Press Conferences

31 may, 2008 15:00

Prime Minister Vladimir Putin gave an interview to the French newspaper Le Monde

Prime Minister Vladimir Putin gave an interview to the French newspaper Le Monde
"Russia is a Presidential Republic. And we do not intend to depart from the key role of the head of state in the political system in our country. But the fact that I have become the head of Government is, of course, a curious fact in our political history."
Vladimir Putin
Interview to the French newspaper Le Monde

Question (as translated): This is your first visit to France, your first foreign trip in your capacity as Russia's Prime Minister. Your dinner with Nicolas Sarkozy is a somewhat unusual format in terms of protocol. Does it indicate a certain ambiguity as to who runs Russia's foreign policy, you or Mr Medvedev?

Vladimir Putin: There is no ambiguity other than that politicians are in the business of performing certain functions under contract and at the same time they are human beings. Mr Sarkozy and I became acquainted when I was President of the Russian Federation, and we developed a very good personal relationship. When the decision was being made about what I would do after I was relieved of my presidential duties and he asked me about it, I told him that I did not know yet, that I had not yet made up my mind. He told me: "In any case I will be glad to see you in Paris. And in your new capacity promise me that your first foreign trip will be to Paris." I did just that.

As for the business part, we mainly talked, of course, with Mr Fillon. We discussed above all trade and economic links, but to varying degrees the President and I also touched upon our economic relations. Of course, the President is the country's leader and he spoke also about our relations in the sphere of politics and defence and about international relations. Yours truly, of course, today deals mainly with economic and social issues, but as a member of the Russian Security Council I am certainly involved with the issues that we discussed with the French President.

As for the distribution of authority within Russia, of course, the President has the final say. And the Russian President today is Mr Medvedev.

Question: You met with Jacques Chirac today. Is it just that he is your friend or is there more to it than that?

Vladimir Putin: There is no special interest. Mr Chirac and I worked together for many years. He is very fond of Russia, and has a deep knowledge of the country. I share his view that not only the past, but also the future of Russia and Europe, Russia and France can and must play a significant role in world affairs. This is what brings us together. Besides, Jacques is a charming man and a brilliant interlocutor. Without exaggeration, he is a man of encyclopedic knowledge. Working in the framework of the G8 and meeting with my colleagues, I could see even then that he was always at the focus of attention. He always has his own opinion, a well-grounded opinion on many issues of the development of civilisations and the present world. I greatly enjoy his company. And because he has made a big contribution to Russian-French relations, President Medvedev has signed a decree to award him the State Prize of the Russian Federation. We hope that on Russia Day, June 12, which is our national holiday, he will come to the Kremlin so that the Russian President could present the award to him.

Question: The system of power in Russia today operates as a twin structure. Is it a temporary solution or do you want the Russian Prime Minister in the future to become something like the German Chancellor?

Vladimir Putin: As you know, Russia is a Presidential Republic. And we do not intend to depart from the key role of the head of state in the political system in our country. But the fact that I have become the head of Government is, of course, a curious fact in our political history. Perhaps even more importantly, I have simultaneously become the head of the party which occupies the leading position in the country's political life and has a solid majority in Parliament. This certainly indicates that Russia is paying more attention to the multi-party system and the growing influence of the Parliament in the country's political life. This is a very important political signal.

Question: When the handover of power was taking place you spoke about long-term plans for Russia's development in the next 10-20 years. Dmitry Medvedev spoke in a similar vein. Can anything happen that would induce you to leave your post in a year, two or three years?

Vladimir Putin: Nicolas (Sarkozy) and I talked yesterday and he told me about his plans to modernise France. He is completely preoccupied with this idea. He is a very sincere man. He sincerely wants to change a great deal in his country to benefit the French people. These are not always decisions that yield a positive effect in the short term. Some of these decisions will not bring a positive result until several years from now. When such decisions are taken they always trigger a debate in society. I must say that Russia too faces decisions aimed at modernising many areas of our life. I am not just talking about the economy, which we must try to steer along the road of innovation, and we are discussing that actively. By the way, many things are already being done. But we must change, for example, the system of wages in the public sector. We must introduce a sectoral wage system. We must modernise our pension system to guarantee a dignified old age and decent incomes for our citizens. We must enhance the replacement ratio, i.e. the size of the pension must match the level of wages that a person earned throughout his life. We must modernise agriculture. Russia faces many challenges. We intend to be absolutely honest with our country's citizens. We are not going to engage in politicking. If we are able to do what we plan and if our actions are successful, it won't matter very much how responsibility is distributed in the top echelons. It is important that we achieve our common goals. Today Russia has an effective professional team of experts and politicians in Parliament who support us. We will try to make this unity last as long as possible. As for the distribution of roles and ambitions, this is not a primary but a secondary issue.

