presidency and the G8 presidency. These are also important institutions for Russia. What are your concrete expectations with respect to how relations with Russia will develop under Ms Merkel?

VLADIMIR PUTIN: Relations with Germany are important for us both on the bilateral level and with respect to our contacts within international organisations –first of all with the European Union and also with NATO.

We discussed future work with Ms Merkel as G8 chairperson.Germanywill only finalise its goals for its presidency later on. But I hope that there will be a certain continuity with the work that was done in St Petersburg. Because during this year and finally in July we discussed what all are aware of and what is important for all: energy security, the struggle against infectious diseases and education.

And as to the European Union, Germany is one of our major partners with respect to developing our relations with a united Europe. In 2007 the agreement between Russia and the European Union comes to an end and we must produce a new document. We have major tasks that stand before us with respect to creating the four common spaces. These consist in the economic space, the common space in external security, in internal security and in the spheres of culture and education.

Representatives of the European Commission put forward an initiative about establishing a free trade zone between Russia and the European Union. If my memory does not deceive me, than Mr Mandelson made this proposition in Sochiat the Russia-EU summit. It is a serious, important task and we feel very positively about this initiative. This is a huge joint effort. We are convinced that if we were to do this then it would undoubtedly have a very positive influence on our economic cooperation, help us enter the markets of third countries, and help us stabilise certain branches of our economy. But we think that Germany could pay more attention to this during its presidency.

Relations in the cultural and educational spheres have an important value. Germany was one of the first countries with which we concluded agreements about simplifying the visa regime. This has acted as a good example for other governments and, as an end result, we also concluded such an agreement with the European Union. For that reason I think that Germany can easily maintain its leading role with respect to developing relations with Russia.

QUESTION: Another question is about trade and economic relations. There are certain contradictions here. You speak about a free trade zone between Russia and the European Union and, as is well-known, Ms Merkel speaks more about creating a free trade zone between the European Union and the USA. From your point of view, what can Russia offer? What is Russia’s appeal for the European Union?

VLADIMIR PUTIN: As I have said from the very beginning, this was not our idea, it was the European Union’s idea to establish a free-trade zone between Russia and the EU. And as I already said, it was the trade commissioner Mr Mandelson who did so. Therefore what you just said illustrates a normal problem in the European Union. The European Union needs to come to an internal agreement about what things are the most important and should have priority. But, actually, it seems to me that one does not exclude the other.

I am not an expert on relations between the EU and the USA. And if the free trade zone can help resolve various trade disputes in the field of agriculture or in steel and other things then, my God, this will only help stabilise the world economy. We would only welcome this. But it does not concern us directly. And we are not planning to enter any competition. Therefore since they suggested to us to establish such a zone then, I repeat, we reacted positively. We are ready for teamwork.

I see really good prospects here to make our economy more competitive within the international economy as a whole.

Let us begin with energy. We have huge resources. All of Europe needs our energy resources. And we need to remove all fears, all anxieties and establish stability, reliability and predictability. Is it possible to do this within a free trade zone? It is possible.

The high-tech sphere. Here I would include the aviation industry. If we unite the forces of the European Aeronautic Defence and Space Company and our growing industry then we will become a strong contender in the world market.

And during joint efforts we can be equal partners. Can there be such a harmonious partnership between producers of aviation technology in Europe and the United States? I don’t know. Today it seems to me that this is unlikely. And there are other spheres in which cooperation is increasingly possible and has very good prospects. We just established the largest aluminum corporation in the world. I repeat that there are many different fields in Russia and they are very interesting. But we are not rushing into anything. Rather we must carefully evaluate all this and let our experts examine it.



QUESTION: But the door to Europe is not always open, is it? Looking at EADS, for example, we have heard in both France and Germany that, “we don’t want Russian influence there”. Do you have the feeling that Russia is not welcome?

VLADIMIR PUTIN: I don’t have this impression. What I’ve noticed is that there is insufficient information on our position. This is our fault. I spoke about this at the meeting in Paris and I can repeat what I said then now.

As is well known, EADS saw its share price fall. Our financial institutions made use of this opportunity and acquired a five-percent stake. But we do not intend to use our financial possibilities to interfere in the work of any industrial organisations in Europe.

