Putin calls for closer economic cooperation with the EU

[pkpatriotic]

Putin calls for closer economic cooperation with the EU

Putin says Moscow and Brussels need to join forces
Andreas Illmer, Martin Kuebler (AFP, dpa)

Russian Prime Minister Vladimir Putin has said his country wants to work more closely with the European Union in the future, possibly establishing a free trade zone. His comments come ahead of a two-day visit to Germany.

Russia is aiming for a free trade zone and a common industrial policy with the European Union.

Prime Minister Vladimir Putin, writing in the German daily Sueddeutsche Zeitung on Thursday, said his goal was to create "a harmonious economic community from Lisbon to Vladivostok."

Cooperation between Russia and the EU could even result in a free trade agreement or similar forms of economic integration eventually leading to a "common continental market."

"We should be frank about it: The global economic crisis has revealed both Russia and the EU to be economically very vulnerable," Putin wrote.

Russia, he argued, was still too dependent on its energy exports, while the EU was in danger of jeopardizing its position on the international markets, due to a decrease in its industrial productivity.

"What's on the agenda: How can we trigger a new wave of industrialization to roll across Europe," Putin wrote.

Different takes on energy cooperation

He suggested strategic alliances in key industries, including shipbuilding, car manufacturing, space exploration and the pharmaceutical industry.

Energy policy, Putin wrote, was another field where closer cooperation was needed. From nuclear technology to gas and oil exploitation, there was a need for closer ties with Brussels.

The European Union gets around 25 percent of its natural gas from Russia. In the past, however, Brussels has left little doubt that it wants to diversify its energy supply to reduce dependency on Russia.

Interruptions to the supply have in recent years lead to energy shortages in several EU member states.

Putin also called for easing and eventually lifting visa restrictions between the EU and Russia. This, he wrote, would bring about not the end but rather the beginning of true integration between his country and the 27-nation bloc.

Putin's comments preceded his visit to Germany, which starts on Thursday. He is scheduled to meet with German Chancellor Angela Merkel on Friday.

Merkel, meanwhile, has downplayed the chances of a possible free trade zone. Speaking to reporters in Berlin on Thursday, she pointed to Russian high tariffs and Moscow's trade relations with neighboring countries as potential stumbling blocks.

"Of course we support the idea of a free trade zone between the EU and Russia but I have to pour a bit of cold water on it," she said.

"The steps that Russia has taken recently do not point in that direction."

She pointed out that Russia, not yet part of the World Trade Organization (WTO), has established trade ties with Kazakhstan and Belarus, countries whose statuses as potential WTO members are far less certain than Russia's.

EON, Gazprom on the agenda

Merkel and Putin are also expected to discuss German energy company EON possibly selling its shares in Russia's Gazprom.

Media reports on Wednesday suggested EON plans to drop the 3.5 percent stake it holds in the Russian energy giant.

EON had dismissed reports that it would sell its 4.5 billion euros ($6 billion) in shares, while a government spokesman in Berlin confirmed the issue was on the agenda of the Merkel-Putin talks.

The EU is Russia's largest trading partner, making up about one half of its foreign trade. Total trade in the first half of the year was $141.9 billion (106.3 billion euros), according to the Russian federal customs agency.

 

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Russia introduces stricter visa requirements for EU citizens

Russia cited the 'principle of reciprocity' for the changes

Russia has tightened visa restrictions with EU citizens, citing the "principle of reciprocity." The move may set back talks on visa-free travel, and Germany has strongly criticized the move.
Viacheslav Yurin, Markian Ostaptschuk/acb

From November, German citizens applying for a Russian visa must now show a bank account statement, proof of earnings and the registration of a personal business or place of residence. This is all meant to prove the applicant's willingness to eventually leave Russia and return home.

Russian authorities cited the "principle of reciprocity" for the changes in requirements, as Russian citizens must present similar certificates when applying for entry into the European Union.

Moscow has sought visa-free travel with the EU for years, and President Dmitry Medvedev has said Russia could lift visa restrictions immediately.

"Our country is ready to solve this problem - the problem is not ours," he said.

At a Russia-EU summit in Rostov-on-Don with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso earlier this year, Medvedev openly offered to end visa restrictions, hoping to accelerate negotiations. Now Russia is hoping for a deadline on visa-free travel by the next Russia-EU summit on December 12 in Brussels.

Little understanding

Germany belongs to those EU member states which support a gradual relaxation of visa restrictions with Russia. Foreign Minister Guido Westerwelle made that clear at a meeting with his Russian counterpart Sergei Lavrov on November 1, stipulating that there were still many details the EU had to clear up.

Thus Berlin has shown little understanding for the most recent tightening of visa restrictions, and the Foreign Ministry stated it would not accept the restrictions without protest.

The Bundestag also criticized Russia's move, with parliamentarian Marina Schuster of the foreign affairs committee saying she was "surprised that Russia has taken this step," which moved the process backwards.

