Interview to the French Newspaper Le Figaro
November, 2008
E. MOUGOTTE: Mr President, I would like to thank you sincerely for giving your first interview to the foreign press since the election of President Obama to Figaro Newspaper. Many observers were very surprised by your initial reaction. You threatened to deploy missiles in Kaliningrad. Isn’t there the risk that this could introduce conflict to your relations with the new American President?
DMITRY MEDVEDEV: You know, I would not like to make a connection between my speech on November 5 and any political events other than my Address to the Federal Assembly itself. In other words, there is no connection to the elections in the United States or to any other political events abroad. This was a domestic address. Of course, given that the President addresses the Federal Assembly only once a year, I could not but react to a number of important international events and to the threats that our country faces. One of these is the current U.S. Administration’s decision to deploy a missile defence system in Europe, and this without consolidated agreement from the European countries and without even preliminary agreement from NATO, but on the basis of bilateral agreements with a number of countries. We always asked our American partners one and the same question: why do you need this system, how effective will it be, and who is it directed against? But we have not received a clear answer to any of these questions. Moreover, we proposed a different step: setting up a global defence system using our radar facilities and the radar facilities of our closest partners such as Azerbaijan. But no progress has been made on any of these initiatives. We therefore had to take measures in response sooner or later. My predecessor said this, and I said the same a while ago. We have no choice but to react to what are essentially unilateral decisions that our American colleagues have taken. And I set out our response in my Address to the Federal Assembly. I think that this is a completely appropriate response. It is not we who began all of this. We are simply responding to the unilateral decisions on deploying missiles and a radar facility. But we could reconsider this response if the new U.S. Administration is ready to once again review and analyse all the consequences of its decisions to deploy the missiles and radar facilities, analyse their effectiveness and a number of other factors, including how appropriate these means are as a response to the threat from the so-called rogue states. The first reaction we have seen from the new U.S. Administration gives us grounds for hope. In any event, our future partners are reflecting on how useful and effective this system could be, and so it seems that we do have something to discuss. We are ready for talks, and at the same time we are also ready for the ‘zero option’. This would be a completely normal way out of this situation. Moreover, we are ready to continue work on the idea of a global defence system in which the United States, the European Union countries and the Russian Federation would all take part. As for my relations with Barack Obama, the President-Elect, I had a very good conversation with him. I hope that we will succeed in building a full and normal partnership with the new administration and find solutions to some of the complex issues that we and our colleagues in the current administration have not managed to resolve. The new President of the United States has a large margin of public confidence. He has been elected at a very difficult time and I wish him success in the work he is about to undertake.
E. MOUGOTTE: Will you have the opportunity to meet with Obama during the G-20 summit in Washington?
DMITRY MEDVEDEV: This is really a domestic matter, and as far as I know they are in the process of deciding whether it is appropriate for the President-Elect to be present at this kind of event, given that there is still an incumbent President in office. In any case, the President-Elect and I agreed that we will meet without delay and obstruction. This meeting is important for the United States and for the Russian Federation.
E. MOUGOTTE: You are about to set off for Nice to take part in the Russia-EU summit. We know that a number of EU members have expressed concern over Russia maintaining military contingents in South Ossetia and Abkhazia. Moreover, the contingent is bigger in number than was the contingent in place there before August 7. Do you plan to reduce the size of the Russian contingent in South Ossetia and Abkhazia? Second, is your decision to recognise the independence of South Ossetia and Abkhazia a final decision?
DMITRY MEDVEDEV: I will start by answering the second question: our decision is final and irreversible. These are not joking matters. We have recognised these two new subjects of international law. From the point of view of international law, these two subjects now exist. As for our military contingent, I draw your attention to the fact that not a single document, including my joint plan with President Nicholas Sarkozy, stipulates any rules for this contingent. What we agreed on was clearing the way to settling the conflict and the withdrawal of peacekeepers and the reinforced contingent at the time when military units were in place there. As for the current situation, it is regulated by bilateral agreements with these two new subjects of international law. The size of the contingent is determined by Russia’s agreements with South Ossetia and Abkhazia respectively, and we will decide ourselves what size contingent is needed, where it will be stationed, and what military bases will be present there. These steps are all being taken in the interest of defending these two new subjects of international law, protecting the people who live there, and making sure another humanitarian disaster does not take place. The size of this contingent has to be sufficient for fulfilling these missions.
E. MOUGOTTE: President Nicholas Sarkozy has reached an agreement with the other leaders of the EU member countries to renew talks with Russia on concluding a new strategic partnership agreement. What does Russia hope to see from this strategic partnership with the EU?