Moreover, we are ready to cooperate with EADS on a partnership basis, on an industrial basis, only if we first reach an agreement with our partners. Only in this case could the stake acquired by our bank end up in the hands of the emerging Russian aviation corporation. But if we do not reach such an agreement, the bank will simply continue work on the stock market with its securities and we will not have involvement in the production side of things at all. If the share price rises, the bank will sell its stake and make a profit. In other words, it will do what any other bank would.

But the fact of the matter is that EADS already holds a stake in one of our aviation corporations, Irkut. We do not view EADS as an ideal corporation. If we take part in this work, we will need to discuss with our partners how the corporation should be organised and on what principles it should function. It should be a market organisation and not an organisation where the state decides everything in advance and years ahead, thereby undermining its market status and effectiveness. We therefore do not have any desire to enter this corporation at any cost. If we do not reach an agreement, we will simply work alone or look for other partners and we will find other ways of cooperating with EADS. In other words, there is nothing at all to fear here. You can be absolutely sure that this will be cooperation based on an open partnership and that there will not be any hostile takeover. We have no interest in working that way with our European partners.

QUESTION: Looking at the aircraft building industry, if we take cooperation with Airbus, aircraft building is a sector that, it seems, has not flourished in Russia over recent years.

VLADIMIR PUTIN: Yes, of course, but at the same time, we know what possibilities we have in this sector. We have a very good school, good specialists and good companies overall. We need to work out with our potential partners what should be produced and where. Wide-fuselage aircraft, for example, could be built under one set of conditions, medium-haul aircraft – an area in which we have very good possibilities – could be built under another, and military aircraft, where I think we are by far and away the world leaders, under a third.

There are special fire-fighting aircraft and then there are also helicopters, and these are areas where we also have a clearly leading position. Then there is also spare parts production. In other words, we have plenty to discuss.

QUESTION: As I understand it, five percent is not very much. But talking about bigger stakes, about acquiring a stake of 25 percent, say, which would make it possible to block decisions and use the right of veto, would you be interested in increasing your stake?

VLADIMIR PUTIN: We have not made a decision in this respect yet, and neither have our European partners. An increase in our stake from five percent to ten percent or more, if it were to happen, would result in self-imposed restrictions for us in production and work on markets. This would create serious limitations for our producers in the future. Some say that we should not take this path, while others say we should because it would raise the technological level overall and help make the united corporation more competitive on world markets.

Personally, I think this course is possible, but we have not made any final decision as yet. A decision can be made only through the negotiation process, only at expert level, as Ms Merkel, Mr Chirac and I agreed at our meeting in Paris.

QUESTION: Mr President, Russia’s image as an energy supplier was tarnished somewhat after the Ukrainian crisis at the beginning of the year. Did you manage to restore confidence during the G8 summit in St Petersburg?

VLADIMIR PUTIN: I think this was quite simply a deliberate attack on Russia. No one obliges Germany, for example, to sell its goods at prices lower than world prices. Why does everyone expect Russia to sell its goods at reduced prices? We have never restricted energy supplies to our consumers in Europe, and nor do we ever intend to.

Life itself, our cooperation and the work that we undertake prove that Russia has always been and always will be a reliable partner, and we have no need to waste money on propaganda campaigns in the press to prove this. We currently deliver around 40 billion cubic metres of gas to Germany. If we build the North European Gas Pipeline, and this work is already going ahead, then by 2010 we will be able to deliver an additional 27.5 billion cubic metres to Germany, and in another two or three years, we will increase this total by a further 27.5 billion cubic metres. In other words, we will add 55 billion cubic metres to today’s 40 billion cubic metres. In this way, Germany will not only be able to cover in full its own increasing demands, but will also become a major centre for distributing gas to other European countries. At the moment, Germanyis a final consumer for our gas, but once this project is complete, Germany will receive gas that it will then send onwards to other European countries.

QUESTION: Will all this gas come from Russia’s neighbours in the Caucasus?

VLADIMIR PUTIN: It will all come from the north.

QUESTION: So you will be drawing only on Russia’s own reserves?

VLADIMIR PUTIN: Yes, the Caucasus has nothing to do with it. We planned that all of this gas would come from the Yuzhnorussky Deposit in Russia’s northwest region. BASF will be taking part in developing this field, and perhaps also E.ON, with whom we are currently in negotiations.

