10 february, 2010 17:00  

Prime Minister Vladimir Putin and Finnish Prime Minister Matti Vanhanen addressing a news conference after Russian-Finnish intergovernmental negotiations


The Russian prime minister does not think that energy use will change during the next 15-20 years, despite the rapid development of alternative energy. Hydrocarbons will not be replaced by other energy sources in the next 15-25 years.

Matti Vanhanen (as translated): This is not really a full press conference but rather a short meeting with the media. Respected members of the press, Mr Putin and I had a short meeting, during which I thanked him for the very intense effort he has put into developing water supply and drainage projects in Kaliningrad.

Our very brief discussion focused mainly on economic cooperation. We will meet again in spring when we will have an opportunity to discuss all this in greater detail. However, we had enough time to discuss some pivotal matters.

We have no particular news to announce at this meeting with the press. What matters most is that in the wake of this economic crisis, we find a way of ensuring our economic cooperation sees renewed impetus and new growth.

Good progress is being made on many of the issues we discussed during our previous meetings. In particular, negotiations on drafting a treaty on leasing the Saimaa Channel are reaching a successful conclusion.

We will return to these important issues of economic partnership when we meet again in spring to discuss them in greater detail.

Vladimir Putin: Thank you. Let me once again thank you for this invitation. Russia attaches great significance to our cooperation in the Baltic. Environmental problems are always in the foreground: in particular during the implementation of joint, and bilateral, economic projects.

Naturally, during our discussions the prime minister and I concentrated on bilateral economic partnership, noting that it has started to see a gradual revival despite last year's significant trade shrinkage.

We confirmed once again our shared desire to diversify our relations. We talked about the energy sector, about cooperation in forestry, transport and engineering, including shipbuilding.

We regard Finland as a major partner in the region, and Russia remains among Finland's crucial trade and economic partners.

I hope the Helsinki-St Petersburg speed train will start operating at the end of this year, and we will sign an agreement in May on leasing the Russian stretch of the Saimaa Channel.

Last year we celebrated the 200th anniversary of Finnish independence, meaning its autonomy within the Russian Empire. This year, we will celebrate another crucial event, the 90th anniversary of the establishment of diplomatic relations.

Just before meeting the press, we agreed to do everything necessary in preparation for a meeting in Moscow with representatives of Finland's leading business circles.

I thank the Finnish prime minister and president for their unwavering attention to the development of intergovernmental relations.

Thank you (in Finnish).

Question: Mr Vanhanen, when can we expect final permission for the construction of the Nord Stream gas pipeline? When does your government intend to authorise it?

And a question for the Russian prime minister: it is often said in the West that Europe will not need Russian natural gas so acutely in the future, given the use of alternative energy sources and supplies from other parts of the world. Is that the case?

Matti Vanhanen: First, regarding the construction of Nord Stream. The Finnish government approved it last autumn. I told my colleague that Finnish environmental protection agencies told me that they would make a final conclusion within a few days. In other words, the decision is not up to the government but to the licensing authorities. The government does not know yet what their decision will be.

The situation on the world gas market really has changed. However, this change mainly concerns liquefied gas, and I personally think the demand for piped gas will remain at current levels.

Vladimir Putin: The Prime Minister has begun to answer the second part of your question. Indeed, economic demand for energy has fallen due to the global economic crisis and production shrinkage. This is evident. Still, we are working from more optimistic forecasts. Eventually the global economy will return to growth, and energy demands will grow with it.

Incidentally, we will synchronise the implementation of our major energy projects with market demands. This also relates to the development of the largest deposits.

As I have said, Russian and international experts think that as the world economy returns to growth it is inevitable that energy demand will also increase.

However, the structure of energy demand is unlikely to change during the next 15-20 years despite the rapid development of alternative energy sources. Unfortunately or fortunately as the case may be nothing, not solar energy, firewood or dried manure, will replace hydrocarbons in the next 15-25 years.

As for natural gas piped to Europe, as Mr Vanhanen correctly noted and I am in full agreement with him, it will always be cheaper than liquefied gas.

So I am optimistic about the situation.

Question: Esteemed prime ministers, timber customs duties have been under discussion for a very long time, and all parties agree that these duties are to the detriment of the timber sector of the Russian and Finnish economies.

It is important that timber be entirely exempt from customs duties or, at least, that there should be no increase in such duties. Why is there no progress on this issue, what's the problem?

Matti Vanhanen: We spent very little time on this subject during our short meeting. As Prime Minister Putin promised, last autumn Russia froze these duties or left them at their prior levels. Prime Minister Putin said that Russia would continue to consider future measures.

I am sure we will return to the matter when we go fishing in spring together.

Vladimir Putin: I can only repeat that we have met our Finnish partners halfway to extend the current level of customs duties, not raising it before January 2011. We are considering the possibility of its further prolongation and the corresponding decisions regarding birch and aspen wood.

As for Russia's fundamental intention to increase these customs duties, they are based on the simple rationale of our legitimate desire to develop our own timber industry and attract investors to it.

We are not out to ruin or hurt anyone, we merely want what is best for us. Of course we do not seek to benefit at anyone else's expense. That is why we will prolong low duties and discuss the prospects for Finnish investments in the Russian timber industry.

Our business contacts are bearing fruit as you can see. I hope our dialogue will continue, and that our decisions will be acceptable both to Russia and our Finnish friends.

Thank you.