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Thursday, June 22, 2006

Javier Solana - We want to closely cooperate with Russia in the energy sector

June 2006 Interfax - EU High Representative for Common Foreign and Security Policy Javier Solana granted an interview to Interfax correspondent Olga Golovanova ahead of the Russia-EU summit in Sochi.
 How would you assess the state of relations between Russia and the European Union? What in your opinion helps broaden cooperation and what factors have been impeding it?
We have close ties with Russia, which is a partner of great importance to he EU. Our relationship is a strategic partnership, based on shared values and shared interests, which we want to develop further.  The current summit is kind of assessing the results of Russian and EU experts' lengthy effort to forge bilateral agreements relaxing visa procedures and regulating readmission. What do you think is the role of these documents in a broad context for the people of Russia and EU countries? What are prospects for advancement towards a visa-free regime in our citizens' travel? The agreements on visa facilitation and readmission will be signed at the Summit. Russians coming to EU countries and citizens of EU Member States going to Russia will find it cheaper and easier to get visas. This will make a big difference to, for example, Russian holidaymakers and businesspeople coming to the EU. Although we have not agreed yet on a visa free regime, the visa facilitation agreement brings us a step closer to that objective. The agreement on readmission means that the EU and Russia will be able to improve their co-operation in tackling illegal immigration and asylum, a responsibility that we share as neighbours.
 Intensive debates have been going on in the European Union regarding the future institutional setup of the European Union, including the future of the European Constitution project. Concurrently, enlargement is continuing. The European Union will accept Bulgaria and Romania in 2007. Talks are underway with Croatia and Turkey. The European Commission you head is also reassessing its role. What will these processes mean in practice for the European Union's relations with Russia? In other words, will it be more difficult or easier for us to cooperate with a renewed European Union?
The European Union is growing and our goal, under our common foreign and security policy, is to develop an increasingly close partnership between the European Union as a whole and Russia. The EU institutions play an increasingly important role in European policy. As the EU enlarges, we need to simplify its structures so that the EU operates more efficiently. This can only help us in developing our relations with our strategic partners, including Russia. We were very pleased that Russia welcomed our latest enlargement and since then we have seen a further intensification of our relations. There is every reason to expect this positive trend to continue.
 It is well known that there is no unanimity in the European Union concerning the parameters and modality of further cooperation with Russia in the energy sector. What should the European Commission's role be in this connection? Energy cooperation is a natural part of foreign and security policy which we discuss with our key partners. Russia has an important role as a major energy supplier to the EU and the EU has an important role as a major export market for Russian energy.
We want to cooperate closely with Russia over energy in order to ensure reliable supplies - consumer security - and a stable basis for our economic cooperation. We believe this is best achieved through transparency, open competition and equal access to investment, markets and infrastructure, as well as good cooperation on the environment. We see energy as an important factor for stability and integration on the European continent.
 Gazprom fears that, by joining the Transit Protocol of the Energy Charter, it could incur unilateral sanctions. The company argued that the Energy Charter Secretariat remained inactive when Ukraine was siphoning off Russian gas intended for European consumers. If the European Commission really wants, based on this protocol, to build an effective mechanism of energy security, doesn't it think that sanctions should be applied on Ukraine for violating this protocol, thus proving to Gazprom that this document works? The Energy Charter Treaty establishes principles and mechanisms that ensure that international energy co-operation is fair, effective, transparent and predictable. If Russia had already ratified this Treaty, I am convinced it would have been easier to find a good and fair solution to the dispute with Ukraine at the beginning of this year. Russia has everything to gain from ratifying the Treaty.
 How in your opinion should the problem of the status of ethnic minorities in the Baltic countries be tackled? Does the European Commission have any real levers to ensure the fulfilment of the obligations under the Russia-EU Joint Statement assumed in April 2004? The Joint Statement of April 2004 welcomed the EU enlargement as a firm guarantee for the protection of human rights and the protection of persons belonging to minorities. We think this guarantee has been and is being respected. The EU continues to give support for the integration of the Russian speakers. We are particularly pleased that the numbers of applications for citizenship in Estonia and Latvia has gone up after the enlargement. It shows that the situation continues to improve.
 The Russia-EU Agreement on partnership and cooperation expires in 2007. How do you see the future of relations between Russia and the European Union? What model will, in your opinion, better reflect the interests of our peoples? A great deal has changed both in the EU and in Russia since the Partnership and Cooperation Agreement came into force nearly ten years ago. Russia is now a different country and is, for example, in the process of joining the WTO. The EU has grown in size and has developed its common foreign and security policy. We need to update our contractual relationship to better reflect these changes and allow us to deepen our relationship further.
 What is your opinion about how to solve the Iranian nuclear program? How the EU will react if Iran rejects "European troika"'s new peaceful proposals? Will the EU in this situation apply sanctions against Iran?The EU remains committed to finding a diplomatic solution to the conflict over Iran's nuclear programme. It is currently developing a package of incentive measures which show that we have nothing against Iran using nuclear energy for peaceful purposes. It will be an ambitious package offered by the EU and other members of the international community. If Iran rejects it, it will be clear that it does not want to cooperate. In parallel, the members of the UN Security Council are discussing a resolution that would oblige Iran to comply with the demands of the international community.
 Under what circumstances will the EU be ready to give financial help to Palestinian people? Will the EU take into account Russian experience in this sphere? The EU has always been ready to help the Palestinian people and will not let them down. That is why it is now working on the establishment of a mechanism to deliver with maximum efficiency the assistance that cannot go to or through the Palestinian government. For normal relations to resume with the Palestinian government, the international community requires the recognition of Israel, the renunciation of violence and acceptance of past agreements.