Question: Mr Prime Minister, as a result of modernisation Russia has witnessed undoubted economic success in recent years. To what extent is that success the result of high oil prices and what has been your personal role?

Vladimir Putin: As for my personal role, I would rather not give any assessments. I don't want to assess my own work in the previous years though I do believe that I have worked hard and honestly, and a great deal has been accomplished, from the restoration of the country's territorial integrity and constitutional legality to the high rate of economic growth and reduction of poverty in Russia.

As for the role of prices and the world markets, of course, it has been a positive factor. Without doubt, it is a noticeable and important factor. At the same time I would like to stress that in the past, in the Soviet times, there were also periods of high oil prices. However, all that was "frittered away". All the money was wasted and the economic effect was nil. And even in our most recent history, I would like to remind you that oil prices began to rise in 2004, and yet our economy registered a record 10% annual growth back in 2000. It was the biggest growth, and it was not in any way connected with the price of oil.

In previous years we made decisions in the tax sphere and in administration with a view to ensuring above all the growth of the manufacturing industry, ensuring innovation in the Russian economy, and this is our main task. I think we are already achieving certain results. How are they manifested? The manufacturing industries already account for a bigger share of the GDP growth than the extractive industries.

Having said that, I think what is happening today is not enough. I said so recently and publicly at a Cabinet meeting. We are looking to an innovation-driven economy, and yet the innovation part of the economy does not get nearly enough attention in the Government plans for the next five years. It just shows that we are focusing attention on these problems and will work to solve them.

Question: Isn't there a contradiction between the fact that you seek innovation and at the same time assign a greater role to the state in the economy, for example, what we have seen in Russia in recent years, when the Government gained control of strategic sectors, such as the oil sector. Today we see that oil production is stagnating. Isn't it an adverse factor that the Government is playing an increasing role in the economy? Isn't it, perhaps, counterproductive?

Vladimir Putin: No, no, you've got it all wrong. You have mentioned the oil sector of the economy. You have a mistaken idea of what is happening in the Russian oil industry. Production indeed has not grown over the past year, or has grown very little. That is true. But that is not because the Government is taking on some kind of controlling function.

I would like to draw your attention to several factors. First, Russia is not a member of OPEC. Second, many oil-producing countries, the majority of them, have oil industries that are entirely state-owned. And thirdly, the Russian oil and gas sector is mostly owned by private capital. All the global companies are working in the Russian oil sector, including European and French companies, such as Gaz de France and Total. And they are exploiting major fields. Yes, we have done something to support the companies in which state is represented, in which it has the controlling stake. For example, Gazprom or Rosneft. But for the rest - and we have a dozen major companies - it is the private sector, including companies with foreign capital. British, American, Indian, Chinese, French and German companies are working there. Our energy sector in general is far more liberal than many such sectors even in Europe.

We are completing a major reform of the energy industry. As of July 1 this year our biggest electricity company, RAO United Energy Systems of Russia, will cease to exist. Several big companies, which were formerly parts of that company, will become independent. And the generating capacity, not only individual power stations but groups of power stations, will be offered for sale to private investors. Major European players are coming here: ENI from Italy, the German companies which will invest six, eight, ten, twelve billion dollars and euros. That is billions in investments. Note that not many European countries have the same liberal approach. Russian investors are still barred from such projects. But we are doing it. So it is absolutely wrong to say that our energy sector, including the hydrocarbons sector, is closed to foreigners.

But that sector of the economy has its problems. What are they? When energy companies, above all oil and gas companies, started to enjoy windfall profits because of the growing energy prices, the Government decided to channel these super profits into the budget of the Russian Federation through several instruments, including export customs duties and the severance tax. Now we have discovered that it is becoming excessive, that the money the oil companies keep is not enough for them to pursue geological prospecting, to renew and expand production, to use uneconomic, low-yield oil wells. So we are making decisions, in fact we have already decided to cut the severance rate. We count on the positive effect and we are sure that production will grow in Russia in the next few years. We have introduced a preferential regime for new fields, including offshore fields in the northern seas and in Eastern Siberia where the infrastructure is lacking.

I have no doubt that this sector of the Russian economy will develop vigorously in the coming years.

Question: Foreign companies sometimes face problems. Don't you think that it may eventually scare investors off? Especially after what happened to TNK-BP, Shell and so on?

Vladimir Putin: As for TNK-BP, nothing has happened yet. They have problems with their Russian partners and I warned them several years ago that such problems would arise. It is not because it is TNK-BP. The thing is that several years ago they created a joint venture on a 50:50 basis and when they were doing it I was present at the signing of the documents and I told them: "Don't do this. Agree between yourselves who will hold the controlling stake. And we do not mind if it is BP. We will also back you if it is the Russian part of your joint venture, the Russian company TNK. But there must be one boss, and when the powers are not clearly defined such an entity is bound to have problems."