There is also the vast Shtokman Deposit in the Barents Sea. Its gas reserves are estimated at 3.7 trillion and perhaps even 4 trillion cubic metres. This is one of the biggest gas deposits in the world and has reserves to last for 50-60 years of operation. Gazprom announced today that it would send some of the gas from precisely this deposit through the North European Gas Pipeline to Germany.

RESPONSE: But Gazprom also announced today that it would develop the deposit on its own and did not need any foreign help.

VLADIMIR PUTIN: No, this is not the case. Let me explain. Gazprom launched a tender for the development of this deposit, and at the current stage five companies took part. Gazprom set the condition that the participants in the project and partial owners of these gas resources would have to offer Gazprom assets in exchange, not money, but assets. Raising money for a highly liquid project such as this is easy on the world financial markets. What is needed is not money but assets. But no one was able to offer assets equivalent to these huge reserves of gas – 3.7 trillion cubic metres.

So, what is Gazprom doing now? Gazprom said that since it has received no suitable offers from anyone, it is cancelling the tender. Previously, we planned to transform all of the gas from this deposit into liquefied gas and send it by tanker to the world markets, above all in North America. Now we have changed our decision and part of this gas will be sent through the pipeline to Germany, while part will be liquefied and sent to the world markets. We have not decided yet on the actual proportions.

But we have not abandoned the idea of bringing in partners to take part in the actual extraction, transportation and liquefying operations. The resource user, the owner of the resources, however, will be Gazprom alone.

Incidentally, Ms Merkel raised this question during one of her first visits to Moscow. Right here in this hall she said, “Could you look at the possibility of sending at least a portion of the gas from this deposit to Europe and to Germany?”

QUESTION: Do you understand the debate going on in Germany about how we have become too dependent on Russian gas?

VLADIMIR PUTIN: No, I don’t understand this discussion and I think it is being artificially politicised. This is being done by people who are artificially exaggerating the problem and doing so out of political considerations, aware that this is quite simply provocation. The alternative is that the people doing this are just a bit stupid. This sounds a little rude, perhaps, but this is the reality of the situation.

Let me explain why. If we are linked together by a pipeline system into which we are sending gas, and we have no other pipeline, then we are just as dependent on you as you are on us. It is precisely this mutual dependence that creates stability and predictability.

But of course, if we are constantly hearing that you have too great a dependence on us and need to find other suppliers, then we cannot but begin to wonder if someone is going to start restricting our supplies, and then, of course, we begin to look for other markets.

RESPONSE: In the east.

VLADIMIR PUTIN: This is indeed the case. We are building a strategic partnership, but the West still has the same prejudices as it did 50 years ago. I do have the impression that the West does not react well when Russia begins to behave, shall we say, in capitalist fashion.

I don’t think we should huff and puff and feel offended in this respect. I think we simply need time and we need to build up a positive experience of cooperation.

Bavarian companies are making their contribution to building up this cooperation. Of the 2,500 German companies working in Russia, half are Bavarian. Our trade with Germany will most likely reach a figure of $40 billion this year, and trade with Bavaria accounts for 15 percent of this figure.

RESPONSE: Stoiber is a good partner.

VLADIMIR PUTIN: Yes, he is a reliable partner.

QUESTION: Today is a special day, Mr President, and we are very grateful that you have given us so much time. Allow me to ask you the following question: North Korea announced today that it has conducted a nuclear weapons test. In your opinion, how should the international community react to this news?

VLADIMIR PUTIN: It is not enough to simply say we are disappointed. We condemn this test, above all because it deals a serious blow to the nuclear weapons non-proliferation process. But I will tell you now not only how we should react but also how we should organise international relations in such a way as to ensure that this does not happen again.

Above all, we must strive to ensure that international law reigns supreme in international relations and that all countries, whether big or small, feel safe and that there be a system of absolute international guarantees to ensure this security. This way, small countries would not have the desire to acquire the most advanced weapons in order to ensure their security.

Second, we need to ensure that all countries have equal and non-discriminatory access to the latest technology, including to nuclear technology, for peaceful purposes, of course.

Third, we need to toughen the non-proliferation regime, but this would be fair only if we first ensure the first two points I mentioned.

As for the current situation with North Korea, like the situation with Iran, I think that we need to act using political and diplomatic means and that our reaction should be in keeping with the events taking place.