Russian external debt to total about $50bn after payments to Paris Club

06/21/2006 Regnum News - Russia should continue paying off its foreign debts, Russian State Duma Deputy Speaker Vladimir Pekhtin said to the press on June 20. He is quoted by a REGNUM correspondent as stating that Duma approved agreements between Russia and the Paris Club on settling the rest of Russia's debt till the end of the year. He reminded that Russia paid off part of its debt to the Paris Club ($2bn) in 2005. At that time, she also paid in full to the International Monetary Fund. Nevertheless, there are still other debts to be paid, and the government should continue to consider early debt recovery to all creditors. Mr. Pekhtin maintains that early debt recovery does not induce inflation and undoubtedly increases the country's investment attractiveness. The debts settlement allows both decreasing debts maintenance expenditures and exonerating future generations from the burden. "After Russia settles accounts with the Paris Club, its foreign debt will decrease to about $50bn," the MP said.

Over half of Russians have offered bribes, polls show

RBC, 21.06.2006, Moscow 17:56:57 – Every second Russian (53 percent) admits having offered bribes, a poll carried out by the All-Russian Public Opinion Research Center shows. Some 19 percent say they often offer bribes while 34 percent said they did it sometimes. Another 45 percent of the people polled said they had never had to do it. Those most commonly bribed include medical professionals (51 percent), traffic police (31 percent) and education authorities (20 percent). Some 16 percent of the people polled have bribed policemen, another 7 percent have paid military officials while 10 percent named civil servants responsible for execution of land, privatization and probate cases. Another 10 percent of respondents mentioned bribing to obtain a job. The majority of respondents (61 percent) think that corruption starts with small-time bribery, like presents given to doctors, teachers or housing office functionaries. Around 30 percent of respondents believe that low level bribes do not have serious consequences and cannot be compared to political corruption. Almost half of the people polled (46 percent) believe that if officials stopped accepting bribes, it would be easier for people to solve their problems. Another 12 percent think that this would make the problems more complicated. Some 26 percent of respondents are sure that it would not affect the way people's problems are solved. The All-Russian Public Opinion Research Center polled 1,589 people in 46 regions in Russia.