DMITRY MEDVEDEV: First of all, I want to say that I give due recognition to the efforts the President of France has made and is making now to smooth the way towards a full, productive, long-term and mutually advantageous dialogue between Russia and the European Union. He has really done very well indeed in this work. We do indeed seek these kinds of relations with the European Union and we think that this is vital for Europe and for Russia because we share the same continent, have open economies, and are all interested in reciprocal investment. Europe receives energy supplies from Russia, and we purchase a number of important goods in Europe. Our bilateral trade with France alone comes to more than $16 billion a year and is growing, and we have investment that comes to billions of dollars every year. These are serious figures, and this is just with one of the EU member countries. We therefore need a serious and full-fledged foundation for our relations and it is the agreement that will give us this foundation. We therefore welcome the decision to resume talks and soon, in Nice, I will discuss this with France, the country currently holding the EU presidency, with my colleague Nicholas Sarkozy and my other colleagues. Russia is an integral part of Europe. It always has been and always will be. We have an interest in as close a partnership with the EU as possible.
E. MOUGOTTE: Can you name some specific areas where cooperation between France and Russia could develop most intensively?
DMITRY MEDVEDEV: Yes, of course. Why not? We have several big projects on which we are working together well. I will start with the energy sector. We have big projects with the French companies that traditionally buy oil and gas from Russia, companies like Total, for example. These are multi-billion-dollar investment projects for the future. We are working together not just in the energy sector. We also have a number of projects in high technology, in the aviation industry, for example, and in the field of developing various modern materials. This gives an idea of the wide range of fields in which we work together. I note too that we are interested in attracting French investment in the Russian economy and we hope that the French economy will in its turn welcome Russian investment. This is the most important area that ties us together. Now we need to find answers to the difficult challenges the financial crisis has put before us, and this is something we need to do together.
E. MOUGOTTE: This is precisely the subject of my next question. This week, you will take part in the G-20 summit in Washington, which will examine ways to overcome the financial and economic crisis. Will you be taking specific proposals for reforming the financial system with you to Washington?
DMITRY MEDVEDEV: I will not be simply taking proposals but have already sent them. I have spoken with Nicholas Sarkozy and with other colleagues, Federal Chancellor [of Germany] Angela Merkel, for example, Italian Prime Minister Silvio Berlusconi and British Prime Minister Gordon Brown about the situation in the world economy and the crisis that has hit the global financial system. We have already sent our proposals. I do not think I will be letting out any secret in saying that we share the same views on many issues: on the nature and origin of this crisis, and on the responses we should take. I think that what we need to discuss is a whole complex of solutions that concern ensuring long-term financial stability in general and reforming the financial system as it exists now. In other words, we need to answer two big questions: how to respond to the current crisis and minimise its consequences, and how to prevent new crises. Regarding the future of the financial system, it needs to be made a lot more transparent, predictable and manageable. It needs to be based upon a solid foundation of international agreements, and we need to establish a new or partially reformed system of international institutions, including the upper echelon credit institutions. We need to establish a new system for corporate reporting, and for risk insurance, and we need a clearer and more transparent system of accounting and financial reporting. These are all things we need to discuss right now, and this is why we have proposed examining in addition what we have called ‘the idea of early warning of emerging crises’. This is a system that should be accepted in all countries and that should work in the interests of all and not in the interests of just one country, even if it is the biggest and strongest. Overall, what we need to do is lay the foundations for a new Bretton Woods package, for a new system of Bretton Woods agreements.
E. MOUGOTTE: Russia will probably also feel the effects of the economic crisis and the economic downturn that it brings with it. Is Russia ready to carry out far-reaching plans to reinvigorate its economy and prevent a recession? Perhaps it could consider a plan similar to the one China has just announced?
DMITRY MEDVEDEV: Yes, of course, this is the biggest challenge at the moment. Our entire government is working on minimising the consequences of the financial crisis right now. We have taken a number of urgent measures to improve the liquidity situation in the banking sector and in the real sector of the economy. But this does not mean that this is all we can do. We will keep close watch on the situation and will try to take the most appropriate action. We are making use of our partners’ experience too. We are following the decisions the European Union is taking and to a great extent we are working synchronously in some areas and in similar directions in others. We are also following the decisions our Chinese friends have taken. But we need to take into account the size and nature of each country’s economy of course. There is not a standard recipe, even though this crisis is having an effect on practically all countries.
E. MOUGOTTE: Is the issue of nationalising banks on the agenda? This could make it possible to make better use of existing credit resources, given that we have seen an outflow of capital abroad of late.