"The goal should be for both sides to make advances toward visa freedom - and Lavrov and Westerwelle also discussed this," she told Deutsche Welle.

Quid pro quo

However, Hans-Henning Schroeder from the German Institute for International and Security Affairs said Russia's tightening of visa restrictions was a completely normal diplomatic step.

"The Schengen zone makes certain demands of Russian applicants for visas, and now Russia is simply making the same demands," he said, referring to Europe's border-free travel area. This may be bothersome, he added, but it is not unusual.

Schroeder said one should not assume that the tighter visa requirements would have consequences for negotiations on visa-free travel.

"There won't be visa-free travel without compromises," he said. "Rather it's a negotiation process, and the Russian side has to bring bargaining power to the table."

A host of questions must still be resolved, on issues like border security or readmission agreements. Schroeder said ultimately the Schengen states will hope to ensure that any ending of visa restrictions will not turn into a liability.

 

[pkpatriotic]

EU's relations with Russia show signs of thawing
After reaching a low not seen since the Soviet era over the last couple of years, relations between the EU and Russia are showing signs of improving. Several points of contention, however, remain.

Warm body language between EU and Russian leaders could be a good sign for relations
Mark Latham, Editor:Sean Sinico

The annual summit between the European Union and Russia, which took place on Wednesday, was described by European Commission President Jose Manuel Barroso as "one of the best meetings we have had."

But, apart from a surprise and welcome announcement that Russia now aims to cut its carbon dioxide emissions by 20 percent to 25 percent - up from an earlier target of 10 percent to 15 percent - little of substance emerged from almost five hours of talks in Stockholm.

Earlier in the week the EU and Russia agreed an early warning system designed to give notice of energy supply problems. But at the summit the 27-nation bloc failed to receive assurances that Russia would refrain from cutting off gas supplies, as it did in January following a dispute between Moscow and Kyiv over transit payments.

Last week Russian Prime Minister Vladimir Putin raised concern in European capitals when he said Russia was prepared to close the valves again if Ukraine failed to pay for its natural gas or illegally siphons gas from the pipeline. Meanwhile, a suggestion from Putin that the EU should lend a billion dollars to Ukraine to help finance secure deliveries has been dismissed by European leaders.

With a quarter of the EU's gas coming from Russia, and most of that piped through Ukraine, the two-week shutdown left millions of people in eastern Europe without heat and forced factories to close.

Although the EU wants to diversify its energy supplies, its reliance on Russian gas is likely to become further entrenched with the building of two multi-billion euro gas pipelines, which will bypass Ukraine: the Russian-backed South Stream and North Stream pipelines. Both projects are seen as rivals to the EU's planned Nabucco pipeline to bring gas to Europe from Central Asia.

Security of energy supplies

The EU is now hoping that bilateral talks between Russia and Ukraine, which got underway in Yalta on Thursday, will avert a possible new conflict disrupting supplies of Russian gas.

Ukrainian Prime Minister Yulia Tymoshenko and Putin brokered a deal last January ending a conflict over gas pricing. But relations between Russia and the former Soviet republic have slid further in the run-up to Ukraine's presidential election, slated for January 17, and the outcome of the talks is difficult to read according to analysts.

Russia promised to cut its CO2 emissions

The gas deal between Russia and Ukraine has become mired in infighting in Ukraine between Tymoshenko and her rival, President Viktor Yushchenko. Although Ukraine has so far settled all its bills on time, Tymoshenko has conceded that meeting the monthly gas payments is a struggle.

At the EU-Russia summit there was no movement from Russia on issues such as human rights, in spite of the European Parliament last week calling on Russia to improve its act on this and other issues such as the status of the occupied Georgian territories of Abkhazia and South Ossetia. For its part Russia is likely to have been disappointed by lack of progress over its wish to secure visa-free travel for its citizens.

WTO accession expected soon

More positively, Russian President Dmitry Medvedev indicated his country was committed to joining the World Trade Organization (WTO). Russia is currently the world's largest economy outside the Geneva-based WTO and has been negotiating membership for 16 years. The issue of Russian membership of the international trade arbiter is considered vital to the EU, which is Russia's largest trading partner with annual trade last year amounting to $382 billion.

Medvedev said a much-delayed new strategic partnership agreement between Russia and the EU would be agreed soon to replace a previous agreement that expired at the end of 2007.

Emissions cuts

Russia's offer to up its goal of cutting carbon dioxide emissions to between 20 percent and 25 percent below 1990 levels by 2020 is likely to have been gratefully received by the EU which has been leading calls for emissions cuts ahead of next month's round of climate negotiations in Copenhagen.

Russia's upwardly-revised pledge could prove useful in putting pressure on other heavily polluting industrialized and emerging countries like the US, China and India to make similar offers.

