Press Conferences

25 october, 2009 18:24

Vladimir Putin and the Finnish Prime Minister Matti Vanhanen gave a joint press conference on the results of the Russian –Finnish talks

Vladimir Putin and the Finnish Prime Minister Matti Vanhanen gave a joint press conference on the results of the Russian –Finnish talks

Vladimir Putin:

Ladies and gentlemen,

Mr Matti Vanhanen and I have just finished our meeting. I would like to express my appreciation to all our Finnish colleagues for the substantive discussion and the businesslike atmosphere.

We had a committed and open discussion on practically all the issues on the bilateral agenda, ranging from trade and industrial cooperation to joint cultural and environmental projects.

It is important that in spite of the global economic crisis, the implementation of key Russian-Finnish projects is proceeding at a good pace. Although there has been some decline in the volume of trade, I am confident that in the future we will be able to turn this situation around. In this connection I would like to remind you that last year Russia emerged as the biggest trading partner of the Finnish Republic.

We are committed to building up our business ties, improving their quality and stability, and developing both the traditional and new areas of economic partnership.

During our talks, energy issues came in for particular attention. We discussed the plans of Russia and our European partners to build the Nord Stream gas pipeline. We expect that the Finnish Government will shortly grant permission to lay the pipeline in its economic zone in the Baltic Sea.

On the whole - and I would like to draw your attention to this - there is more and more support in Europe for the diversification of energy routes. Just recently, as you know, the Danish Government has granted permission to lay the pipeline through its economic zone, for which we would like to thank that country's leadership.

I would like to note progress on the transport programmes between Finland and the Russian Federation. By the end of next year, high-speed train service will be launched between St Petersburg and Helsinki. That will cut the travel time by half. Mr Vanhanen suggested that we make the inaugural trip together. I think we will do it.

During the meeting we discussed broader environmental cooperation in the Baltic region. We have some positive experience here. For example, construction has been completed on the south-western purification plants and of the Northern sewage in St Petersburg.

We intend to continue cooperation in this sphere. We have discussed the prospects for similar joint projects in other Russian cities along the Baltic coast, above all in Kaliningrad.

Russia supports the Finnish initiative of holding a Baltic summit in Helsinki early next year. I believe that its decisions will strengthen environmental cooperation in the region.

Let me remind you that Russia currently holds the presidency of the Helsinki Commission on the Protection of the Baltic Marine Environment. Needless to say, we are ready to render our Finnish colleagues every assistance in the context of the future forum.

I would also like to tell you that the Government of the Russian Federation has decided to prepare and launch a programme to improve the Baltic Sea ecology. The programme will cover the period of 2010-2015. It is based on the measures set forth in the Helsinki Commission Action Plan.

Today we attended the third Russian-Finnish Forestry Summit. The development of partnership in this important area is central to our bilateral economic relations.

Naturally, our decisions in this field should be flexible and should take into account the real situation and the problems caused by the global economic crisis. Therefore we have decided to accommodate our long-time partners by freezing the introduction of higher duties on the export of raw timber for another year - in fact it will most probably cover the year 2011 as well.

But as I said, the moratorium cannot last eternally. We have made our strategic choice in favour of rapid development of the timber processing industry in Russia and we will continue our dialogue with our Finnish partners.

I am confident that our Finnish colleagues will avail themselves of the opportunities being opened up to build the relevant enterprises in Russia.

Summing up, I would like to stress that Russian-Finnish relations are developing dynamically in every area. This is particularly heartening knowledge today as we mark a milestone in our joint history, the 200th anniversary of establishment of Finnish autonomy within the Russian Empire.

We intend to continue to do everything to develop the whole range of cultural ties between Russia and Finland. Just recently a Russian pavilion was launched at the Helsinki Book Fair.

Today Mr Prime Minister and I are to attend together the opening of Finland House in St Petersburg. We hope that its work will help bring our countries and societies still closer together and strengthen the spirit of genuine friendship between Russia and Finland, which has for decades provided a good example of cooperation in Europe.

Finally, I would like to thank my esteemed colleague, Mr Matti Vanhanen, for constructive negotiations.

Remarks by Matti Vanhanen (through an interpreter):

Prime Minister Putin,
Members of the media,

My counterpart has given a fair summary of the discussions we have held. Our delegation and I are highly satisfied with their content. We discussed a wide range of issues, starting with economic issues and, as Mr Putin has mentioned, ending with the environment, including that of the Baltic Sea.