They told me: "No, no, we will come to an arrangement." I told them: "Well, go ahead and work out your arrangement." And here is the result. They have constant friction as to who the boss is. This is the crux of the matter. The main problem is commercial disputes within the company.

As for Shell, we have settled our problems with them and we hope that no such problems will arise in the future. They should not arise because our partners must know that the colonial method of exploiting Russian resources has no chance.

Question: Aren't you afraid that inflation will become a destabilising factor in Russian society and will provide a strong argument for your political opponents?

Vladimir Putin: No, we are not afraid of that for many reasons.

First, we are aware of the negative effects of inflation, and we are taking and will continue to take the necessary measures to deal with this problem. Inflation did not arise inside the country. Inflation has been exported to Russia by developed economies, including from Europe. It is connected with the unwarranted rapid growth of world food prices. But I don't want to discuss the causes now. Experts know that it is due to the growing consumption in China and India. It is also due to the big emphasis on alternative fuels, when a large share of grain crops - rapeseed, maize and cereals - is used to produce bio-fuel. It is also connected with the great influx of investments into Russia. While previously there was an outflow of capital - up to $20-25 billion a year flowing out of Russia - last year we had an inflow of foreign currency equivalent to $81 billion. These are petrodollars, investments that come to us, plus the petrodollars of our companies. The Central Bank accumulates that money. It has to print roubles and release them into the economy. And there are other factors. We see them, we are aware of them, we can analyse them objectively and take the necessary measures to neutralise these threats. But above all we should develop our own agricultural production. Of course, we will have to use customs regulations to secure the necessary amount of grain for our own needs. We will ensure the import of the amount of food we need. We will use traditional instruments to combat inflation, the instruments that are used in all other countries.

For example, just lately our Central Bank raised the refinancing rate to 10.5% and increased capital requirements in the hope that it would yield a positive effect and limit the money supply flowing into the economy. We will do it.

As for the social factor, we understand that growing prices, in the first place food prices, hit those groups of the population, those of the country's citizens, who have the lowest incomes because they spend the bigger part of their family budgets on food. They are the hardest hit. By raising wages, pensions, allowances and subsidies we will try to minimise the negative impact on these groups as we fight inflation. We realise that it means an inflow of money into the economy, into the country, but it is our duty to do it for the sake of our citizens. And we will do it.

Question: If President Medvedev asked your opinion about easing the conditions in which Mikhail Khodorkovsky is kept or about reducing his prison term, what would you say?

Vladimir Putin: I would say that it is a decision he would have to make himself. But in any case, he must be guided by Russian law just as I was when I was President. Mr Medvedev, like myself, graduated from the Law Department of St Petersburg University. We had very good teachers who administered a very potent "vaccine" to us that makes us respect the law. I have known Mr Medvedev for many years. He will respect the law. By the way, he has spoken about it publicly several times. If the law permits it, I see no obstacles. Everything depends on the concrete situation and on how these legal procedures go.

Question: Do the conditions in which prisoners are kept depend on the administration? On the prisoner?

Vladimir Putin: Yes, of course, they depend on the administration. It's the same as in your country. Who else can they depend on? On the prisoners themselves?

Question: Well, I mean, does the law allow their conditions to be improved?

Vladimir Putin: Yes, it does. But for this to happen the persons who are in custody must comply with the law.

Question: Mr Prime Minister, you often say that Russia shares European values. But on the other hand, we see that Russia has yet to adopt the concept of competition, both in economics and in politics. How do you account for this contradiction?

Vladimir Putin: I see no contradiction there. Competition is a struggle. If one side gains an edge, if one side scores a victory in the course of this battle, it means there is competition.

As regards the economy. Yes, in any country economic agents try to be closer to the Government in order to gain a competitive advantage. Your colleague mentioned one of the "captains" of the Russian economy, of the oil industry. There was a time when these people were refused entry to the United States, they were refused visas because they were thought to have links with the mafia. Today you are asking me how to ease their conditions in prison. Isn't that a clear case of double standards? Isn't that a quest for some privileges, including in the economic sphere? Such a struggle has always existed and will probably always exist. Russia is not a unique case. For our part, in recent years we have tried to keep all business representatives at an equal distance from the Government. I think that on the whole we are succeeding.

Voice: Perhaps the whole point is that Mikhail Khodorkovsky travelled to America too often and that he did have a visa...

