Russian President Vladimir Putin held his ritual mega-press conference for Russian and international press outlets last Thursday. He touched numerous issues dealing with Ukraine and energy politics, especially due to proximity of Yushchenko’s visit to the Kremlin and continued controversy over gas relations between the two countries.
Putin calls Ukraine’s steps towards NATO un-democratic since they don’t follow public opinion, dismisses Poland’s concerns over the Nordstream pipeline and a resurgent Russia, praises Yushchenko’s cooperation on the Ukrainian gas issue, believes corruption to be the most pervasive problem he’s faced as president, decries the politicization of European and Russian energy deals, scoffs at claims of his immense wealth, claims to be prepared to hold the post of PM under Medvedev, and accepts Chechnya’s 99% voter turnout–99% of whom voted for United Russia–in the last elections as a legitimate expression of yearning for “stability.”
There are also some interesting responses on the Kosovo issue, as well as plenty of fluff–it was Valentines Day, after all–that I didn’t quote.
Following the break are some choice excerpts from the transcript (my emphasis added).
FOX NEWS CHANNEL, USA: My question concerns your words about retargeting nuclear missiles against Ukraine if Ukraine joins NATO or becomes part of the missile defence system. Condoleezza Rice called it yesterday deplorable and unacceptable rhetoric. Would you take back these words or comment on them? Also, does the fact that a Russian bomber made a low flight over the aircraft carrier Nimitz signify movement towards confrontation between the military in our countries?
VLADIMIR PUTIN: No, there is no confrontation on the horizon and I hope that there never will be…
Second, regarding the possibility of retargeting missiles, I will of course comment on this situation and I am grateful to you for raising this issue. We will not target our missiles against anyone unless there is the extreme need to do so.
Take a look at what kind of situation we are talking about.
I have no doubt that there are people among you today who would appeal to democracy, freedom and so on. Democracy is a universal concept and it cannot be local (that is, you cannot apply democratic principles in one place and forget about them entirely in another). If a country considers itself democratic it has to be democratic in every way, in every manifestation, both at home and on the international stage.
What is democracy? We all know that democracy is government by the people. Our American partners are looking to deploy elements of a missile defence system in Eastern Europe, a radar station in the Czech Republic, and interceptor missiles in Poland, and these plans look like they will indeed go ahead. But who asked the Czechs and the Poles if they actually want these systems on their soil? According to the information I have received, the vast majority of Czech citizens are not enthusiastic about these plans. Our General Staff and our experts think that this system represents a threat to our national security. If this system is established, we will be forced to make an appropriate response. In such a situation we probably would be forced to retarget our missiles against the sites that represent a threat. But it is not we who are creating these sites. We are asking that this not go ahead, but no one is listening. We are giving a clear warning right from the start that if you take this step this is the response you can expect from us. No one asked the Czechs’ opinion. It was simply decided to carry out these plans and that is that. Moreover, even NATO was not asked. Only after criticism came from Moscow did attempts begin to start coordinating this issue within NATO itself.
As for the situation in Ukraine, according to the information I have, the overwhelming majority of Ukrainians oppose joining NATO. But the Ukrainian leadership has nonetheless signed a certain document on starting the accession procedure. Is this democracy? Were the country’s citizens asked their opinion? But if this is the way things are being done, without anyone’s opinion being asked, then perhaps bases could also be established there in the future and missile defence system components deployed there. And what are we to do? In such a situation we would be obliged to target our missiles at these sites that we consider a threat to our national security. I think I have a duty to say this frankly and honestly today, so that no one in the future can try to offload the responsibility for such developments in events onto our heads. We do not want such developments in events. We are simply speaking honestly and clearly about the problems we see, that is all.
POLISH TELEVISION: What will happen to relations between Russia and Poland if elements of the missile defence system are deployed in Poland? And a second question: many Poles are worried about Russia’s return to superpower status, given the historical experience. What can you do to assure Poles that a powerful Russia is not a threat to countries such as Poland?
VLADIMIR PUTIN: I do not think that we should heap ashes on our heads and turn to self-flagellation in an attempt to prove to all how good we are. Russia is not behaving aggressively and is not fixated on the difficult moments in the history of our bilateral relations. Russia thinks that we need to look to the future and draw on the positive pages in our relations, and this way we can expect success.
