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Russia: Schroeder And Putin Pledge Partnership

Russian President Vladimir Putin and German Chancellor Gerhard Schroeder this afternoon wrapped up a two-day meeting in Saint Petersburg. While the two countries have strong economic ties, Russia's foreign debt-servicing problems -- as well as internal problems like the war in Chechnya and an apparent crackdown on the independent press -- have contributed to an overall cooling of relations in recent months.

Moscow, 10 April 2001 (RFE/RL) -- Saint Petersburg is the city that symbolizes both Russia's first overtures to the West -- it was founded three centuries ago (1703) by Peter the Great, an ardent admirer of western Europe -- and its long and costly ordeal holding off Nazi invaders.

After two days of talks in the historic city, Russian President Vladimir Putin and German Chancellor Gerhard Schroeder today pledged a "partnership" between the two countries. Putin said that his native city had become "the symbol of a civilized unity between Russia and Europe" and the summit, accordingly, was marked by ceremonial gestures meant to signal warmer bilateral relations.

Schroeder laid a wreath at a Saint Petersburg war cemetery and spoke to war veterans in an emotion-laden ceremony of reconciliation. Half-a-million people, most of them civilians, died during almost three years of a Nazi siege of Leningrad.

Schroeder's own father died in the war on what the Germans called the "Eastern front."

The German chancellor also pledged that inscriptions by Soviet soldiers on Berlin's Reichstag building, dating back to the city's capture by Soviet forces in 1945, would not be erased. He called them "an important part of history."

After an informal start yesterday -- the two leaders strolled through the city and had a beer in a tavern -- Putin and Schroeder settled down to business today. What Schroeder called Putin's "excellent" German -- perfected during his years as a KGB agent in East Germany -- was said to have helped the two men establish rapport.

Putin stressed that relations with Germany were crucial to his country's development.

"Relations between Germany and Russia have been developing quite successfully lately. One could say that in terms of bilateral trade, the drop that we observed a year-and-a-half ago has been corrected. Last year, trade volume reached 41.5 billion marks (more than $19 billion)."

Germany is Russia's number one Western investor. It is also a major market for Russian energy resources, with one-third of Germany's natural gas and one-fifth of its oil coming from Russia. After a two-year lull following Russia's 1998 financial crisis, German exports jumped by 44 percent in 2000.

Schroeder made clear from the start of his visit that he didn't want the dispute over Russia's NTV television network to overshadow discussions of key geopolitical issues such as U.S. plans for a national missile defense and European Union and NATO expansions to the east.

He did fulfill a promise to appear on Radio Ekho Moskvy, which belongs to the same embattled group as NTV -- a gesture that some interpreted as support for the TV network. But in his answers to listeners' questions, Schroeder chose his words carefully: "I have always understood that journalism is a democratic freedom," he said. "In that, I agree with the president [Putin]."

Schroeder also said that he had spoken "a lot about the issue" of media freedom with Putin.

Putin spoke out about NTV publicly for the first time since the partially state-owned gas giant Gazprom took control of the network last week. He explained his hesitancy about intervening:

"All the participants in this complex case are trying to involve the head of state or to win over the international community. I don't think that I should get into this mess and dredge up everything that was done over past years."

Apart from East-West questions, a major issue discussed at the summit were ongoing negotiations between Russia and the so-called Paris Club of creditor nations over Moscow's $48 billion debt. Germany is due repayment on 40 percent of the debt.

The talks served to relaunch the plan first advanced by Russia last year, under which Moscow would pay back part of its debt with stock shares in attractive Russian companies. The offer had initially stalled over a misunderstanding: creditors expected shares in big companies like Gazprom, while Russia was actually offering stakes in mid-sized, non-strategic enterprises.

Now, according to a high-level Russian official (Deputy Economic Development Minister Ivan Materov, as quoted in the "Vremya Novostey" daily), several investment projects have been agreed upon in principle with Germany. They include a methanol plant in Arkhangelsk, a cement factory in Perm, and a baby-food processing plant near Moscow.

But for Schroeder, the most attractive investment offer was some 48 million tons of oil from the Prirazlomnoye reserve, under the Barents Sea. The chancellor told Ekho Moskvy radio: "Above all, the gas and oil energy sector is interesting for Germany."

Schroeder emphasized that Russia must ensure strict guarantees for all investors. He suggested that Russia was quite capable of honoring its post-Soviet debt, and implied that the debt-for-investment exchange was only a partial solution to its overall debt problem.

Working in parallel to the summit, a Russian-German forum brought together 130 representatives from both countries under the name "Saint Petersburg Dialogue." The forum is intended to increase communications between the two countries in culture, media, and particularly, business. The initiative is said to have been proposed by Putin during an earlier meeting with Schroeder last year in Moscow.

The forum is also expected to establish a bilateral agency to coordinate the future implementation of debt-for-investments projects.

But some Russian businessmen reject both the forum and the debt-for-investments scheme as too bureaucratic. The Russian daily "Vedomosti" today quoted the head of a major Saint Petersburg energy company, Andrei Likhachev, as saying that if Germans wished to invest in Russia, they had best do so by contacting companies directly with what he called minimal "bureaucratic intermediaries."