Vladimir Putin: He got a visa eventually. But we have businessmen who are still denied visas. Mr Deripaska, for example. I have asked my American colleagues, why don't you give him a visa? Can you explain it to me? If you have grounds for denying him a visa, if you have evidence that he has violated the law, give us that evidence and we will use it inside the country. But they are not giving us anything. They are not giving any explanations. But they deny him entry. He is not a friend or relative of mine. He is a representative of Russian big business. He has commercial affairs, multibillion affairs in many countries round the world. Why is he restricted in his travels? What has he done wrong? If he has, show us, if you have nothing to show, then lift the restrictions.

As for Khodorkovsky, it is not that he travelled abroad. The point is that he broke the law. He flagrantly broke the law many times. In fact, some members of the group of which he was part are charged with crimes against the individual, and not only economic crimes, and the court has proved it. They have committed murders, multiple murders. Such methods of competition are inadmissible. And of course we will do everything to stop it.

Question: One gets the impression that it is common practice. For instance, Mr Browder, who heads the Hermitage Investment Fund, is not allowed to return to Russia.

Vladimir Putin: It is the first time I hear that name. I don't know who Mr Browder is or why, as you have said, he cannot come to Russia. I can make no comments because I don't know anything about it. Well, Russia is a big country. Complications can arise. There may be conflicts with the authorities, conflicts in business or personal conflicts. But this is life, it is complex and diverse. If a person thinks his rights have been infringed upon let him go to court. We have an effective court system. By the way, a journalist was recently charged with taking more currency across the border than the law allows. A criminal case against her was initiated. I think she is serving a sentence somewhere in your country. Am I right?

I had been approached about it. I said: Let her come. Let her go to court and defend her case. But she was afraid to come. Now the Constitutional Court has ruled that she broke the law, but she will not be prosecuted. Such cases should be treated as part of the administrative process. By the way, this is a sign that the judicial system in Russia is effective.

Question: Some observers and even Russians themselves often find it difficult to give a definition of the Russian Federation's political system. What is it? A dictatorship, a totalitarian system, a democracy? Do you have a feeling that you have invented a system, and what that system should be like?

Vladimir Putin: We are not inventing anything. We are developing our country according to the principles and criteria that have become established in the world, in the civilised world, and that can be applied to our reality, with due respect for our history, including the political history, the political culture of the Russian Federation, and our traditions. We will continue to act in this manner in the future.

We have mentioned the judicial system which, in spite of all the flaws and abuses - and there are probably a lot of them - is growing stronger and is effective. I can say the same about multi-party politics. A multi-party system is not about having a thousand parties which are unable to organise the political process and whose activities, whose work and ambitions undermine the state. I think a multi-party system implies large groups of people representing the interests of various groups of the population that can effectively function and, in the course of political struggle, civilised struggle among themselves, work out solutions that meet the interests of the majority of the country's population. We have done a great deal to strengthen the parliamentary system and the multi-party system. Finally, in recent years we have taken some very practical steps, which have been sealed in law, to transfer some federal powers to the regional and municipal level. We have decentralised power and in fact delegated part of these authorities and the financial resources to the regions. Without the municipal component there can be no normal civilised democratic society. We are aware of it and we are working towards that end.

Of course, we have to make sure that our steps are realistic and improve the situation in the country. But there are certain traditions. Take Lebanon, for example. In Lebanon various groups of the population must be represented in Government. We have the same here. For example, in the Caucasus, in the Republic of Dagestan. There are several separate peoples living there. Traditionally, if a representative of one ethnic group is the head of the republic, the Speaker of the Parliament should be a representative of a different group. And the Government should be headed by a representative of a third nationality. And nobody can violate that hierarchy. It would be rejected by public opinion. If that tradition is broken, it will trigger a destructive process. One may, of course, strike an attitude and say: "Oh, how undemocratic, oh, how terrible. They should elect the President of the Republic by secret ballot." But that would tear the republic apart, and I cannot allow that. I have to consider all aspects of the situation and I will consider the opinion of the people who have lived in that territory for a thousand years. I will respect their choice, and will respect the way they go about building their lives. These are things that may not be visible to you here, but they exist and we are aware of them. We must and we will take them into account. But for all that, we will, of course, move towards the mainstream of the world's civilisation processes.

Question: You have described the work of the Russian judiciary system and the courts as good?

Vladimir Putin: I didn't say that. I said that in spite of all the problems that exist, the judiciary system is developing and proving to be viable. A lot still needs to be done for the system to work 100% for the people's benefit. I don't know if that can be achieved, or if there is an absolutely perfect system anywhere. But we don't have any other.

Question: You have mentioned the situation in Dagestan and its characteristic features. There are different ethnic groups that live in a small area in the Caucasus. We can see that the situation in Chechnya has normalised in recent years. But it looks as if the situation in Ingushetia and Dagestan has deteriorated significantly. As Prime Minister, what is your analysis of the problems in these two regions?