Concerning relations with Poland in particular, I would like to point out that we have not taken a single step aimed at creating difficulties in the relations between our countries. We have made no such moves. Yes, we decided to build a gas pipeline across the Baltic Sea. I do not understand how this could offend Poland. This is our gas and we want to sell it to our main consumers in Europe. We already built a gas transport system across Polish territory. We carried out this work together and we pay the transit fees on time and supply Poland with all necessary energy resources without any restrictions whatsoever. There have not been any interruptions. Indeed, in previous years, based on the take-or-pay principle, our Polish partners ended up taking less gas that what they had contracted for, and in principle, Gazprom had the right to impose penalties, but we did not do this and looked for other solutions to the situation. In other words, there have been no restrictions and we will not impose any restrictions in the future. But our position is that we need to diversify our supply routes for delivering energy resources to our main consumers. What is bad about this? Is there anything anti-Polish here? Why such a reaction? Where does it come from? To be honest, I was really quite surprised…
STUDIA 1+1, UKRAINE: Have you gained a greater understanding of Ukraine and its actions following your meeting with our president, Viktor Yushchenko? What is your assessment of Russian-Ukrainian relations over these last eight years, and why do you think they have been so difficult?
VLADIMIR PUTIN: Yes, I have gained a greater understanding because Viktor Andreyevich [Yushchenko] and I had a very substantial discussion, and I say this without any irony. We took a very detailed and frank look at all of the different areas of our relations. It seems to me that Viktor Andreyevich also understood the motives for our behaviour regarding this or that issue. I think that our Ukrainian colleagues, including the President, seek a constructive dialogue with Russia and are ready to look for solutions to any problems. I would not dramatise the fact that problems do arise. We are each other’s closest neighbours and the relations between our countries are very extensive indeed. It is inevitable that problems sometimes arise. This has always been the case and always will be. The question is whether we want to find solutions or whether we decide to aggravate the situation. I have the impression that the Ukrainian leadership is committed to finding solutions to these problems.
As for the overall development of our relations over these last eight years, I think that we could have achieved more. There has been a lot of political froth in our relations. We have spent many years arguing about the gas transport system and Ukraine has very much politicised this issue.
In Ukraine, they don’t want us Russians to get our hands on the gas transport system, but we have already long since given up this idea. We just want the system to function normally. What we proposed was to establish an international consortium with the participation of European partners, and this consortium would raise resources (we are talking about billions of dollars) not just for the transport system’s technical maintenance but also for its development. The system itself, meanwhile, would remain the property of Ukraine. What is wrong with this proposal? The same goes for gas prices. We want to sell our gas at market prices but we are going about this in a calm and unhurried manner. We have decided to introduce market prices for energy resources on our domestic market too. Energy will still be cheaper on the Russian domestic market even so because we can subtract the export duties, transport costs and so on. But the principle is one and the same. I am very pleased to see that the Ukrainian leadership and above all President Yushchenko [as opposed to Tymoshenko, presumably. -HS] understand this. It was precisely with President Yushchenko that we succeeded in reaching an agreement a few years ago, and in Moscow he once again reaffirmed his position. I think that if the same constructive approach can be applied to resolving other problems then relations between Ukraine and the Russian Federation will most certainly be set to grow.
RIA NOVOSTI: Which of Russia’s problems have you found the most wearying and difficult to resolve over these last eight years?
VLADIMIR PUTIN: Corruption.
[Rather than asking a germane follow-up question about particularly corrupt areas or further clarification, RIA Novosti’s instead lobs a softball: “What about your work schedule, what has been the most tiring thing there?” Putin does go into possible steps to fight corruption when responding to a later question, though. -HS]
QUESTION [from a Finnish reporter]: We also listened carefully to your speech at the State Council. Could you be more precise about exactly what kind of conflicts and diplomatic policies smell of oil and gas? …
VLADIMIR PUTIN:…With regard to the fact that something smells of oil or gas. We know how, say, our American partners conduct a dialogue in Europe: they go to certain countries and urge them not to take our raw materials, or they try to find some new energy delivery routes that bypass Russian territory, and in this way to put pressure on these countries. This is already a political matter.
