EU, Russia unite on economy but rights strains remain

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EU leaders pledged Tuesday to join Russia in its drive to modernize its economy at a summit marked by rare harmony but shadowed by European criticism over human rights.

EU President Herman Van Rompuy, in his first meeting with Russian President Dmitry Medvedev since the Lisbon Treaty created his post, warned that rights abuses in Russia remained of "great concern" to Europe.

Police had violently broken up opposition protests in Moscow on the eve of the summit, detaining scores of people.

"The situation for human rights defenders and journalists in Russia is of great concern for the European public at large," Rompuy told reporters at the meeting in the southern city of Rostov-on-Don.

"Another matter of concern... is the climate of impunity, particularly in Chechnya and other areas of the North Caucasus."

Talks nevertheless struck a warm tone that belied relations often marred by disputes as both sides -- humbled by the financial crisis -- strove to boost trade and investment ties.

Rompuy hailed talks as "friendly and fruitful", while Medvedev stressed they marked a "change in atmosphere" from past summits -- blotted by spats over the 2008 Georgia war and Moscow's ire over EU encroachment in its former Soviet fiefdom.

They signed a declaration pledging Europe's desire to aid Russia in its urgent drive to reform and diversify its export-driven economy, which shrank almost 8 percent in 2009 amid the crisis.

"We want to be Russia's partner in modernisation," the EU president said. "With Russia we do not need a reset, we want a fast forward."

"President Medvedev's ambition to place Russia's modernization in the 21st century of democratic values by building a modern diversified and dynamic economy... is a significant development for Russia," Rompuy stressed.

But the summit comes as the EU faces deep internal divisions over the Greek debt crisis and a sagging euro -- issues that Medvedev said have not gone unnoticed by Russia, which holds nearly half its massive reserves in euros.

"I remind you that about 40 percent of our reserves are in euros and we don't have the smallest reserves," Medvedev told reporters.

In an apparent answer to EU worries over Russia offloading its euro reserves, he said Russia would refrain from "hysterics about whatever problems pop up in other corners of the world, such as now in the European Union."

A top Russian diplomat said trade between the partners had dropped some 30 percent last year. According to the EU, the bloc's exports to Russia fell from 105 billion in 2008 to 66 billion in 2009.

But European Commission chief Jose Manuel Barroso threw a dampener on joint projects to increase trade, saying they might come to nothing if Moscow remains outside the World Trade Organization.

"We hope necessary steps will be taken," for Russia to join the WTO, he stressed. "Because truly modern economies are the ones that are open... not the ones that practise protectionist measures."

Russia, which began WTO negotiations in 1993, is the only major economic power still to join.

Meanwhile, there appeared to be little headway made on efforts to abolish mutual visa restrictions.

Medvedev chided EU leaders over their lack of unity on lifting visas for Russians, saying "the faster a consensus will be reached within the EU, the better."

He stressed Russia was ready "tomorrow" to take such steps for EU citizens, hinting that some ex-Communist EU member states were blocking a deal based on past prejudices toward their former Soviet master.

"Nothing is stopping us," Medvedev said. "The EU's position is a bit different, it is made of 27 states, each of which has their own opinion."

© 2010 AFP

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