QUESTION: How can we ensure unity among the great powers with regard to Iran? After all, nothing has really been achieved so far. Do you think that imposing sanctions on Iran is a possibility?

VLADIMIR PUTIN: We are now discussing all possible options. I think that we do have different options. We must not drive the problem into a dead end, because then we could find ourselves stuck without a way back out again. I do not want to say what these decisions could be in advance now, but I think that if we have the will to look for compromise solutions, such a solution can be found. These solutions do exist. Practice over the last years shows that we can resolve issues of this kind only by working together. The most important thing in resolving complex issues like this is to ensure unity. But we can do this only if all the participants in the process are willing to compromise without trying to impose their views on all the other participants.

There are no negotiations with North Korea at the moment. They were interrupted a year ago.

RESPONSE: Looking back to Bill Clinton’s years, the Americans were more progress-oriented then than now.

VLADIMIR PUTIN: More progress or not, the fact remains that the negotiations ended a year ago. I am not going to go into the reasons now. But negotiations should never be cut off. It is important to maintain the negotiating process at whatever cost in order to ensure that there is always at least some kind of light at the end of the tunnel.

QUESTION: Mr President, in response to the arrest of four Russian officers in Georgia, Russia has cut off all communications with this country. Do you want to destroy Georgia economically because it has a very pro-American president?

VLADIMIR PUTIN: Of course not. This is the Georgian people’s choice and we will always respect their choice because we have close, centuries-old ties to this people.

Georgia in its time asked to become a part of the Russian Empire. This was the people’s desire. The Georgians are a very proud, freedom-loving and talented people. Like the Russians, they are Orthodox Christians. Even in as sensitive an area as military affairs, our two peoples have written many vivid pages together.

Many Georgians live in Russia and it makes us very proud that they have chosen our country as their second homeland. They have made a great contribution to the development of our country and our culture.

But the problem in this region is far more complex. Do you and your readers know, for example, that the Ossetians believe that ethnic cleansing has been carried out twice in their lands in recent times, first in the 1920s and then at the end of the 1980s? They say that this is genocide carried out by Georgia. This is where the root of the problem lies.

The same goes for Abkhazia. Whether our Georgian colleagues like it or not, they are seen in this region as a sort of regional mini-empire.

This concerns us directly because, in the case of the Ossetians, for example, during the Soviet era, Ossetia was simply divided in two, with part of the people on one side of the mountain range, in the North Caucasus – today this is a region within the Russian Federation, the Republic of North Ossetia-Alania – and the other part transferred to Georgia, where it is today known as South Ossetia. The Ossetians are a divided people today, just as was the case for the Germans when the country was divided into the Federal Republic of Germany and the former GDR. That division was a result of World War II, while the division of the Ossetians was a result of the collapse of the Soviet Union. The Ossetian people find themselves today in the same situation as were the German people after World War II.

We are willing to help Georgia restore its territorial integrity, but our position is that this can be done only based on the desire of the Ossetian people themselves. No one has the right to force them to do this. What is needed is to act carefully using diplomatic and humanitarian means, especially keeping in mind earlier historic problems. We have spoken about this many times with the Georgian leadership and they agree and say that yes, of course this is what we need to do. But in reality they are doing everything to resolve this problem through war: they are arming themselves beyond all limits, violating all the previous agreements and constantly carrying out provocative acts in the conflict zone.

To speak frankly, I have said these same words to the Georgian leadership and said that this concerns Russia directly because part of the Ossetian people lives in Russia.

As for Abkhazia, it is the same situation. There are many peoples in the Russian North Caucasus who consider themselves ethnically very close to the Abkhaz people. Here too, there is a need to act using humanitarian, political and diplomatic means.

But the current Georgian leadership for some reason thinks that if relations between Russia and Georgia worsen, this will help them to resolve the problem of restoring their territorial integrity. At the same time, we have almost one million Georgians living permanently in Russia, working here and sending money back home to support their families, a total of around $1 billion every year. There are very close ties between our peoples, between our industries. Every country has the right to its sovereignty and the right to choose its partners and advisers, but this should not lead a country into taking aggressive action. In this situation, we have no choice but to react.