Vladimir Putin: The situation in the Chechen Republic has indeed improved. This is due to several factors. Chief among them is that the Chechen people have themselves made a choice. Their choice is for their republic to remain part of the Russian Federation. We see it and we are aware of it.

We have seen the reaction of the Chechen people to attempts to inculcate the local population to the forms of Islam that are not traditional for them. That is how it all started. Wahhabism, in its original form is a movement within Islam and there is nothing terrible about it. But there are extremist currents within Wahhabism. Attempts were made to implant these currents in the consciousness of the Chechen people. The people realised that there was somebody from the outside who was not fighting for their interests but was trying to use them as an instrument to "rock" the Russian Federation as an important and significant player in the world arena. They also realised that it was bringing nothing but suffering to the Chechen people. The awareness of that fact was the basis of stabilisation. It started with this awareness.

And this became a fact of life when we, realising that public sentiment had changed, transferred responsibility, both in the law enforcement sphere and in the economy, to the Chechens themselves. You see, it was hard to imagine that the former Defence Minister in Maskhadov's Government would be a member of the Chechen Parliament today. Yet it is a fact. And that created the political prerequisites for the reconstruction of Grozny, for taking priority steps in the economic sphere.

As for Dagestan and Ingushetia, of course, we are aware of what is happening there. There are conflicting interests there, but these clashes are economic rather than political. They do not involve any separatist movement; it is an internal political struggle.

What is the priority for the Caucasus as a whole and for the republics that you have mentioned? Above all, it is the restoration of social and economic balance. A lot of people there live below the poverty line. People suffer from unemployment more than anything else. That mostly concerns young people. We have adopted a programme for the development of Southern Russia. Of course, we are talking above all about the republics of the North Caucasus. That programme envisages considerable funding for the development of the economy and the social sphere. I expect that we will see success in this area as in many others.

Question: One more question about the Caucasus. Chechnya, the tragic events in Beslan, the Nord-Ost - these are all "dark pages" of your Presidency. Do you think today that you could have acted differently and that the problem could have been handled in a different way?

Vladimir Putin: No, I do not. I am sure that if we had tried to go about it differently, all these problems would have continued. One might have expected our special units and special services to act more effectively, but it is obvious that we should have stopped these attempts to destabilise the situation in Russia. Any country, as soon as it makes concessions to terrorists, ultimately suffers greater losses than those that are incurred in the course of special operations. In the long run it destroys the state and increases the number of victims.

Question: But in addition to counterterrorism, human rights groups speak about a series of crimes. Many of these crimes were committed against civilians in Chechnya. Can light be shed on these crimes in Chechnya today? Do you believe it is possible to conduct investigations into the actions of the Russian special services and the Chechen authorities? Do you believe that these investigations are possible and that sooner or later these issues will become public?

Vladimir Putin: More than that, I can tell you that the courts and the Prosecutor's Office are working actively in the Chechen Republic. Such investigations are underway. People are prosecuted if they have committed crimes, regardless of what their motives were and where they had worked or served. That applies to former militants and to Russian servicemen alike. It is not just possible in the future, as you have suggested, it is possible today.

Courts have already declared some officials guilty of crimes when they were officers of federal bodies of power, officers of our army. They are in jail. And I must tell you that it was not an easy decision for our courts, because in spite of the crimes they had committed, juries repeatedly acquitted them. This speaks volumes about the sentiments in Russian society, especially after the atrocities the terrorists perpetrated against our civilians. But I personally am convinced that if we want to restore order and peace, we should not allow anyone to step over the line and break the law.

Question: What do you expect from the French Presidency of the European Union? What is the outlook for relations with Russia?

Vladimir Putin: France is our traditional, reliable partner. We have always talked about a strategic partnership between France and Russia. I agree with that definition. France has pursued, and I hope will continue to pursue, an independent foreign policy. I think it is part of French character, and it is hard to impose anything on the French people from the outside. Any French leader must take that into account. We can observe this spirit of independence today. We set great store by it. That is why we expect a great deal from the French Presidency of the European Union. Above all, we look forward to a constructive dialogue aimed at creating the necessary legal framework for our interaction with the European Union. I am speaking of the fundamental Partnership and Cooperation Agreement for our relations. As you know, the previous agreement has expired. This does not create a legal vacuum because the procedure envisages that we can extend it every year, but it needs to be updated. We have said repeatedly that we are interested in signing that agreement. But I think our European partners are as interested in it as we are. So, I expect that the French Presidency will bring new opportunities for our relations and will encourage us to work jointly on the basis of mutual interests.

Question: One of the issues that concern the world is the Iranian nuclear problem. Do you believe that the Iranians are trying to build a nuclear bomb? Did you discuss it with Nicolas Sarkozy yesterday?

