Merkel talks down chances of Russia-EU free trade zone

25th November 2010, Comments 0 comments

German Chancellor Angela Merkel on Thursday talked down the chances of a Russia-EU free trade zone, citing Russian tariffs and Moscow's trade relations with Kazakhstan and Belarus.

"Of course we support the idea of a free trade zone between the EU and Russia but I have to pour a bit of cold water on it. The steps that Russia has taken recently do not point in that direction."

Prime Minister Vladimir Putin on Thursday outlined a vision of a new era of closer economic cooperation between Russia and the European Union, including the creation of free trade zones.

In an unusually impassioned championing of closer ties with the EU as he starts a visit to Germany, Putin envisaged the creation of a "harmonised community of economies from Lisbon to Vladivostok.

"In the future it is possible that we will have zones of free trade and even more advanced forms of economic integration," Putin wrote in an article for the Sueddeutsche Zeitung daily, whose text was published on the Russian government website.

"In essence, we will get a continental market with a volume of trillions of euros," he said.

Putin said it was clear that current levels of cooperation between Russia and the EU did not correspond to the challenges of the future.

He wrote of the need for an "organic synthesis of two economies -- the classic, established model in the European Union and the new, developing one in Russia."

President Dmitry Medvedev often talks of the need for greater economic modernisation in Russia and closer ties with foreign partners but it is rare to hear such sentiments echoed so strongly by Putin, still seen as the de-facto number one.

The EU is Russia's largest trading partner, accounting for around one half of its foreign trade. According to the Russian federal customs agency, total trade in the first half of the year was 141.9 billion dollars, up 43 percent.

© 2010 AFP

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