Putin says closer ties with Europe 'unavoidable'

26th November 2010, Comments 0 comments

Russia's Vladimir Putin said on Friday that closer ties with Europe were unavoidable, a day after his proposal for a free trade zone "from Lisbon to Vladivostok" met with a cool German response.

"I do not know what forms our cooperation should acquire -- will it be a common free market or will it be our associated membership in the EU," the Russian prime minister said in the German capital Berlin.

"But a rapprochement between Russia and Europe is unavoidable, if we want to be preserved as a civilization, if we want to be successful and competitive."

"Can we assume that Russia together with Europe will one day be in a single currency zone? I can assume that."

Putin, who is scheduled to have talks with Chancellor Angela Merkel later on Friday, floated a bold idea of a vast free-trade zone from Russia's eastern tip to Europe's western extremities.

But Merkel immediately poured cold water on Putin's idea, not least because of his plan to create a joint customs bloc with ex-Soviet Belarus and Kazakhstan.

"The steps that Russia has taken recently do not point in that direction," she said in Berlin in response to Putin's remarks published in Germany's Sueddeutsche Zeitung daily.

"I hear again and again news from Russia that import tariffs are, let's say, surprisingly increased," she said.

Putin, who is famous for his often abrasive style and a manner to shoot from the hip, offered however a good-humoured response to Merkel's skepticism, saying her remarks meant she was interested in Russia.

"It means that Ms Merkel read my article -- that's already good," Putin quipped to the laughter from the audience. "She is interested in what is happening in Russia."

Striking a more serious note, Putin said the Russian government was well aware of the country's problems and would work towards fixing them.

Putin also complained Europe was putting up barriers to Russian firms who wanted to continue their expansion westward.

"Sometimes it is difficult to (expand) ... due to reasons that are completely unclear to us," he told the gathering, attended by representatives of German corporate giants such as Volkswagen, Deutsche Bank and Siemens.

"One cannot work like this," he said.

As an example Putin cited a deal, which collapsed, under which General Motors would have sold a 55-percent stake in its European unit Opel to Canadian auto parts maker Magna and Russia's largest lender Sberbank.

"Has this firm become better off?" Putin asked, referring to the carmaker.

"Nothing has changed for the better there."

Merkel was ready last year to provide 4.5 billion euros (6.0 billion dollars) in guarantees to Opel if GM sold it to Magna Sberbank but GM scrapped the deal in late 2009, deciding to keep the unit.

Putin added other Russian companies such as steelmaker Severstal, oil firm Surgutneftegaz and Renova, an investment group controlled by billionaire Viktor Vekselberg, faced problems in Europe.

Another problem, Putin said, was that the European Union often did not take into account Russia when developing its gas market liberalisation reforms.

"I believe it is justified that new and fair rules in such a sensitive sphere are developed by our colleagues in the European Union, in the European Commission at least in consultation with Russia as the largest energy supplier."

© 2010 AFP

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