German and Russian leaders met on October 2 in St. Petersburg, with Russia seeking to demonstrate that business is back to usual in the wake of its war with Georgia.
But at the annual summit, known as the St. Petersburg Dialogue, German Chancellor Angela Merkel rebuked Russian President Dmitry Medvedev for his country's conduct during the hostilities in Georgia two months ago.
Merkel summed up her government's reaction to Russia's behavior in Georgia with two words: "not appropriate."
In August, Russian forces rushed deep into Georgia, far beyond the borders of South Ossetia and Abkhazia in response to Georgia's effort to restore control over its two breakaway regions.
Russia then quickly recognized the independence of South Ossetia and Abkhazia and made plans to keep 7,600 Russian forces in both areas indefinitely.
Merkel's government has tried to maintain good relations with Russia. But after her talks with Medvedev, the German leader stood firm on the Western position opposing Russian operations in Georgia. Her criticism came just a day after EU monitors began security patrols in the South Caucasus country.
Medvedev, too, refused to budge, saying Russia's response was correct. And he brought up a security system, which he has been promoting recently, that would include North America and Europe with Russia. He said the current system created misunderstandings that led to the war in Georgia.
Medvedev said the latest events in the Caucasus "have shown that the current system of global security today is not capable of preventing military recklessness, so we must do everything possible to create a modern, reliable architecture of this security for the future."
Medvedev's plan would make NATO obsolete at a time when the West is moving to include more former Soviet states -- including Georgia and Ukraine -- in the Western alliance. Russia opposes these moves, just as it has opposed NATO membership for other countries that once were in the Soviet sphere of influence.
Georgia notwithstanding, Merkel spoke of the great cooperation between the two countries, especially in trade. Her entourage included not only government ministers, but also the chief executives of the German chemical company BASF and Siemens, the engineering giant.
Germany is Russia's leading European trade partner, with exports to Russia jumping more than 20 percent in the first half of this year to reach $22.3 billion. Russian exports to Germany reached $23.5 billion during the same period.
In remarks before their formal meeting, Medvedev stressed areas of agreement between himself and Merkel, especially bilateral cooperation. "We are trying to demonstrate through deeds that relations between Russia and Germany are constructive and are a factor of stability in the entire Euro-Atlantic space," he said. "And despite the fact that disagreements arise sometimes, we understand and take into account each other's interests."
Medvedev touched on another topic important to Merkel: the financial crisis in the United States. The German chancellor has urged the U.S. Congress to move quickly on a rescue plan in hopes it will keep the problem from spreading further in Europe.
The Russian president said it was time for multilateral policy-making on matters affecting international financial markets. "The time of domination by one economy and one currency has been consigned to the past once and for all," Medvedev said. "And to resolve the financial crisis caused -- as I already said before in St. Petersburg -- by financial egoism, collective decisions are needed."
Another subject was continued bilateral cooperation on the $10 billion Nord Stream project, which will bypass troublesome transit states like Ukraine by delivering Siberian gas directly to Europe through a pipeline running along the floor of the Baltic Sea.
The project has been delayed by ecological concerns and complaints from Poland and the Baltic states that Nord Stream is inconsistent with EU policy on diversifying energy sources and will only increase European dependence on Russia.