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Russia: Schroeder, Putin Resolve Issue Of Soviet-Era Debt To Germany

Russian President Vladimir Putin and German Chancellor Gerhard Schroeder have ended a long-standing dispute over the repayment of Russia's Soviet-era debts talks in the eastern German city of Weimar. To the surprise of many, Germany settled for a sum much less than expected. Putin also secured a public endorsement from Schroeder for Moscow's attempts to create a new framework for its relations with NATO.

Munich, 11 April 2002 (RFE/RL) -- Under an agreement reached at a summit in the eastern German city of Weimar yesterday, Russia will pay a total of 500 million euros to Berlin in a final settlement of its Soviet-era debts.

Many German experts were surprised at the figure. Until recently, Berlin was asking for a payment of almost 1.4 billion euros, while Russia had said it was willing to pay about 900 million euros.

Schroeder said the debt settlement shows that both sides want to focus on the present and the future rather than dwell on the past. He said the negotiations over the debt were intensive.

"In addition, we found a solution for [determining the value] of the transferable ruble. Our respective finance ministers discussed it intensively and finally agreed on a solution, according to which Russia will pay a sum of around 500 million euros, around 1 billion marks," Schroeder said.

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

A German Foreign Ministry spokeswoman, Linda Meyer, said Russia expects to transfer about two-thirds of the amount in 2002 and that the remainder will be paid in two installments in 2003 and 2004.

Russia and Germany have been arguing since 1992 over the size of the debt and the rate at which it should be exchanged into Western currency. Meyer said the debt payment is part of a package of financial deals.

"They include a resolution of the problems facing a German company in Russia and a promise from Moscow to make a greater effort to settle its debts with the Club of Paris," Meyer said.

Chancellor Schroeder described Russia as an important market that offers great opportunities for Germany. He noted that German exports to Russia rose by 50 percent in 2001.

Schroeder's comments were emphasized by agreements announced by business leaders negotiating on the sidelines of the Weimar summit, who said they signed agreements with their Russian colleagues valued at 1.5 billion euros.

Putin also secured a public endorsement from Schroeder for Moscow's attempts to create a new framework for its relations with NATO. Putin and Russian Foreign Minister Igor Ivanov have said publicly that they are dissatisfied with the so-called "19+1" formula -- the 19 members of NATO, plus Russia for discussions on matters of mutual interest. Putin says Russia has no opportunities for influencing decisions in this body.

Schroeder told the news conference that he found Russia's search for a new mechanism in which it would have a real role in decision-making both "understandable and reasonable."

"We talked about the need to improve relations in the group of 20," Schroeder said. "The substance of our discussions is that there should not only be consultations but a right to share in the decision-making process on some important issues."

Putin told the news conference that Moscow is not seeking a right of veto on NATO's decisions, nor does it question NATO's right to collective action to defend its members.

The Russian and German leaders also agreed that pressure should be maintained on Iraq to secure the return of United Nations weapons experts to investigate whether Iraq is developing weapons of mass destruction. Iraqi President Saddam Hussein ordered international inspectors to leave in 1998. Officials said Putin and Schroeder also discussed a possible U.S.-led military campaign to topple Saddam, but neither Putin nor Schroeder commented publicly on these discussions.

Foreign Ministry spokeswoman Meyer said Putin and Schroeder have developed a good personal relationship and address each other now by their first names.

"It certainly makes it easier to discuss problems and difficult issues when there is a friendly relationship. There is no stiffness between them," Meyer said.

In an unusual move, the Russian and German leaders were interviewed earlier in the week on a popular late-night German television show. Putin is the first Russian leader to appear in such an informal setting in Germany. Although his German is fluent, he answered questions in Russian, which were then translated.

On the program, Putin strongly defended Russian actions in Chechnya and said the Chechen rebels had committed many atrocities. He also said Russian soldiers who have committed crimes will be brought before the courts.

Putin said he supports free media in Russia and believes a free press is a fundamental of democracy, but he said some individuals and groups want to take over the media in Russia for their own purposes.

The program's jovial host, Alfred Biolek, also recalled that Putin had once been a KGB officer in communist East Germany. Biolek asked Putin if he had resembled the fictional British spy James Bond.

Putin laughed and said his duties had "nothing to do with shooting from an automatic." Putin said his job had been routine -- mostly analyzing information.