Thursday, June 01, 2006

Russia to Repay All Soviet Era Debts in 2006

31.05.2006 MosNews - All of the debts of the former Soviet Union will be settled this year, Russia's Finance Minister Alexei Kudrin promised on Tuesday, May 30. Russia even happens to settle its $22 billion debt to the Paris Club of creditors, despite the fact that some of the creditor countries demand a premium for ahead-of-schedule payment. "There is hope that this year we will settle debts with all foreign states, including the member countries of the Paris Club," Kudrin said after signing a relevant agreement with the last of former Soviet Union's large creditors — Kuwait. "In recent years Russia has had a very good credit history," the Russian minister added. As MosNews reported, Russia still owes $22 billion to the Paris Club of creditors. The largest creditor within the framework of this organization is Germany. Russia is making the credit payments with the money accumulated in Stabilization Fund, which collects windfall oil revenues. In his Budgetary address made on Tuesday, May 30, Russian President Putin announced that in 2007 "Stabilization Fund assets above the basic volume have to be directed solely for ahead-of-schedule payment of state external debt". Earlier, one of Putin's staunchest critics and his one-time ally, former presidential economic advisor Andrei Illarionov said on air at the Echo of Moscow radio station that decision to pay external debt with Stabilization Fund money is "expedient and feasible". The agreement signed with Kuwait presupposes that over the next five years this Middle Eastern country will receive $1 billion in cash and another $600 million in form of engineering products. Another $400 million of accumulated interest payments have been written off. This year Russia also plans to settle its debts to another seven countries, which include Serbia, Greece and Malta. Following the break-up of the Soviet Union Russia has inherited all of the Soviet property abroad, such as embassy buildings, but it also inherited all of the country's giant external debts.

Russia to Lift All Currency Controls on July 1 to Make Ruble Fully Convertible

Central Bank’s logo31.05.2006 MosNews - The Russian Central Bank announced on Tuesday, May 30, that it would lift remaining currency controls by July 1, effectively making the ruble fully convertible. The move was initially scheduled for Jan 1, 2007, but the Russian President Vladimir Putin announced its earlier start in his state-of-the-nation address earlier in May. In a statement, posted on its website, the bank said that it will lift a 7.5-percent mandatory reserve requirement for non-resident holders of sovereign debt. It will also lift the obligation to hold proceeds from the sale of sovereign debt temporarily in a special ruble account before converting the rubles into foreign currency. Analysts expect the move to make the domestic Russian debt market marginally more attractive to foreign investors, but see little immediate impact on the ruble's exchange rate, which the Central Bank will continue to regulate at daily foreign exchange auctions.

Boeing Set to Pour $27 Billion Into Russia

Boeing 74701.06.2006 MosNews - The Boeing Co., the world's second-largest commercial-aircraft maker, expects to spend $27 billion in Russia on raw materials and services over the next 30 years to profit from the country's engineering resources and metal supplies, Boeing Russia President Sergei Kravchenko said on Wednesday, May 31. The information was reported by the Bloomberg agency. Boeing will buy $18 billion worth of Russian titanium and $5 billion worth of intellectual and engineering services for its commercial aircraft programs and spend $4 billion for Boeing's other departments, Kravchenko said in a telephone interview from Moscow. Chicago-based Boeing and larger rival Airbus are competing for a $3 billion plane order from OAO Aeroflot, Russia's largest airline, which said last year that it will choose between Boeing's 787 Dreamliner and Airbus' A350. Airbus Senior Vice President Axel Krein said Feb. 21 that his Toulouse, France-based company is in talks with Russian officials on $25 billion worth of partnerships including development of new aircraft. "This is not a reply to Airbus' $25 billion proposal," Kravchenko said. "These are concrete plans for cooperation work we already have in Russia." Boeing's design center in Moscow contracts out work with 1,200 Russian engineers helping develop wing flaps and the nose section of the planned 787 model. VSMPO-Avisma, the world's biggest titanium producer, is already shipping parts for the 787 made of the metal.