Russia's increased goal will actually allow it to increase emissions because the country's emissions have fallen sharply since the collapse of the Soviet industrial base since 1990. Russia claims it will meet its new commitment by improving the energy efficiency of Russian factories by 40 percent.

Low expectations

In spite of the lack of significant breakthroughs to come from this week's summit there is little doubt that relations between the EU and Russia are finally on the mend. Relations hit a low over the last year following the August 2008 Georgia-Russia war and the disruption to Russian gas exports last winter.

According to Arkady Moshes of the Finnish Institute of International Affairs the mood of this week’s summit was "significantly more positive" than previous years and belies the lack of concrete agreements.

"In terms of commitments it is true that nothing much was achieved, but nothing much was expected anyway," he said. "The Russian leader spoke with the EU in the sort of language that the EU likes to hear - particularly with regard to the fact that Russia is serious about joining the WTO. At the same time Barroso spoke the language that Medvedev likes to hear. For example that the EU is ready to assist Russia with modernization plans."

Moshes said he was optimistic that differences over the issue of visas could be resolved "once security issues have been addressed." Recent research by Moshes into attitudes to the liberalization of visa policies in European capitals had revealed that EU states were "not negative."

"Concerns about the possibility of illegal Russian labor migration are actually very low," Moshes said.

The appointment of an EU council president and foreign policy head, as envisaged by the Lisbon Treaty, which comes into force in December, would lead to a more coordinated approach to negotiations between the EU and Russia, according to Alex Nice of Chatham House.

Until now the relationship has been piecemeal. Whereas some countries, particularly Germany, have favored rapprochement through economic ties, other countries, such as the UK and some of the newer EU member states, have been more cautious.

"Economic engagement is to be encouraged as long as EU standards of transparency and the rules of the game are observed," Nice said.

Nice said he was not surprised at the lack of any progress by Russia on human rights. Despite frequent comments by Medvedev that he was in favor of liberalization, freedom of speech continues to be routinely suppressed and there have been no improvements to human rights since Medvedev came to power 18 months ago.

The EU was unlikely to extend visa-free travel to Russian and Ukrainian citizens, Nice said, but liberalizations of red-tape would improve relations.

Bilateral relations between a number of EU countries and Russia have improved significantly in recent weeks. Earlier this month saw the first visit to Russia by a British foreign secretary for five years.

Russia's relations with Sweden have also been strained since Sweden's Foreign Minister Carl Bildt compared Russia's military deployment in Georgia last summer with Hitler's invasion of countries in central Europe.

Sweden's recent decision to back the 8 billion euro ($12 billion) North Stream pipeline is believed to have improved the mood ahead of this week’s summit. The 1,200-km pipeline is designed to pump some 56 billion cubic meters of gas a year from the Russian Baltic port of Vyborg to the German port of Greifswald and is expected to come on stream in 2012.

 

[pkpatriotic]

Merkel treads carefully as Putin pushes for closer cooperation
German Chancellor Angela Merkel has voiced support for Russia's efforts to join the World Trade Organization in 2011, but rebuffed Russian Prime Minister Vladimir Putin's call for a free trade area.

Merkel and Putin don't see eye to eye on everything
Russia | 26.11.2010

During his visit to Berlin, Russian Prime Minister Vladimir Putin voiced hope that his country could join the World Trade Organization (WTO) next year, saying that he thinks it "is possible and our wish."

German Chancellor Angela Merkel chimed in with a similar view. "It is also desirable for us because of the G-20, with Russia being a member of the G-20," she told reporters in the capital on Friday evening.

"We would like to finally complete the Doha round of trade talks, and we would very much like to do this with Russia as a WTO member," she added.

Russia started its campaign to join the WTO in 1993 and is the last major economic power not to be a member.

Gently rebuffed

Russia still protects its industries with import tariffs

But Merkel was less enthusiastic about Russia's proposal for a free trade area from Lisbon to Vladivostok, which Putin had suggested in a guest editorial in the German daily Sueddeutsche Zeitung ahead of his visit.

Germany generally welcomes the idea of closer economic ties, but Merkel said a free trade area between Russia and the European Union was "more of a question for the future."

"We are neighbors and, just like in other areas, we will intensify our partnership step by step," she said and stressed that if there was to be a free trade zone, all of the countries would have to be members of the WTO.

But Merkel made it clear that she does not see Russia ever joining the eurozone, whereas Putin said he was "open" to such cooperation.

German sympathy

Gazprom stands to lose out under the EU's gas market liberalization plans

Merkel voiced sympathy for Russia's criticism of EU plans that would see infrastructure and distribution separated in the gas sector. Speaking to business leaders in Germany earlier in the day, Putin said the proposals amounted to "uncivilized robbery."

Under the plans, companies like Russia's gas monopoly Gazprom would have to sell its stake in overland pipelines in EU territory to allow smaller players access to the gas markets.

"During the negotiations [in the EU] Germany has never been a fan of that philosophy," she said and promised to argue Russia's case in Brussels.