DMITRY MEDVEDEV: Yes, the outflow of capital has been quite sizeable, but this is not a reason to nationalise banks. This is not the issue. We need to maintain the big banks, the banks most important in ensuring the circulation of money resources throughout our country. That is the first point. Second, and just as important, we need to protect people’s deposits. Practically all deposits in Russia are guaranteed by the state. We also need to monitor the situation closely, of course. If need be, we will take recovery measures right up to transferring a block of shares to state ownership, for example, as has been done with good results in the United States, Britain and some other countries. But even if there does end up being a partial transfer of ownership to the state, I think that this would be nevertheless just a temporary measure and these shares would later be sold. I said in my Address that we do not need a state-owned economy. What we need is an effective market economy based on private ownership.
E. MOUGOTTE: The drop in oil prices has had a serious impact on the Russian Federation’s budget. Do you think that oil prices will start rising again?
DMITRY MEDVEDEV: Any radical drop or any sudden speculative rise in energy prices always creates instability. Of course it does not make us happy to see oil prices drop below the reasonable limits that all of the oil exporting countries see today as being within roughly the same price range. But our economy and our budget overall are quite well insulated against this kind of sudden drop in oil prices. We have the Reserve Fund, which was previously known as the stabilisation fund, and it allows us to soften the impact of these problems and not have to reduce budget allocations for social development and for economic development in general.
[...]
DMITRY MEDVEDEV: You know, I would not like to make a connection between my speech on November 5 and any political events other than my Address to the Federal Assembly itself. In other words, there is no connection to the elections in the United States or to any other political events abroad. This was a domestic address. Of course, given that the President addresses the Federal Assembly only once a year, I could not but react to a number of important international events and to the threats that our country faces. One of these is the current U.S. Administration’s decision to deploy a missile defence system in Europe, and this without consolidated agreement from the European countries and without even preliminary agreement from NATO, but on the basis of bilateral agreements with a number of countries. We always asked our American partners one and the same question: why do you need this system, how effective will it be, and who is it directed against? But we have not received a clear answer to any of these questions. Moreover, we proposed a different step: setting up a global defence system using our radar facilities and the radar facilities of our closest partners such as Azerbaijan. But no progress has been made on any of these initiatives. We therefore had to take measures in response sooner or later. My predecessor said this, and I said the same a while ago. We have no choice but to react to what are essentially unilateral decisions that our American colleagues have taken. And I set out our response in my Address to the Federal Assembly. I think that this is a completely appropriate response. It is not we who began all of this. We are simply responding to the unilateral decisions on deploying missiles and a radar facility. But we could reconsider this response if the new U.S. Administration is ready to once again review and analyse all the consequences of its decisions to deploy the missiles and radar facilities, analyse their effectiveness and a number of other factors, including how appropriate these means are as a response to the threat from the so-called rogue states. The first reaction we have seen from the new U.S. Administration gives us grounds for hope. In any event, our future partners are reflecting on how useful and effective this system could be, and so it seems that we do have something to discuss. We are ready for talks, and at the same time we are also ready for the ‘zero option’. This would be a completely normal way out of this situation. Moreover, we are ready to continue work on the idea of a global defence system in which the United States, the European Union countries and the Russian Federation would all take part. As for my relations with Barack Obama, the President-Elect, I had a very good conversation with him. I hope that we will succeed in building a full and normal partnership with the new administration and find solutions to some of the complex issues that we and our colleagues in the current administration have not managed to resolve. The new President of the United States has a large margin of public confidence. He has been elected at a very difficult time and I wish him success in the work he is about to undertake.
E. MOUGOTTE: Will you have the opportunity to meet with Obama during the G-20 summit in Washington?
DMITRY MEDVEDEV: This is really a domestic matter, and as far as I know they are in the process of deciding whether it is appropriate for the President-Elect to be present at this kind of event, given that there is still an incumbent President in office. In any case, the President-Elect and I agreed that we will meet without delay and obstruction. This meeting is important for the United States and for the Russian Federation.
E. MOUGOTTE: You are about to set off for Nice to take part in the Russia-EU summit. We know that a number of EU members have expressed concern over Russia maintaining military contingents in South Ossetia and Abkhazia. Moreover, the contingent is bigger in number than was the contingent in place there before August 7. Do you plan to reduce the size of the Russian contingent in South Ossetia and Abkhazia? Second, is your decision to recognise the independence of South Ossetia and Abkhazia a final decision?