I think it is a bad policy, a stupid one – not just because it is unprofessional, but also because the politicisation of the issue masks things such as payments and other issues such as where to get the energy from. I have already said and Europeans are well aware of the fact that in the UK resources almost exhausted, and they are fast being depleted in Norway. Where should they come from? In Germany, for example, they have decided to gradually close nuclear power plants, and they do not want to develop coal either: too dirty. Gas is what is left. And where to get it? From Algeria, from Qatar, but their gas is mainly destined for the North American market since energy needs are predicted to grow there. No one is sure what will happen with Iran – there are constantly problems surrounding Iran. And every year Iran, say, breaks off its deliveries to Turkey, and we constantly compensate for these missing supplies, and did so this year as well. There were abnormally cold temperatures in Central Asia: we fixed this issue and no one even noticed. We did so without any noise or political showmanship.
The North Atlantic bloc is examining issues related to energy security based on the supposition that Russia is clearly unfriendly. We see this. Why is this? Have we ever breached our obligations? No.
Finland receives energy almost exclusively from Russia: about 70 per cent of its oil, I think, and about 90 per cent of its gas. And does Finland suffer from this? No, on the contrary. The Finnish economy has energy resources lined up for the long term future, for the coming years. This is stipulated in the contracts and well-executed. And I assure you that we will behave the same way with other European partners. But we would like ours to be an equal partnership. If someone wants to come to Russia, right to the heart of our economy, then let us into the heart of your economy! And then this would join our efforts: there will be a useful interdependence and this will guarantee the sustained development of our political and economic relations.
ASSOCIATED PRESS: Some newspapers wrote that you are the richest person in Europe [referring to alleged holdings in Gunvor, Surgutneftegaz, etc. popularized by Stanislav Belkovsky]. If this is true, what are the sources of your wealth?
VLADIMIR PUTIN: That is true. I am the richest person not only in Europe but in the whole world: I collect emotions and I am rich because the Russian people have entrusted me to the leadership of a great country such as Russia twice. I think that this is my biggest source of wealth.
With regard to the various rumours about my finances, I saw some papers that talked about this: it’s just chatter, which doesn’t need to be discussed, just rubbish. They just made it up and included it in their papers. That is how I see it.
VEDOMOSTI NEWSPAPER: I am now a little bit uncomfortable, but I wanted to ask about Ukraine.
VLADIMIR PUTIN: Why are you uncomfortable?
VEDOMOSTI NEWSPAPER: It turns out that Ukraine has demonstrated quite clearly that it wants to join NATO, to join the European Union. You recently met with Mr Yushchenko and held talks on gas. Russia has made quite a few concessions to Ukraine, accepted a lot of the proposals that Ukraine made, eliminated middlemen, and so on. Tell me, what concessions is Ukraine now ready to make?
I have one small question about state corporations. You already talked about this issue but I would like to clarify it: what do you think should be the life expectancy for state corporations in Russia and in what fields of the economy can they still operate?
VLADIMIR PUTIN: First of all I would like to say that we did not make any concessions. At the time, these intermediaries were established at the initiative of the Ukrainian side. For our side, Gazprom and Gazprombank were among the founders of these intermediaries. It was a clear and transparent situation. What happened to the Ukrainian side is not our business. We do not even know who is involved as intermediaries there. At some point in the past year they started to appear, we heard some names. I first heard of the existence of these people, and in principle this is not our business, but rather that of our Ukrainian partners. Now the Ukrainian side wants to get rid of them. Well, my goodness, go ahead – they should do so. We are ready to create new businesses with the same ratio of participation – 50 per cent – and let them clean up their side, we are not against this. Do not think that this is any concession.
With regard to the fact that we compensated the missing part of the gas, that was not a concession – it’s simply our good will. We signed a contract in 2006 and agreed that if there is a deficit of gas from Central Asia then Gazprom will cover this shortage but at Gazprom prices. That is what we did.
