Putin swats EU criticism aside

Financial Times
George Parker
October 22, 2006

Vladimir Putin may have proved himself a combative and provocative dinner guest, but European leaders returned from a summit in Finland believing the Russian president might yet be prepared to offer them a better energy deal.

Mr Putin occasionally had his hosts staring in disbelief into their artichoke soup or choking on the rosemary grilled goose, as he made it clear he would not take lectures from Europe on issues such as human rights and corruption.

His fellow diners even smiled politely (some perhaps agreed) when he reportedly announced that the EU’s most important challenge was to “safeguard Christianity in Europe”.

In spite of the awkward nature of the dinner – some EU diplomats believe Mr Putin should not have been the guest of honour at last Friday’s European summit in Lahti – most agreed the event had been worthwhile.

Reflecting on the encounter on Sunday, European officials said Mr Putin sent out one important signal amid the bluster and the teasing: that energy would be an integral part of a new EU-Russia partnership deal.

“That wasn’t 110 per cent clear before the dinner,” said one official at the European Commission, which will prepare the negotiations on the bilateral accord. “We weren’t clear if that was Putin’s position.”

Including energy in the talks is vital for the EU, which hopes to use its economic muscle to extract concessions on energy from the Kremlin: the carrot would be a wide-ranging trade liberalisation deal.

Mr Putin said he hoped the two sides could agree a new “strategic partnership” to replace the existing partnership and co-operation agreement, which comes to an end this year.

Negotiations on the new accord start at an EU-Russia summit next month, and will take in issues such as visas, migration and terrorism as well as energy, trade and the mutual recognition of standards and regulations.

José Manuel Barroso, European Commission president, has offered a “free trade agreement” with Russia as a reward for greater access to the Russian energy market, conditional on Russia joining the World Trade Organisation.

But Mr Putin’s bravura performance over dinner in Lahti made it clear that Europe has a big task in extracting concessions from Moscow on energy. He gave no sign he was willing to ratify the energy charter treaty, which would require Russia to open Gazprom’s pipelines to other companies, saying a “different document” might be needed.

Mr Putin’s aides also denied that western oil companies were being squeezed out of the Russian market, in spite of recent decisions in the Sakhalin-2 and Shtokman fields that worked against European interests.

When challenged on the need to apply market principles to the energy sector and over Gazprom’s monopoly, Mr Putin highlighted the dominant positions of some European energy suppliers, such as Eon of Germany.

The Russian president now has a well-rehearsed list of rebuttals for European criticism. Challenged by Josep Borrell, the Spanish president of the European parliament, on corruption in Russian society, Mr Putin highlighted similar problems in city authorities on the Costa del Sol and asked how Spanish mayors were in prison. “Mafia is not a Russian word,” he added.

On human rights issues, Mr Putin raised concerns about the treatment of ethnic Russians in the Baltic states. According to one diner, he took pleasure in appearing to “confuse” Latvia and Lithuania.

While promising that the police would track down the murderers of the journalist Anna Politkovskaya, a fierce critic of the Kremlin, Mr Putin reportedly claimed she was assassinated by those who wanted to damage Russia’s image.

>From the European side there was a broadly united front over dinner – painfully stitched together by the Finnish prime minister, Matti Vanhanen – but it was coming under strain by the time the sea buckthorn mousse arrived.

The prime ministers of Denmark, Estonia and Poland were among those who went beyond the pre-agreed criticisms of Mr Putin’s role on human rights and in particular his tough treatment of the former Soviet republic of Georgia.

Mr Putin, who claimed Georgia’s military build-up around the Russian-backed regions of Abkhazia and South Ossetia was heading for “bloodshed”, glowered across the table.

That prompted France’s President Jacques Chirac, an ally of Mr Putin, to peel away the facade of European unity, arguing that the Georgia dispute should not stand in the way of long-term EU-Russia relations. “Chirac hung Georgia out to dry,” muttered one furious EU diplomat.

But Mr Vanhanen insisted the dinner had been a success. “We were very united,” he insisted. Mr Putin will test that unity to its limits when the EU-Russia negotiations start next month.