As for the anti-Russian rhetoric, we tolerated it, but when the Georgians began taking provocative action and arrested our officers, we had no choice but to start reacting. We had reached an agreement with Georgia, at their request, that we withdraw our troops who were still stationed there after the collapse of the Soviet Union, and we are doing this as agreed and according to schedule.

Our officers were arrested just before municipal elections took place in Georgia. I don’t know if this is just coincidence or not, but I think it is unacceptable to resolve domestic political problems by whipping up anti-Russian hysteria and military tension.

QUESTION: My final question, Mr President: according to Russian legislation, you cannot run for re-election after 2008? This isn’t possible?

VLADIMIR PUTIN: I do not have the right to stand for office three times in a row.

QUESTION: But I recall that in Hanover, in a very small circle, you said that it was theoretically possible to take a break and then come back. Of course it was said to be heard by wider circle of people. But my question now is, what do want to achieve, as President, in the time left until 2008, and what do want the people of your country to remember you for after your time in office ends?

VLADIMIR PUTIN: We have a number of development plans. The most important thing for us is to develop our economy. Over these last years we have ensured a consistently high rate of economic growth – around 7 percent annually over the last four years. When I became President, our foreign currency and gold reserves stood at $12 billion, and now they have increased by $80 billion over the first half of this year alone and currently come to a total of around $270 billion. Added to this are the Government’s reserve funds, which come to $70 billion. Furthermore, we have paid off our debts in full.

We have now become a grain-exporting country, something that was not the case not only in the 1990s, but also in the Soviet period. Last year we sold 13 million tons of grain abroad, and this year we will be able to export around 10 million tons.

But none of this has any sense if it does not bring change to people’s lives. Over these last years, average incomes have been rising by about 9 percent a year, and wages by a little over 10 percent a year. Pensions have been rising by around 8.5 percent a year. These are all figures in real terms.

We are keeping to our main macroeconomic targets. So far, we have not managed to reduce inflation by as much as we wanted, but the downward trend is clear and inflation is getting lower with every passing year. Unemployment is now at its lowest level in recent years.

Our main task is to diversify our economy and strengthen ownership rights. We have set ourselves the objective of bringing order to our legislation in this respect. This concerns corporate law, strengthening the judicial system and improving securities regulations.

We have taken serious steps towards improving our country’s defence capability. Starting from January 1, 2007, compulsory military service will be one year instead of two. A large part of the Armed Forces will be manned by contract servicemen, that is, people who will be paid to serve. We have considerably strengthened and modernised our nuclear deterrent forces in the air, at sea and on land.

We are working on modernising our social sphere. In order to concentrate administrative and financial resources in areas where they are needed to give a boost to the development of specific areas, we have packaged a number of problems together in what we have called the national projects – priority projects in healthcare, education, agriculture and affordable housing. Work is proceeding more rapidly in some areas and slower in others, but we are seeing development in practically all areas. We are putting resources we could previously only dream about into these projects and I hope that our people are already seeing the results and will soon have confirmation that we are on the right road ahead.

I have proposed a whole programme of support for families with children, and in particular, support for women with two or more children. This programme aims at improving the demographic situation and encompasses several elements, namely, encouraging people to have children, bringing down the death rate, and implementing a clear immigration policy.

But this is all work that will take more than just a year or two or even four to carry out. I very much hope that work will continue in all these areas after 2008. The initiatives I mentioned all have broad public support and whoever find themselves at the head of the country after 2008 will inevitably have to take public opinion into account and, whether this person wants to or not, will have to carry out these plans. I find it hard to imagine that the future head of state would try to change these decisions aimed at resolving the main social, economic and defence problems the country faces.

As for what I would like the public to say about me when I come to the end of my term in office in 2008, I am not a natural-born politician and was never previously involved in politics. Strange though it may sound, I do not feel like a politician even today. I am not expecting any particular gratitude. I think that I have worked honestly , indeed putting all my strength and effort into the job. I think that the fact that the Russian people have entrusted me with this high office and entrusted me to be the head of the Russian state is in itself a gift life has given me, and for this alone I should thank the Russian people.

QUESTION: Will it be enough for you after this simply to have the respect of the people, or would you like the Russian public to love you?

VLADIMIR PUTIN: I would be happy to answer your question if it wasn’t for the fact that you said your previous question was the last.

(Laughter).

RESPONSE: My most sincere thanks, Mr President, and I wish you an excellent visit to Germany.