DMITRY MEDVEDEV: I will start by answering the second question: our decision is final and irreversible. These are not joking matters. We have recognised these two new subjects of international law. From the point of view of international law, these two subjects now exist. As for our military contingent, I draw your attention to the fact that not a single document, including my joint plan with President Nicholas Sarkozy, stipulates any rules for this contingent. What we agreed on was clearing the way to settling the conflict and the withdrawal of peacekeepers and the reinforced contingent at the time when military units were in place there. As for the current situation, it is regulated by bilateral agreements with these two new subjects of international law. The size of the contingent is determined by Russia’s agreements with South Ossetia and Abkhazia respectively, and we will decide ourselves what size contingent is needed, where it will be stationed, and what military bases will be present there. These steps are all being taken in the interest of defending these two new subjects of international law, protecting the people who live there, and making sure another humanitarian disaster does not take place. The size of this contingent has to be sufficient for fulfilling these missions.
E. MOUGOTTE: President Nicholas Sarkozy has reached an agreement with the other leaders of the EU member countries to renew talks with Russia on concluding a new strategic partnership agreement. What does Russia hope to see from this strategic partnership with the EU?
DMITRY MEDVEDEV: First of all, I want to say that I give due recognition to the efforts the President of France has made and is making now to smooth the way towards a full, productive, long-term and mutually advantageous dialogue between Russia and the European Union. He has really done very well indeed in this work. We do indeed seek these kinds of relations with the European Union and we think that this is vital for Europe and for Russia because we share the same continent, have open economies, and are all interested in reciprocal investment. Europe receives energy supplies from Russia, and we purchase a number of important goods in Europe. Our bilateral trade with France alone comes to more than $16 billion a year and is growing, and we have investment that comes to billions of dollars every year. These are serious figures, and this is just with one of the EU member countries. We therefore need a serious and full-fledged foundation for our relations and it is the agreement that will give us this foundation. We therefore welcome the decision to resume talks and soon, in Nice, I will discuss this with France, the country currently holding the EU presidency, with my colleague Nicholas Sarkozy and my other colleagues. Russia is an integral part of Europe. It always has been and always will be. We have an interest in as close a partnership with the EU as possible.
E. MOUGOTTE: Can you name some specific areas where cooperation between France and Russia could develop most intensively?
DMITRY MEDVEDEV: Yes, of course. Why not? We have several big projects on which we are working together well. I will start with the energy sector. We have big projects with the French companies that traditionally buy oil and gas from Russia, companies like Total, for example. These are multi-billion-dollar investment projects for the future. We are working together not just in the energy sector. We also have a number of projects in high technology, in the aviation industry, for example, and in the field of developing various modern materials. This gives an idea of the wide range of fields in which we work together. I note too that we are interested in attracting French investment in the Russian economy and we hope that the French economy will in its turn welcome Russian investment. This is the most important area that ties us together. Now we need to find answers to the difficult challenges the financial crisis has put before us, and this is something we need to do together.
E. MOUGOTTE: This is precisely the subject of my next question. This week, you will take part in the G-20 summit in Washington, which will examine ways to overcome the financial and economic crisis. Will you be taking specific proposals for reforming the financial system with you to Washington?
DMITRY MEDVEDEV: I will not be simply taking proposals but have already sent them. I have spoken with Nicholas Sarkozy and with other colleagues, Federal Chancellor [of Germany] Angela Merkel, for example, Italian Prime Minister Silvio Berlusconi and British Prime Minister Gordon Brown about the situation in the world economy and the crisis that has hit the global financial system. We have already sent our proposals. I do not think I will be letting out any secret in saying that we share the same views on many issues: on the nature and origin of this crisis, and on the responses we should take. I think that what we need to discuss is a whole complex of solutions that concern ensuring long-term financial stability in general and reforming the financial system as it exists now. In other words, we need to answer two big questions: how to respond to the current crisis and minimise its consequences, and how to prevent new crises. Regarding the future of the financial system, it needs to be made a lot more transparent, predictable and manageable. It needs to be based upon a solid foundation of international agreements, and we need to establish a new or partially reformed system of international institutions, including the upper echelon credit institutions. We need to establish a new system for corporate reporting, and for risk insurance, and we need a clearer and more transparent system of accounting and financial reporting. These are all things we need to discuss right now, and this is why we have proposed examining in addition what we have called ‘the idea of early warning of emerging crises’. This is a system that should be accepted in all countries and that should work in the interests of all and not in the interests of just one country, even if it is the biggest and strongest. Overall, what we need to do is lay the foundations for a new Bretton Woods package, for a new system of Bretton Woods agreements.
E. MOUGOTTE: Russia will probably also feel the effects of the economic crisis and the economic downturn that it brings with it. Is Russia ready to carry out far-reaching plans to reinvigorate its economy and prevent a recession? Perhaps it could consider a plan similar to the one China has just announced?