Misunderstanding between Russia and the West is growing

Michail Kasianov23 May 2006 INTERFAX News - Former Russian Prime Minister Mikhail Kasyanov has left for Paris on a business trip where he will meet with representatives of French political and business circles. Kasyanov has already attended an international conference in Brussels dealing with Russia-EU energy cooperation and visited Berlin during May. Before departure he granted an interview to Interfax in which he assessed Russia's relations with the West.
"There is no cold war between Russia and the West. Instead there is growing mutual misunderstanding caused primarily by errors in Russia's foreign policy and its reluctance to recognize them and to make corresponding conclusions," he said.
"Such a situation is temporary. As soon as we return to the road of building a normal civilized nation, a national guided by European values of democracy and the market economy, the cool spell will end," Kasyanov said.
Asked to comment on criticism of Russia by U.S. Vice President Dick Cheney at a conference in Vilnius earlier in May, Kasyanov agreed with the main points and added: "It would have been even more useful if the same words were to have been politely but firmly publicly expressed directly to the leaders of this country in Russia."
Speaking of the present state of Russian-U.S. relations Kasyanov said: "The incumbent American administration has made a mistake by rejecting the existing forms of bilateral economic cooperation."
"Russia and the United States simply must advance their partnership for the sake of global strategic security," he said. In this context he described the current fanning of anti-American feelings in Russia as extremely dangerous "for the first time since the Soviet era."
Asked about the prospects of Russia's accession to WTO, Kasyanov said the main reason for their worsening was "a sharp and unconcealed change in the attitude of Russian politicians and officials to the process."
As for Russia's role in the CIS, Kasyanov said he believes that Georgian and Ukrainian plans to join NATO largely result from Russia's policies. "I have always thought that NATO membership will do these countries no good. It is a different matter that Russian policy in the international arena has significantly strengthened the positions of politicians in countries advocating NATO membership as a safeguard against our unpredictability," he said.
Asked about the prospects for the CIS, Kasyanov said its future depends primarily on the attitude of Russia. "Russia has justifiably always played the leading role in the CIS, thus the future of this and other international associations in the former Soviet Union with our participation depends on the positive agenda that we offer other countries," he said. "A CIS advocating undemocratic isolation and confrontation with the rest of the world has no future," he said.
"CIS evolution should involve the adoption of the democratic standards of EU countries in our daily life and the deepening of economic integration with those countries," Kasyanov said.
He criticized Russia's practice of cutting off natural gas supplies because "as a rule it does not affect those against whom it is directed. The suspension of gas deliveries to Belarus and Ukraine in January 2004 and 2006 left half of Europe, including our own Kaliningrad region, freezing in midwinter and undermined Russia's reputation as a reliable supplier of energy. However, the commercial result was close to nil," Kasyanov said. "These demonstrations of being an energy superpower have cost us and will cost us very dearly," he said.
Speaking of the ban on the import of Moldovan and Georgian wine to Russia, Kasyanov said the state should compensate Russian companies for any losses suffered.

China: Our Relations with Russia Reached Heights

31.05.2006 09:36 [Neftegaz.ru] - China’s president Hu Jintao said on a presentation ahead of a regional security forum summit, that relations between China and Russia have reached an unprecedented high. Hu Jintao added that Russia is China’s most important strategic cooperation partner in an interview with journalists from member states of the Shanghai Cooperation Organization. “The volume of bilateral trade has had seven years of extremely high growth and cooperation in the fields of energy and investment has made great progress,” he said. Trade between China and Russia, who share a 4,300-km (2,700-mile) border, reached nearly $30 billion last year, and the two signed a series of energy agreements during a visit by President Vladimir Putin in March.

China Consumes More Oil

01.06.2006 13:06 [Neftegaz.ru] - China's apparent demand for oil climbed 10.8 percent in April from a year earlier, the strongest rise since 2004, after a rise in State-set fuel prices encouraged refiners to boost supplies to the domestic market. The world's second-largest oil consumer used 6.69 million barrels per day (bpd) last month, calculations based on official data showed, despite a fall in crude imports as refiners shunned soaring global markets. The spring sowing season and a booming economy also pushed up diesel consumption by more than 10 percent, although shortages spreading across the southeast for most of April limited consumption in some areas.

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