Vladimir Putin: Yes, we touched on that problem. I don't believe that the Iranians seek to create a nuclear bomb. We have no grounds for thinking so. Iranians are a proud nation, an independent people. They seek to exercise their legitimate rights in the sphere of peaceful nuclear technologies. And I have to say that from a formal, legal point of view Iran has not yet violated any rules. It has the right to enrich uranium. You only have to look in the documents to see it. There are, or rather, there used to be, certain claims against Iran because it did not disclose all its programmes to the IAEA. We need to deal with that once and for all. But on the whole Iran has opened its nuclear programmes. I repeat: from the formal, legal point of view no claims can be laid against it.

However, I have always told our Iranian partners frankly and honestly: We believe that Iran does not exist in a vacuum; it is located in a very complicated and explosive region of the world. And we ask our Iranian partners to bear that in mind, and not to irritate their neighbours and the world community, but to take steps that would convince the world that Iranian leadership does not have any hidden agenda. We have worked very hard in concert up until now both with the Iranian side and with our partners within "the Six". We will continue to work in this direction.

Question: Do you think they could convince Nicolas Sarkozy that they have no military programme?
Vladimir Putin: I did not set myself such a task during this meeting. I assure you the French President is at least as well informed as the Russian President, especially the former Russian President. We did not discuss that part of the problem. We merely said that it exists and that we need to work together to solve it.

Question: If one day you learned that the Iranians are indeed bent on making a bomb, would that become a problem for Russia?

Vladimir Putin: "If" is the subjunctive mood, and politics has no use for it. When we get such information we will consider the question.

Question: Regarding principles: Do you believe that Iran can claim the right to have its own military nuclear programme?

Vladimir Putin: We are against it. This is our fundamental stand. We are against the spread of weapons of mass destructive in the world. We believe it is an extremely dangerous trend. Most importantly, it is not in the interests of the region or of Iran, principally because using nuclear weapons in such a small region is nothing short of a suicide. In whose interests can nuclear weapons be used, in the interests of Palestine? But then Palestinians would cease to exist.

We all remember what the Chernobyl tragedy was like. It is enough for the wind to change direction and it is the end. For whose sake is it being done? We believe it is counterproductive. We have always adhered to this position and I hope that this will be President Medvedev's position. We will do all we can to prevent the proliferation of nuclear weapons. That is why we offered an international uranium enrichment programme, because Iran is only one part of the problem. Many "threshold" countries face the choice of using nuclear energy for peaceful purposes. That means they will need enriched uranium. If they need enriched uranium and create their own closed cycle for the purpose, there will always be a suspicion that they want to enrich it further to get weapons-grade uranium. It is not easy to control. That is why we have proposed that enrichment takes place in the countries which raise no such suspicions, because they already possess nuclear weapons. But the countries involved in the process would have a total guarantee that they will get the necessary amount of enriched uranium and that spent nuclear fuel will be taken from them for reprocessing. Such a system can be put in place. It will be reliable and safe.

Question: Does the accession of Georgia and Ukraine to NATO pose a threat to Russia?

Vladimir Putin: We need to bear in mind several considerations. First of all, we are against NATO's expansion in general, in principle. Let us think back to 1949 and Article 5 of the Washington Treaty on Collective Security. What was its purpose? Defence in the confrontation with the Soviet Union. It was set up to defend against an aggression which some people thought was possible. The Soviet Union maintained it was not going to attack anyone. The Western countries said the opposite, but in any case the purpose was defence against the Soviet Union. The Soviet Union no longer exists, such a threat no longer exists, but the organisation has remained. The question arises: against whom is this alliance directed? What is it for? All right, some argue that NATO must fight modern threats. And what are the modern global threats? Non-proliferation of nuclear weapons, we have just talked about it. There is terrorism, epidemics and international crime, and drug trafficking. Can this be done in the framework of an exclusive military-political bloc? No, it cannot. Such tasks cannot be effectively tackled within a closed military-political bloc. They must and can be solved only on the basis of broad cooperation proceeding not from bloc mentality, but from global considerations, in an open, honest joint struggle against these threats. So, the expansion of the bloc will only create new borders in Europe and new Berlin Walls, this time invisible walls, but equally dangerous. That limits the potential of joint effective efforts to combat the common modern threats because it breeds mutual mistrust. It is a hindrance. That is the first consideration.

In addition, there is a second and no less important consideration for us. We know how NATO makes its decisions. Military political blocs limit the sovereignty of all their member countries. A barrack-room "internal block discipline" takes hold. Decisions are first made, and we know that they are made by one of the leading countries in the bloc, and then they are legitimised. They are then packaged as multilateral initiatives. A case in point was the decision on missile defence systems. First a decision was made and afterwards it was discussed in Brussels, and even that was essentially due to our pressure and criticism. We fear that if these countries become NATO members today, tomorrow they may host missile strike systems that will threaten us. Nobody will ask for their permission. They will just be deployed there. And what would we do then?