We discussed three main economic issues. I have informed my counterpart on the Nord Stream project and said that, in accordance with the ESPOO Convention, we are holding concluding consultations. The final consultations on the issue will take place on Monday.

On November 5 we will prepare proposals for a positive decision regarding Nord Stream. After that the environmental license will be issued, and the environmental evaluation will take place before the end of the year.

We are particularly gratified with the news that export duties are to be frozen for practically two years. This is gratifying, among other things, in connection with the WTO talks. We have agreed that our Economic Cooperation Commission will oversee how the application of technical standards is to be changed.

Thirdly, there is our cooperation in shipbuilding, in which the Finns are of course ready to participate in every way. At the start of our talks I said that there has been a change for the better in the course of the economic crisis. Traffic across our border has picked up. The decrease from early in the year will most likely be compensated for by the end of the year, because volume has clearly increased and world trade is obviously becoming more active. That will affect our countries, both Russia and Finland, and on our relations. Thank you.

Question: Helsingin Sanomat. Mr Putin, The case of Rimma Salonen and Anton has attracted a lot of publicity in Russia recently. It is still ongoing. Unfortunately, many facts have been falsely reported by the Russian media.

Do you believe you have accurate information about the situation? For example, Johann Beckmann recently apologized in Finland for contributing to a distorted picture being formed in Russia over the issue. How much has this affected our relations? How can the situation be mended so that the relations should be still better?

Vladimir Putin: I think such issues, which are emotionally charged and sometimes legally complicated, should be solved either by agreement between the parties or in a court of law. Fortunately, in spite of a lot of publicity, as you have mentioned, it has not yet affected the relations between our countries. I hope that will not happen. Such cases are not rare in our country. They receive emotional and detailed coverage in the media. In my opinion, such problems should be resolved, without undue publicity and commotion, between two people, between the parents.

In dealing with such issues society must above all be concerned with ensuring the rights of the child.

I already made this point when I was in Finland. I can repeat that the only thing we consider unacceptable is the use of diplomatic services outside the Vienna Convention. I think that is indisputable. We very much hope to see a uniform interpretation of these issues on the part of our partners.

* * *

Question: I have a question for both prime ministers. You have attended the Forestry Summit today, and Mr Putin has announced that the moratorium on prohibitive timber export duties would last a year. Judging by the reaction of your colleague, it has been extended for another year. This must be good news for Finland and the Finnish timber business.

But it also means that the hope for developing the timber processing industry in Russia has been postponed. You must have discussed this issue. What have you decided? In which direction will you develop bilateral cooperation?

Vladimir Putin: I have already spoken about the development of the timber industry and timber processing in Russia: This is our choice, it is a strategic choice, and we do not plan to review it.

Moreover, as I have already said today, new projects are being implemented in Russia to establish modern plants for deep timber processing. Total investment in these projects exceeds 450 billion roubles ($15.5 billion). There are several dozen such projects. So, we are working hard in this sphere.

As for extending the moratorium on the prohibitive export duties on raw timber used at the Finnish pulp and paper plants, it is a temporary measure taken with due account of the current situation on the global markets. I also spoke about it during my visit to Helsinki.

We do not intend to resolve our problems at the expense of our Finnish partners. We know that the situation is difficult for everyone, and that the situation in Finland is especially difficult because the timber processing sector plays a large part in the Finnish economy. This is why we took the decision to extend the moratorium.

Given the current situation on the global markets, accelerated commissioning of additional capacity would be difficult economically. The sales volumes have fallen. We can build more plants, but where would they sell their products?

Therefore, we will act cautiously, considering the trends on the global markets. I am confident that the global market will rebound alongside the revival of the global economy. And the demand for timber products will rebound too, but it will take time. We will adjust our customs duty policy in accordance with these changes.

In this light, I can offer you information that will be interesting to Russian producers and their partners in Finland. During the talks we held behind closed doors, the Finnish Prime Minister appealed to us to review the issue of duty-free birch deliveries for the Finnish timber processing industry. I believe we could expand the parameters and hence the volume of such deliveries to our partners abroad.

The issue concerns the so-called birch supply balance, which is birch timber with a diameter of up to 15 cm. I have instructed (First Deputy Prime Minister) Viktor Zubkov and other officials to draft the criteria to expand the volume of such duty-free supplies.

Matti Vanhanen: The capacity of the timber industry in the EU countries has fallen by 15% during the economic crisis. Many plants closed down partly because of the crisis, and partly because of frequent changes in the demand for paper. The bulk of consumption is shifting from Europe and North America to other regions.