There was a problem again on the Ukrainian side between Naftogaz of Ukraine and these intermediaries, who are Ukrainian legal persons. This is not our problem and it is not our fault. We performed all our obligations: let the money go to the intermediaries and the intermediaries can give it to us. This is how they built relationships – I repeat, it was not us who built them, we are ready to work in Ukraine with direct contacts, not intermediaries. The Ukrainian leadership now declared that they are ready for such a regime and want it. And we also want this. That is the first thing.
Second. The Ukrainian leadership confirmed their readiness to further develop their relations in this sphere based on market principles. The only thing we insist on is that the amount delivered to Ukraine at the beginning of the year be calculated in Russian, Gazprom prices, rather than the so-called Central Asian prices.
But there is a dialogue here, there is understanding, and we can build a relationship in such a way that our interests are not affected. Our Ukrainian partners heard us – I hope that we will do the same, and we have agreed to do so.
What was the first part of the question?
ALEKSEI GROMOV: About state corporations.
VLADIMIR PUTIN: About state corporations – yes, this is an important issue, I agree. State corporations occur where and when there is a need for major long-term investments that private business is not yet ready to incur. First of all, of course we are talking about fundamental areas of the economy such as shipbuilding, aviation, the defence complex. We also have substantial public funds that we will invest in the Olympic facilities: there is a state corporation that is going to oversee building these facilities. This is understandable and justified, and some countries, which invested public resources there, did the same.
…[Nothing about Gazprom or Rosneft. -HS]…
And, in general, we will strive to ensure that within a few years after major investments by the state, once more technology is available and the capitalization of these companies increases, we will gradually list these companies on the stock market and make them part of a market economy. This includes selling their components, once these companies are established and competitive not only in Russia but also in international markets. It includes full privatization but, of course, on fair terms, and without prejudice to the state. This is our ultimate goal. In no case are we preparing for state capitalism.
IZVESTIA: The other day an influential American newspaper, The Wall Street Journal, literally wrote that Gazprom is continually cutting deeper into Europe [“Gazprom Drills Deeper into Europe,” -HS]. You have said many times that for Russia energy is not a political instrument yet not all believe this. Why not?…
VLADIMIR PUTIN: Regarding the fact that Gazprom is cutting into the flesh of Europe. Why Americans are so worried about Europe’s flesh I do not know. Maybe because they want it for themselves; it is a nice piece of flesh. With regards to teeth gnawing away at something. Exxon Mobil is biting into our economy and no problem, they have dentists that keep sharpening those teeth. Or Shell or BP. I think that BP is increasing its reserves thanks to the Russian Federation, thanks to our resources, and we do not fear this. Rather, we are going to expand cooperation. Yes, we take into account our interests but all major global companies, American and European ones, work in the Russian energy sector, and please, let them work.
There has been a lot of speculation and people were out of joint for a long time about the Shtokman [gas field]: will Russia use the opportunities of its partners or not? Yes, the subsurface remained Gazprom’s, but we attracted our Norwegian partners, French partners – Total will be there to work – and American companies (I already listed them) to this project, and they do so successfully: this is a multibillion dollar investment project. We have already started extraction and the work is on track. I regularly meet with the leadership of these companies and they are happy with how it is proceeding.
Our Chinese partners are working in Russia as are our Indian ones – people from around the world are working here. We have the German company E.ON participating in our electricity market and Eni came, and another major Italian company – and these are billions of dollars, multibillion dollar investments. We are not afraid, we are moving towards the scenario in which they are able to gain even controlling packages in some of our power structures. And why then are they so afraid of us? Why are they so cowardly, to put it simply?
It is true that the opportunities and economic power of Russian companies, of course, are growing. But our core consumers, especially in European countries, should only be glad of this. Gazprom’s market capitalization increased twenty-fold over these past years – by twenty times! It became one of the major companies in the world, its capitalization exceeded 350 billion dollars. How is this bad for its main consumers? This implies a steady company, more reliability. Gazprom does not require an exclusive status, it only requires cooperation between equals, and then we will come to an understanding with our partners. At times when our partners want to be shareholders of our large gas deposits and to work together, Gazprom says: «Give us the corresponding assets, money is not what is needed – in today’s economy paper is not what we need – we need assets». And is this bad? This is an honest, open position. We will continue to conduct ourselves in this way. And I am sure that there is no reason to be afraid. I want to reiterate: interdependence only strengthens reliability and predictability. [Gazprom-Ukraine interdependence, of course, not withstanding… -HS]
ALEKSEI GROMOV [the press conference MC]: Is the Wall Street Journal here? Please go ahead. It would be unfair not to give you the opportunity to ask a question.