We constantly speak about arms reductions in Europe. But while the Western countries have been talking about it, we have done it in practice. In return we got two military bases next door. And we will shortly get another position area in Poland and the Czech Republic. So, in these matters, as Otto Bismarck used to say, "what matters is not good intentions and statements, but potentials." We see that the military infrastructure is moving closer to our borders. Why is that? Nobody is threatening anyone.

Finally, the last consideration: Here we have discussed the question of democracy. It is something we should always keep in mind. Leaders bear a great responsibility in this respect. But doesn't it also apply to the sphere of international relations? Is it right to be an angel at home, a democrat inside your own country and a monster to the rest of the world? We are talking about democracy. What is democracy? It is rule by the people and for the people. In Ukraine all the opinion polls show that nearly 80% of the population do not want their country to join NATO. Yet our partners say that Ukraine will be a NATO member. Is it possible that all the decisions have been made in advance on behalf of the Ukrainians? Doesn't their opinion interest anyone? And you are telling me that this is democracy?

Voice: Why hasn't Russia abolished the death penalty?

Vladimir Putin: ...such political issues are best addressed through a referendum. People should be asked whether they want it or not. This approach does not seem to apply to social issues such as the death penalty.

Let me tell you something regarding the death penalty. We often hear that in the dialogue with Russia the civilised Western nations must bear in mind that they should choose their allies proceeding from shared values. We have recalled the tragic events in the Caucasus several years ago. That's over. But even in the midst of what amounted to a civil war we abolished the death penalty in Russia. It was a difficult, but a responsible decision. If this is not adherence to shared values, what is? And yet some G8 countries and, incidentally, NATO countries have the death penalty. Executions are taking place to this day. Is it not about shared values? And yet it does not prevent these countries from being members of NATO and the G8. Why are they so selective with regard to Russia? Is it the case that what is allowed to Caesar is not allowed to somebody else? Such a dialogue cannot be productive. We should open our cards and treat each other with honesty and respect. And then we can reach many of the goals that we have not been able to reach so far.

Question: Concerning Russian-American relations, you have contradictions, including on the issue of NATO enlargement. You have other differences with Washington: over Iran's nuclear programme, Kosovo and the war in Iraq. So, what are the results of George W. Bush's policy and what is the current state of your relations with the United States?

Vladimir Putin: With your permission I will not give an assessment of George Bush's record because I don't think I have the right to do so. It should be assessed by the American people. I have my own opinion about it. I think the President of the United States shoulders enormous responsibility because the United States carries a great load in international affairs and in the world economy. It is always easy to criticise from the outside. But we have always had our own position on many problems and on very many issues. We do have different approaches to certain problems. But we are not unique in that way. France, I believe, has a position on Iraq that is close to ours. And indeed, whatever one might say, initially the European countries, Germany and France, took a certain position on Iraq. We joined them later, and not the other way around. True, we had a certain view from the beginning. But Germany and France were the first to make their position public. We joined that position later. As you remember there was a lot of talk that we had taken a wrong stand. However, experience has put everything into place and demonstrated that such problems cannot be solved by force. That is impossible. There can be no monopoly in world affairs. There cannot be a single structure in the world. There cannot be one master. No empires can exist today.

Such issues can only be effectively tackled on a multilateral basis, only on the basis of international law. The strong fist approach cannot be effective because if one continues to act in this way, the number of conflicts will be so great that no single power will have the resources to resolve them.

Regarding our relations with the United States, there are many more positive elements in our affairs than there are spheres in which we have differences. First, our mutual trade is growing constantly year in and year out. The economy is developing. That is one thing. We have many similar interests in world affairs, and above all regarding the threat of nuclear proliferation. We see entirely eye to eye on that.

The fight against terror. It is often hidden from the public eye, but it is becoming more and more effective. George and I recently met in Sochi and I had a chance to brief him and even thank him for the cooperation of our special services in the war on terror. It is concrete and tangible.

You said that we have differences over Iran. We do not have particular differences. We have been working together at the Security Council and within "the Six", and the Security Council has been voting for these resolutions unanimously. I would remind you, however, that under Article 41, Chapter 7 of the United Nations Charter what we have been doing up until now does not mean that the use of force is possible. Of course, we hear different points of view coming from Washington. But thank God, it has not yet come to the use of force. We hope that it won't happen. On the whole, we understand that we must solve this problem together. So, yes, we have differences, but the overall atmosphere of interaction, and I would even say, elements of trust are such as to warrant an optimistic view of the future of our interaction.

