During a meeting in Sochi, the Russian and Finnish prime ministers discussed bilateral cooperation and the world economy.
Prime Minister Vladimir Putin invited his newly appointed Finnish counterpart to Sochi to discuss bilateral issues on his home territory.
"I have long dreamed of visiting Sochi, especially in the summer," Finnish Prime Minister Jyrki Katainen said. "My family and I even consider taking a vacation here."
Putin accepted this compliment and reminded his counterpart that the two countries have been good friends and economic partners for a long time.
"We see nervousness on international markets, but we can ensure the dynamic development of our trade relations," the Russian prime minister said.
Russia and Finland have been cooperating in high tech: for instance, Nokia will establish a lab in Skolkovo. Also they have joint projects in shipbuilding and personnel training.
In 2010, a high-speed railway link between Helsinki and St. Petersburg was commissioned. Last year Finland issued one million visas to Russian citizens and this year this figure will be even greater. Russia, in turn, has provided the opportunity for passengers travelling from Helsinki to St. Petersburg by sea to stay in Russia without a visa.
The prime ministers discussed the establishment of a council to address controversial issues of the rights of children born in mixed marriages and adopted by foreign citizens. Russia is currently in negotiations with France on this issue.
Journalists asked a lot of questions about the panic infesting the world's financial markets.
"To not make things worse, we should, above all, stop scaring ourselves," Putin said. "I'm serious. First, by scaring each other you only invite the potential for negative consequences, which are otherwise not inevitable. Second, we need to pursue a balanced macroeconomic policy."
According to Putin, the good news was that the United States managed to agree on extending the debt ceiling, and the European Central Bank decided to buy out Spanish and Italian government bonds.
"All this does not solve the real problems, but it is good," the Russian prime minister said. "In Russia, we believe that it is necessary to monitor liquidity. The Finance Ministry and the Central Bank are monitoring the situation. If necessary, the Central Bank and the ministry will inject the needed liquidity into the market. Today, for example, the Finance Ministry suggested introducing 40 billion roubles into the market from extra funds. In addition, Russia is consistently decreasing its budget deficit. The government debt currently stands at 10%, with foreign debt accounting for only 3% of that. Russia's gold and foreign exchange reserves are on the rise and currently amount to about $550 billion. I hope that the global economy will recover. Perhaps not as quickly as we would all like, but it will begin to gradually recover."
Journalists also asked Putin to comment on the recent Norway tragedy.
"Such crimes are unpardonable," Putin said. "Extremism has many different sources. I won't raise all the related issues here, but extremism tends to breed in places where the state fails to respond to certain challenges with timely and effective measures. Extremism exists in many countries, including in Russia. This implies cross-border communication between extremist elements. And so law-enforcement agencies in various countries and regions must cooperate. Russia has many good partners among law-enforcement agencies and special services in Europe, America and Finland."
By the way
On August 9, the prime minister also met with VTB Bank CEO Andrei Kostin.
"I must say, we are prepared to confront financial challenges much more so than two years ago," Putin said. "I don't foresee any problems for the VTB Group or other Russian banks, even in a less favourable environment than what we are expecting."
Nigina Beroyeva