Therefore, it is difficult to expect large investment in the industry. The speakers today included two representatives of Finnish companies that had planned to invest billions of dollars in Russia. They had to postpone the implementation of these plans and search for ways to revive them in the future.

Today we coordinated our duties for the next two years and discussed ways to expand the range of duty-free supplies. This will create new conditions, including in the Finnish timber industry, for improving our economic situation during the economic downturn, and possibly for increasing our investment outside Finland.

Thank you.

Question from the Finnish News Agency (STT): The volume of mutual deliveries has plummeted, and lifting duties would not be enough to increase them. Only the termination of such duties will create a sufficient impetus for considering long-term investment again.

I have a question for both prime ministers: Will a temporary ban on export duties have a positive effect?

Matti Vanhanen: Let me answer this first. If we resolve technical problems, for example problems connected with the 15-cm limit, within two years, I believe the decision will have a positive effect. Besides, we will have two more years for additional talks, including within the WTO framework, with the plants using the time to adjust to the new situation.

Vladimir Putin: A two- or even a one-year moratorium on these duties is a sufficient time for giving our partners a chance to find their bearings on the market. We invite the companies that think they can work like that and accept the investment conditions set by the Russian Government to work in Russia.

I don't think there is anything unusual in that. Any country - every country - in the world wants to reduce the volume of raw materials export and to increase the volume of processing in its own territory. Russia is not doing anything unusual in this respect - it simply wants to develop the country and its economy. Is this wrong?

However, I would like to say again that we are not trying to attain this goal at somebody else's expense, which is why we are acting carefully, after notifying partners about our plans. Moreover, we make concessions to them on other issues. The present situation is complicated; we have not just postponed the decision for a year - and possibly two years - but, meeting the wish expressed by Mr Vanhanen, agreed to discuss the possibility of increasing duty-free birch supplies and all the related issues. Therefore, we are acting as true partners with regard to our Finnish colleagues.

As for whether this is enough, it depends on what we need it for. It is more than enough for getting one's bearings, taking the necessary steps to reduce or even prevent negative economic and social consequences. But it is not enough to convince us never to do so again.

Anyway, I would like to say again that we are pursuing an open policy, a clear and understandable partner policy. And we hope strongly that our Finnish partners will also take into account our interests when addressing cooperation issues, bearing in mind that our cooperation is highly diversified.

Question from RIA Novosti: I have two questions, the first of them for Mr Vanhanen. Is it true that Finland is going to prepare the main documents for the construction of the Nord Stream pipeline by the end of this year?

My second question is for Mr Putin. You said some time ago that the South Stream project could be implemented ahead of Nord Stream. Does that mean that Nord Stream is taking too long, or that its deadlines may be reviewed? Thank you.

Matti Vanhanen: In early November, the Finnish Government is going to take a decision on Nord Stream's route in our economic zone. After that, our environmental regulators will issue the construction permit. We believe that we can do it by the end of the year.

Our politicians can no longer influence the issue. The environmental regulators are tackling these issues independently, in accordance with their procedures.

Vladimir Putin: The Nord Stream project is proceeding according to plan; it is not behind schedule. We are already buying the necessary equipment and have completed the environmental assessment. Pipes are being stored for the project in Russia and Germany.

I would like to remind you that this is a huge project involving not only the companies that will supply and buy natural gas, not only Gazprom and the German and Dutch companies. Tenders are held to choose equipment suppliers, in which other European companies are participating. For example, an Italian company has won the tender for the supply of $2.5 billion worth of equipment for the project's two stages.

Today we discussed the possibility for Finnish companies to participate in the development of the Shtokman gas condensate field. Tenders will also be held for Shtokman, a major international project; and Finnish partners may also participate.

However, all of that will be useful only if we build Nord Stream, because gas from Shtokman should also be supplied to that pipeline. These are major projects that have united many partners in a group addressing common European issues, in this case energy issues.

But, of course, we need these permits, because we cannot and will not work without them. You know that the Turkish Government has taken a requisite decision for South Stream. We are implementing the South Stream project jointly with Italian companies, in particular Eni; and Gazprom and Eni have cooperated in building a gas pipeline on the seabed - Blue Stream - in the past. So, building another such gas pipeline would not be a big problem for them. They have done it before, and they did it in the same area, the Black Sea.

Therefore, we will conduct exploration and seismic studies along the pipeline's route, and then work will begin there rather quickly.

I cannot say which project will be completed sooner, but I am sure, I am pretty sure, that we will build South Stream quickly. I also hope that Nord Stream will be built by the approved deadline. Thank you.