By the way, this enabled us to sign a declaration on cooperation in the longer term during the US President's last visit to our country in Sochi.

Question: A question about Abkhazia and South Ossetia. Russia does not recognise the independence of these two breakaway regions, but it is tightening its control over them. The net result is a status quo. Perhaps it suits you? Perhaps it is the best solution to the problem?

Vladimir Putin: Did you say "breakaway" regions? Why don't you use the same word with regard to Kosovo? You don't want to answer me? You have no answer and you can't have any.

Voice: But there were many Georgian refugees in Abkhazia. The situation there was the reverse (of Kosovo).

Vladimir Putin: No, it is not. Thousands of Serbs are unable to return to Kosovo. Hundreds of thousands. It is the same thing. Have you seen any refugees returning to Kosovo? The few remaining Serbs are being chased out, and nobody is returning. Don't tell me. I know the real situation. No refugees are returning. And you cannot guarantee them a safe and civilised life on that territory. So, these are absolutely identical situations.

As for the exodus of the Georgian population, yes, that is true. But 55,000 Georgians have already returned to the Gali District in Abkhazia. The process would continue but for the military pressure exerted by Tbilisi. As you may know, back in 1919, when the so-called socialist revolution, or coup, as it is now called, took place, Georgia became an independent state. Ossetia declared that it did not want to be part of Georgia and wanted to be part of the Russian Federation. The Georgian authorities launched several punitive expeditions, which the Ossetians still describe as extermination and purges. These conflicts have a long history and deep roots. To solve these problems one needs patience and one needs to respect the small peoples of the Caucasus, and not to use military pressure. There is currently a lot of talk about Georgian unmanned aircraft over Abkhazia being shot down by Russian missiles. But why isn't anyone saying that under an existing agreement flights over that disputed territory are forbidden? And what is the purpose of the flights of these drones? It is reconnaissance. What is reconnaissance for? It is needed if military action is planned. So is it the case that one side is preparing to resume the bloodshed? Is that what we all want? Nobody wants that. To live within a single state, especially if the population agrees to that, one has to establish a dialogue with them. We have all along called on our Georgian partners to do that, and not to bring military pressure.

(In reply to a remark)... So, in Abkhazia there are many Georgians, and also in Ossetia... The Ossetians have found themselves divided along a mountain ridge into Southern and Northern Ossetia. But they are one and the same people, partly in Russia and partly in Georgia. A normal peaceful dialogue must be put in place.

Question: President Mikheil Saakashvili has proposed a peace plan for Abkhazia granting an unprecedented degree of autonomy. Also, and I quote, the post of Vice President to an Abkhaz national in the Georgian state and advisory rights on the whole legislation reform. Does that suit you?

Vladimir Putin: It should suit the Abkhaz above all.

How did that ethnic conflict start? After the breakup of the Soviet Union Tbilisi abolished the autonomous status of these republics. Who urged them to do it? An ethnic conflict started immediately, a war started. Now they say: We are ready to return to the original position. We will grant you autonomy that we took away from you several years ago. Apparently the Abkhaz no longer trust these promises. They feel that in several years' time it may be taken away from them again.

We should have patience, we should establish a dialogue. We have been instrumental in the return of the 55,000 Georgian refugees you mentioned to the Gali district of Abkhazia. It was actually Russia who did it. We persuaded the Abkhaz to allow them in and to ensure a normal environment for them. Russia consulted the Abkhaz leadership. I don't mind telling you that I personally was involved in this. I asked the Abkhaz leadership and they agreed. We worked out a joint plan for the development of energy, border cooperation and the building of infrastructure in which we decided to restore the railway. Then it all stalled and military actions resumed. Because elections were coming up and some parties wanted to show how tough they were and that they would soon set things right. Matters that drag on for centuries cannot be made to fit an internal political calendar. Nothing good will come of it. Yes, I very much hope that the plan proposed by Mikheil Saakashvili will gradually be introduced because it is on the whole a sound plan. But it takes the other side to agree to it. There needs to be a dialogue.

Question: The last question is of a general character: how would you like to see Russia in the future and do you have an overall plan?

Vladimir Putin: We proposed a concrete plan for Russia's development through 2020. We hope that the structure of our economy will change significantly and that innovations will play a bigger role than today. Innovation must play a much more significant role, though perhaps not the leading role, considering the vast mineral resources that we have. We hope that the energy infrastructure and the business infrastructure will correspond to modern requirements, that we will have an effective and viable political system that will react to everything that is happening in the country and in the world. That we will be able to put in place a foreign policy that will ensure Russia's dynamic and effective development, and its ability to compete. Then the people in our country will feel secure and will be able to make long-term plans for their families.

Thank you very much.