Tuesday, September 26, 2006

Trilateral Tango

From RFE/RL Newsline, September 25:

NO 'TRIUMPHALISM' AT TRILATERAL SUMMIT... The September 23 summit of Russian President Vladimir Putin, France's Jacques Chirac, and German Chancellor Angela Merkel at Compiegne, near Paris, lacked the "triumphalism" of meetings of the three countries' leaders under Merkel's predecessor, Gerhard Schroeder, Deutsche Welle reported (see "RFE/RL Newsline," September 21, 2006). As Merkel had insisted, all three leaders carefully avoided referring to their relationship on September 23 as an "axis" and stressed that their meeting was an exchange of ideas and not directed against any third party. She has long made it clear that she intends to follow the policy of her mentor, former Chancellor Helmut Kohl, of working closely with the smaller European countries, as well as with France and the other larger ones, and of strengthening the trans-Atlantic partnership. Putin, Chirac, and Merkel agreed on the importance of negotiations in dealing with Iran and on the role of international peacekeepers in helping get Lebanon back on its feet. Merkel added that it is equally important to ensure Israel's right to exist. At the final press conference, the attention of French journalists in particular was, however, centered not on the summit but on an alleged intelligence leak by French intelligence to a regional newspaper on the supposed death of Osama bin Laden. The German broadcaster noted that Chirac found the report and the ensuing discussion "more than unpleasant." PM

...AS PUTIN SEEKS TO EASE FEARS... Speaking in Compiegne on September 23, President Putin sought to allay French and German fears over Russia's ambitions in the EADS aerospace company and its willingness to observe its agreements with foreign energy companies, specifically with France's Total regarding the Kharyaga oil field, Western and Russian media reported (see "RFE/RL Newsline," September 15, 20, 21, and 22, 2006). He said that Russia was not displaying "aggressive" behavior regarding EADS or its corporate structure but was simply "playing on the stock market." He announced the creation of a working group to study Russia's possible role in the company, but Chirac and Merkel did not address the issue. Putin added that "rumors about taking away Total's license are greatly exaggerated." Russian commentators noted on September 25, however, that it is unclear how Putin intends to deal with EU demands that Russia ratify the Energy Charter, which Moscow signed in 1994 and which would require it to open up access to its pipelines, news.ru reported (see "RFE/RL Newsline," July 17 and 18, and September 5, 2006). In Compiegne, Putin repeated earlier Russian calls for the document to be "amended." He also suggested that Europe is "afraid" of Russia because it is "big and rich." On the eve of the summit, he and Chirac announced France and Russia signed deals in the transport and aviation sectors worth $10 billion. PM

...AND OFFERS BAIT FROM SHTOKMAN. The Moscow dailies "Kommersant" and "Vremya novostei" noted on September 25 that perhaps the most important development at the September 23 Compiegne summit was Putin's offer to Chancellor Merkel of up to 45 billion cubic meters of gas from the Shtokman field over a period of 50-70 years. He asked rhetorically: "Can you imagine that volume and what it means for the economy of Europe...and Germany? It will create an absolutely stable situation in the European economy and for energy." Elsewhere, Gazprom officials declined to comment on Putin's offer, news.ru reported. Russian dailies pointed out that it has been widely assumed that most of the gas from Shtokman will be exported to North America in liquefied form and that Putin's offer is aimed at driving a wedge between the United States on the one hand and the EU, especially Germany, on the other. Russia has articulate lobbyists in Germany and offers German businesses big growth opportunities they lack at home. Putin, who is a German-speaking former KGB officer who once worked in Dresden, has used energy and other business opportunities to lock Germany into an ever closer relationship with Russia at the expense of trans-Atlantic ties, which was a long-standing Soviet policy goal. PM

FOREIGN MINISTER SEEKS TO REASSURE SHELL. Foreign Minister Sergei Lavrov said in New York on September 24 that Russia is a "long way off from backing out of agreements we have reached, no matter how difficult the conditions were when they were made," news.ru reported. He was referring to the controversy regarding Russia's recent blockage of the Sakhalin-2 gas production-sharing agreement (PSA) with Royal Dutch Shell and Japan's Mitsui and Mitsubishi (see "RFE/RL Newsline," September 19, 20, 21, and 22, 2006). Agreements with Shell, Exxon, Total, and others were concluded in the 1990s when oil prices were low and Russia sought foreign capital. Now that Russia is awash in petrodollars, the government wants to ease the foreigners out in favor of domestic, state-run firms like Gazprom and Rosneft. The excuse given by the Russian Federal Service for the Oversight of Natural Resources (Rosprirodnadzor) for blocking Sakhalin-2 is that the project has already led to damage to salmon-bearing rivers and "excessive logging" along the pipeline route. Referring to those issues, Lavrov said on September 24 that Russia's objections to the current state of Sakhalin-2 are based on environmental and not political considerations. On September 22, a U.S. State Department spokesman said that Washington is "very concerned" over Sakhalin-2 and called on Russia to "uphold [its] commitments on energy," including those it made at the July St. Petersburg summit of the Group of Eight (G8) leading industrialized countries. PM

FINANCE MINISTER SAYS RUSSIA COULD CATCH UP WITH GERMANY, U.S... Finance Minister Aleksei Kudrin told Channel One television on September 24 that "we want to create a system that would be equal in strength to the economies and financial systems of the United States or Germany. I have to say that this distance can be covered in 10 years if the country conducts a very skilled financial policy." He noted that Russia has made much progress in that respect in recent years but still has some way to go to catch up with the United States or Germany. Looking at a broader index, the World Bank said in a report released on September 15 that Russia ranks 151st among 208 countries in terms of accountability, political stability, effectiveness of the government, the quality of regulatory bodies, the rule of law, and control over corruption, which places it on a level between Swaziland and Niger (see "RFE/RL Newsline," September 18, 2006). PM
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