VLADIMIR PUTIN: Yes, why do you need to frighten people?
WALL STREET JOURNAL: I hope that we don’t frighten people.
The question is not about dentistry, it’s about something else. If the elections take place and then, as you suggest, Dmitry Anatolyevich becomes president, and appoints you as Prime Minister, how would you see this position? It is rare in international politics that someone with a higher position goes to a lower one, and especially rare in the Russian tradition. Do you see this new position as transitional, to help during a transition period, or do you hope to work as long as your new boss likes your work?
VLADIMIR PUTIN: You know, the position of Prime Minister of the Russian government could not be a transitional. It provides an opportunity for self-realization and to achieve very large goals which stand before the country. And if this happens, then of course I will work with the same outcome as if I were working as President of the Russian Federation. That’s it. Or was there something else?
QUESTION: And the timing?
VLADIMIR PUTIN: With regards to timing, as long as Dmitry Anatolyevich will work as President. And if I see that I am achieving the goals that I recently set myself when speaking at an expanded State Council meeting – the same goals that I set myself – if I see that I can realize these goals in this position, then I will work as long as this is possible. And I think that there could be no other answer. And what answer would you like? I formulated the objectives for the development of Russia from 2010 to 2020. My fate is such that I have the opportunity to take part in achieving these goals. I need only to be glad of this and work.
LE FIGARO: At the parliamentary elections the United Russia party list you headed received 99 per cent of the vote in Chechnya, with a 99 per cent turnout. There were similar results in Ingushetia. Do you think that these are real figures? And what do you think, will Dmitry Medvedev repeat these results in March? [Not exactly energy-related, but a very good question I think — and illustrative answer… -HS]
VLADIMIR PUTIN: Who among us is from Chechnya? Here is a colleague from Chechnya. Do you think this was the real outcome of the elections in Chechnya?
FROM THE HALL: I think anyone who has been in the Chechen Republic since United Russia led parliament probably knows for himself exactly what the party is doing in the republic. There are dramatic changes in the economy, the social sphere, with respect to the restoration of infrastructure, and housing. These are absolutely authentic figures. Personally, all my acquaintances, including myself, voted for United Russia, primarily because we want stability. [Stabilnost’ didn’t work quite as well for the Party of Regions in Ukraine… -HS]
VLADIMIR PUTIN: Yes. You know, I share the opinion of your colleague. After all, people are tired. The civil war lasted almost a decade and people finally saw the light at the end of the tunnel: they realized that they are being treated with respect and that their interests are being taken into account. And federal authorities finally stopped just talking and actually made real investments into rebuilding social infrastructure and the economy.
When I first came to the Chechen Republic in 1999 we met with the locals in a school. There was not even a place to sit. They told me that even the children bring chairs with them to school. And this in the context of the constant threat of international terrorism. Indeed, it developed so that the Chechen people themselves were being kidnapped. That had never happened before in the previous decades and even centuries. They started to make money by kidnapping members of their own, Chechen people! Two thousand people were sold on the Grozny market! Sold like cattle! But people are tired of this situation. So I fully believe that these are objective figures that concern a political force which people associate with the revival of the republic.
Can Dmitry Medvedev count on the same figures? I do not know, let’s see.
…QUESTION [from a reporter from Ingushetia]: First, if you will permit me, I would like to say literally just a couple of words to our colleague from the distinguished Figaro newspaper. I just want to say two words. Our troubles in the region begin when outsiders start to meddle in our internal affairs, including people from abroad. With regard to the election results. I do not work for the electoral commission, but I can say something about the results. Speaking for myself as a voter and for my family, another ten voters or so, we all voted, and we voted for the incumbent President Vladimir Vladimirovich Putin.