DMITRY MEDVEDEV: Yes, of course, this is the biggest challenge at the moment. Our entire government is working on minimising the consequences of the financial crisis right now. We have taken a number of urgent measures to improve the liquidity situation in the banking sector and in the real sector of the economy. But this does not mean that this is all we can do. We will keep close watch on the situation and will try to take the most appropriate action. We are making use of our partners’ experience too. We are following the decisions the European Union is taking and to a great extent we are working synchronously in some areas and in similar directions in others. We are also following the decisions our Chinese friends have taken. But we need to take into account the size and nature of each country’s economy of course. There is not a standard recipe, even though this crisis is having an effect on practically all countries.
E. MOUGOTTE: Is the issue of nationalising banks on the agenda? This could make it possible to make better use of existing credit resources, given that we have seen an outflow of capital abroad of late.
DMITRY MEDVEDEV: Yes, the outflow of capital has been quite sizeable, but this is not a reason to nationalise banks. This is not the issue. We need to maintain the big banks, the banks most important in ensuring the circulation of money resources throughout our country. That is the first point. Second, and just as important, we need to protect people’s deposits. Practically all deposits in Russia are guaranteed by the state. We also need to monitor the situation closely, of course. If need be, we will take recovery measures right up to transferring a block of shares to state ownership, for example, as has been done with good results in the United States, Britain and some other countries. But even if there does end up being a partial transfer of ownership to the state, I think that this would be nevertheless just a temporary measure and these shares would later be sold. I said in my Address that we do not need a state-owned economy. What we need is an effective market economy based on private ownership.
E. MOUGOTTE: The drop in oil prices has had a serious impact on the Russian Federation’s budget. Do you think that oil prices will start rising again?
DMITRY MEDVEDEV: Any radical drop or any sudden speculative rise in energy prices always creates instability. Of course it does not make us happy to see oil prices drop below the reasonable limits that all of the oil exporting countries see today as being within roughly the same price range. But our economy and our budget overall are quite well insulated against this kind of sudden drop in oil prices. We have the Reserve Fund, which was previously known as the stabilisation fund, and it allows us to soften the impact of these problems and not have to reduce budget allocations for social development and for economic development in general.
[...]
Source: http://www.cdi.org/russia/johnson/2008-208-7.cfm
In other news:
Russia's Medvedev Sets Off For Latin American Tour
Russian President Dmitry Medvedev began on Friday a seven-day tour of Portugal and four Latin American countries, during which he will attend an APEC summit, a presidential aide said on Friday. Medvedev will discuss his initiative to sign a pan-European security treaty and measures to fight the consequences of the global financial crisis with his Portuguese counterpart Anibal Cavaco Silva and Prime Minister Jose Socrates on Friday, Sergei Prikhodko said. After Tuesday talks with his Russian counterpart, Sergei Lavrov, Portuguese Foreign Minister Luis Amado said Lisbon welcomed Medvedev's security pact initiative and urged the rest of Europe to follow suit. Medvedev will take part in the APEC summit in Lima, Peru, on Saturday and Sunday, and hold a number of bilateral meetings with the U.S., Chinese, Japanese and Australian leaders. The Russian president is also expected to meet with his Indonesian and Philippine counterparts on the sidelines of the summit. After the summit, Medvedev will stay on in Lima for an official visit, including a Monday meeting with Peruvian President Alan Garcia, before leaving for Brazil. Brazilian political analysts and experts on Russia expect Medvedev's three-day stay in Brazil, centered on talks with President Luiz Lula da Silva on Wednesday, to play a crucial role for all levels of bilateral contacts. "For a number of reasons - historical, geographical - we [Russia and Brazil] are hardly rivals in any major sphere. On the contrary, our economies are mutually complementary, which offers a host of opportunities for cooperation," said Gilberto Ramos, who heads the Brazil-Russian chamber of industry and commerce. Bilateral trade has already exceeded $7 billion this year, and Brazil and Russia plan to increase annual investment to $10 billion by 2010, Ramos said. On a visit to Caracas, the first by a Russian head of state, Medvedev will meet late on Wednesday with his Venezuelan counterpart Hugo Chavez. The two leaders will give a joint news conference after the signing of bilateral documents. Cuba is the last country on Medvedev's itinerary. On Thursday, he will hold talks there with Cuban leader Raul Castro before returning to Moscow. Medvedev will be accompanied by a number of ministers, including Deputy Prime Minister Igor Sechin and Foreign Minister Sergei Lavrov, the heads of several government departments and leading businessmen.
Source: http://en.rian.ru/russia/20081121/118450514.html
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