Putin, Merkel seek to soothe tensions
RUSSIAN PRESIDENT VLADIMIR PUTIN, LEFT, AND GERMAN CHANCELLOR ANGELA MERKEL APPLAUD AS THEY ATTEND A "PETERSBURG DIALOG" RUSSIAN-GERMAN FORUM IN THE KREMLIN IN MOSCOW, 16 NOVEMBER 2012.|AFP PHOTO/ALEXANDER NEMENOV
On 16 November, Russian President Vladimir Putin and German Chancellor Angela Merkel attended a "Petersburg Dialog" Russian-German forum in the Kremlin in Moscow with the two sides seeking to soothe tensions over Berlin's recent criticism of the Russian record on rights.
"We want Russia to succeed," Merkel said. "We have our own ideas on how one can succeed. Our ideas don't always coincide, but what matters is that we listen to each other." Germany needs Russia for raw materials such as gas and oil, while Russia needs Germany to help in modernisation, infrastructure and health care, Merkel said.
In turn, Putin said as for political and ideological issues, Russia hears its partners. “But they hear about what's happening from very far away," he said. He accused one of the Pussy Riot members of taking part in an anti-Semitic protest while part of another radical movement. The Kremlin leader shrugged off criticism of a lack of freedom of information in Russia and said five German states had no laws guaranteeing such freedoms. "On there being no German who would be a model to us, there is such a German - that is the Federal Chancellor," Putin said.
The German Chancellor has been urged to bring up the issues of human rights and democracy during her meeting with Putin but the two countries were also expected to talk about energy and the EU economic crisis. Russia is an important energy supplier to Germany and it holds a large chunk of its foreign reserves in euros.
The European Union's ongoing probe into Gazprom over concerns it was hindering competition in Europe is expected to be addressed, too.
On the eve of the visit, German lawmakers from Merkel's coalition urged the government to push for more democracy in Russia as they expressed concern over a crackdown on civil society since Putin's return to the Kremlin in May.
Germany’s Foreign Minister Guido Westerwelle ahead of the visit stressed the need for a "critical dialogue" with Russia, warning that "partnership does not mean doing away with criticism". A week before the talks, German lawmakers passed a resolution co-authored by Andreas Schockenhoff, the government's coordinator for German-Russian relations urging the government to push for more democracy and warning of a "confrontational course towards government critics" in Russia.
Before Merkel’s visit, Putin's spokesman Dmitry Peskov denounced a rise in "anti-Russian rhetoric" in Germany. But he said he did not expect strong business ties between the two countries to be affected and that annual mutual trade of $87bn was a "safety cushion" that would keep ties on track. Germany is the EU’s largest economy and Russia is the world’s largest energy exporter. “We are well aware of the intensification of anti-Russian rhetoric in Germany in recent months,” Peskov told reporters on 15 November in Moscow. “If such questions are raised, then I have no doubt that as always Putin will fully clarify ambiguities and will ask questions himself.”
Germany and Russia have close energy ties and are working together in building the Nord Stream gas pipeline.
On 14 November, Russian gas monopoly Gazprom agreed an asset swap that will allow the Russian company to take full control of gas and trading storage businesses it jointly owns with Germany’s BASF. In the asset swap deal in return BASF will get more oil and gas production from Russia’s western Siberia.
BASF’s Wintershall unit will hand over a variety of assets to Gazprom, including its stakes in three European gas trading businesses. One of these, WINGAS, supplies gas to almost 20% of the German market.
“By increasing our share in the gas trading and storage business, we are continuing our successful activities to secure the supply of gas for Europe,” Gazprom CEO Alexei Miller said.
BASF said the divested activities accounted for €8.6bn in sales and €250mn in operating income last year. The chemicals group wants to expand oil and gas production in Russia.
The two Russian blocks in which BASF has agreed to acquire a share are set to start production in 2016 and are thought to hold 274bn cubic metres of natural gas and 74m metric tonnes of condensate. Along with WINGAS, Gazprom is set to fully control two other gas trading companies: WIEE and WIEH. NEW EUROPE ON LINE
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