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Russia: Schroeder-Putin Summit May Lead To Progress On Debt Issue

German Chancellor Gerhard Schroeder and Russian President Vladimir Putin meet in the German city of Weimar today for two days of talks that could lead to progress in the long-standing dispute over the repayment of Moscow's Soviet-era debt to Berlin. The summit agenda is also likely to include possible military action against Iraq, the crisis in the Middle East, and the return of confiscated German art treasures.

Munich, 9 April 2002 (RFE/RL) -- The German Foreign Ministry says cautiously that "progress might be possible" in the long-running dispute over the repayment of Russia's Soviet-era debts when Russian President Vladimir Putin holds talks today and tomorrow with German Chancellor Gerhard Schroeder.

A spokeswoman for the German Foreign Ministry, Linda Meyer, noted that Putin described it to German correspondents in Moscow over the weekend as a "purely technical problem" of exchange rates and said there is a chance of agreement at the meeting in Weimar, in the former East Germany. "I will not speculate on what might be agreed in Weimar, but yes, there is a chance of progress on this issue."

The debt was owed to the former German Democratic Republic and was taken over by the German government after reunification. It amounts to 6.4 billion in so-called transferable rubles. Transferable rubles were the monetary unit of Comecon, the former trade organization of communist countries.

At issue is the rate at which this should be converted into Western currency. Germany has set an exchange rate of one transfer ruble to the U.S. dollar, which Moscow considers too high. Berlin recently lowered its demands and is now asking for a payment of $1.2 billion, but Russia says it is willing to pay only $800 million.

The Berlin spokeswoman said intensive negotiations have been underway for some time in the hope of settling the matter, which has clouded relations between Berlin and Moscow.

Germany's ambassador to Moscow, Ernst-Jorg von Studnitz, said recently he hopes the issue will be resolved in Weimar this week.

According to German officials, the two leaders may also use the Weimar summit to discuss relations between Russia and NATO. NATO is pressing for a so-called "19 plus one" formula -- the 19 members of NATO plus Russia -- for discussions on matters of mutual interest. Russia has made it clear at many international-security meetings that it is unhappy with this proposal.

Instead, Moscow is advocating a mechanism completely separate from previous NATO structures. German diplomats say Russia envisages creating a substitute for the 55-nation Organization for Security and Cooperation in Europe (OSCE) and giving it the right to decide certain European security issues, independent of NATO.

Diplomats at both NATO and the OSCE say Moscow has been pursuing this idea for at least 10 years, without success.

The German Foreign Ministry says the controversy over a possible U.S.-led military campaign to topple Iraqi leader Saddam Hussein will also be on the agenda in Weimar. On the weekend, U.S. President George W. Bush renewed charges that Saddam is developing weapons of mass destruction.

Putin told German journalists in Moscow on Sunday that Russia has seen no proof that Iraq supports the Al-Qaeda terrorist network. In Germany, Schroeder has been cautious in his public comments about support for a possible military campaign against Iraq, but some members of his government, particularly Foreign Minister Joschka Fischer, publicly oppose any military action.

Schroeder said in February his government is applying pressure on Baghdad to allow the return of United Nations weapons experts to investigate whether Iraq is developing weapons of mass destruction. Saddam ordered international inspectors to leave in December 1998.

At the Weimar summit, Putin will also be faced with new requests from Germany to return more of the thousands of works of art taken to the Soviet Union during World War II. German experts estimate the number of such confiscated works at around 134,000. Many Russians believe these works should be retained as compensation for Russian art treasures destroyed by the Nazis during the war.

Russia has so far returned only a few items, but last Friday the Russian State Duma approved the return of 111 stained-glass windows taken from the Church of St. Mary in the eastern German city of Frankfurt-on-the-Oder. The 14th-century windows have been stored in the Hermitage in St. Petersburg.

The German Foreign Ministry spokeswoman, Linda Meyer, says the return of German art treasures taken during the war is a sensitive topic but one that she hopes Putin will help resolve. "The return of art treasures to Germany is a controversial issue for many Russians and requires patience and a good atmosphere between our two countries. We hope President Putin will help obtain the return of more works of art."

Other issues expected to be discussed by Schroeder and Putin include freedom of the media in Russia, which is viewed with concern by many in Germany, and the fight against drug smugglers and illegal immigration.

Schroeder and Putin are also expected to issue a statement on the escalating crisis in the Middle East.