A traditional ceremony will be held at the Russian Chapel below Vrsič on Sunday. This year it will be attended by the highest representative of Russia in the history of the event, Russian Prime Minister Dmitry Medvedev, who on that occasion, will meet with Slovenian political leadership. Before visiting Slovenia, RTV Slovenia talked with Russian Prime Minister in Moscow.
You visited Slovenia in 2009, when you attended a football qualification match between Slovenia and Russia, so we could say you know Slovenia a little. How would you describe Russian-Slovenian relations?
You began with a sad event, which happened in your home country, as far as I know. It’s true that I visited Slovenia in 2009, where our national team met your team and, I’m sorry to say, not only lost but also failed to qualify for the next stage of the championships. But I’ve been to Slovenia on nicer occasions, for holidays – this was long ago – and also as part of a delegation.
As for our relations, I believe they’re very good and meet the interests of our nations. These relations have a long history, more than a century-long history which helps us deal with various problems. Therefore, although Russia-EU relations are not at their best now, Russia’s relations with Slovenia are quite good, which is why I decided to make an official visit to your country.
I hope we’ll be able to discuss all aspects of Russian-Slovenian relations, from the economy to everything else, including our shared history of the 19th and 20th centuries, during my talks with the president, the prime minister and the parliament speaker of Slovenia.
You mentioned Russian-Slovenian relations, including economic ties. Bilateral trade exceeded $2 billion in 2013. This is a positive figure and trend that continued last year. But this year our trade has slumped. How will our bilateral economic relations develop in the future? In which industries is the development of investment cooperation possible?
There are two reasons behind the decline of Russian-Slovenian and Russian-EU trade. One of the reasons is the current economic situation, because trade comprises export and import commodities. Raw materials, or more precisely oil and gas, are one of the most important Russian exports. The prices of energy resources have dropped, which is not good for the supplier, but is good for the consumer, This needs to be considered. But this is the nature of trade: what goes down yesterday can go up tomorrow. Regrettably, there is also a second reason: the sanctions [against Russia] of course, and our restrictions in response. I don’t see this decline as normal, because it’s rooted in politics.
I won’t talk about the history of this, which everybody seems to remember. I’ll only say that this is bad for Russia and Slovenia. In the first five months of this year, our trade plunged by nearly 40 percent. As you said, in its peak year, 2013, it reached $2 billion. It is a good figure and good money. We travelled a long road towards that goal, but unfortunately, our trade has declined due to political decisions. But we didn’t start this, and I’m sure that it won’t be us that’ll end this. Anyway, the political restrictions will pass, while trade and good relations between countries and nations, as well as mutual sympathy between individuals, will live on and take the upper hand.
As for investment, overall we’re optimistic about the future despite the hard times we’re currently going through. Total cumulative investment exceeds 500 million Euros, with Russian investment in Slovenia a little lower, but close to Slovenian investment in Russia.
In what areas could cooperation be further promoted? It’s obvious that Slovenia has a number of areas of interest to Russia which we regard as priorities in terms of investment cooperation. These include the manufacturing and energy sectors, including electric power, the hotel business and tourism. Slovenian investment is also focused on the consumer market. A number of Slovenian companies have opened offices in Russia and set up plants that make popular products, including home appliances and pharmaceuticals. I think we need to build on existing achievements, overcome the temporary issues and expand cooperation.
You said the sanctions were the main reason behind the decline in Russia-Slovenia trade. The European Union recently extended the sanctions for six months, and Russia followed suit with a one-year extension. Why did Russia renew its sanctions for a year? In your opinion, how long will this standoff between the West and Russia last?
I don’t know how long this standoff will last, because, as I’ve already mentioned, we’re not the ones who started it. We’ve said many times that sanctions are futile, because this path leads nowhere and doesn’t change anything except a deterioration in relations and the need to conduct lengthy laborious talks afterwards.
Let me give you another example which has nothing to do with neither Russia, nor Europe. This is just a telling example. Or maybe let’s even make it two examples. In the course of the 20th century, sanctions were introduced against the USSR ten times. There may be different perspectives on the Soviet Union, since it was quite controversial. Anyway, there wasn’t a single time when the Soviet Union gave in on anything. Talks between Iran and the six world powers plus the EU have been completed recently, and I take this opportunity to congratulate everyone on their success. What does this mean? Why did we have to lose so much time? This goes to say that sanctions lead nowhere.
When I was preparing for this interview, I was surprised to learn that a Slovenian leader had said that the sanctions were effective and were producing the expected results, since trade with Russia dropped by 40 percent. There might be different perspectives on Russia and our relations, but when trade is down by 40 percent, this also means bad news for Slovenian producers and businesses. What is there to celebrate? I think that this logic is absurd. It is true that we all have commitments of various kinds. We understand that Slovenia is part of the EU, a NATO member, and that you have certain commitments. But I don’t think it’s appropriate to celebrate when our economies are decelerating and trade is on the decline. When will it end? Let’s wait and see. I’m an optimist by nature, and I believe that this will come to an end sooner or later.
You mentioned our retaliatory measures. Why were they introduced for a year? This has nothing to do with inflicting pain on Europeans. The reasons behind this are strictly pragmatic. As a matter of fact, our retaliatory measures are related to food products. As you probably know, we are currently proactive in promoting import substitution in the food industry and developing domestic food production. Russia is a huge country; it has a huge agricultural sector, so we can surely provide for our needs in terms of food supply. Agriculture operates in one-year cycles, which enables producers to make plans for a longer term. This is the only reason behind this decision… It is not our intention to show how hard boiled we are by renewing retaliatory measures for a longer term. This is not the case. However, we are committed to protecting national interests and domestic producers.
For now, relations between the West and Russia are difficult. Is it possible, under the circumstances, to return to the idea of a single economic space from Lisbon to Vladivostok, which Russia has promoted?
Of course it’s possible. Even though the current situation isn’t simple, I’ll just talk about Russian-European cooperation: the EU is, in spite of everything, our biggest partner. The European Union, not the East Asian countries, and not the Pacific countries! To be sure, trade has declined, but it’s still worth several hundred billion euros – I don’t know this year’s balance yet – and it remains at a high level. This means we need each other. Europe needs the Russian market, Russia needs cooperation with Europe, and this is why the common economic space idea is here to stay. Economically, it’s a completely reasonable approach. More than that, a new idea has been advanced – President Putin mentioned it recently, by the way – the idea to establish relations between the major integration unions in the Euro-Asian space. I’m referring to the European Union, the Eurasian Economic Union, the Shanghai Cooperation Organisation, and the Silk Road economic belt (a Chinese project). To me, bringing these projects together benefits everyone.
It’s interesting that you just mentioned China’s Silk Road and the Eurasian Economic Union. This Chinese Silk Road concept is rather new, but generally the future of the Eurasian Economic Union is what has been discussed a lot. Do you think these two concepts and two projects are compatible, or will they compete?
You just said the right thing: they are compatible and they will compete. This is very good. They’re compatible because the world is big and Russia is a huge country. And naturally we want to continue cooperating with the EU, as I said.
We’re also promoting cooperation with the Asia Pacific Region. The amount of cooperation there is considerable too, and we really have new ideas. But I think we have an opportunity to come to terms both on bilateral and trilateral projects. We’ve worked with European companies that supply products and have production organisations in Russia. We also supply products and have established some production in the EU. But we have the Russian Far East. It’s huge. There is also Siberia that has an immense amount of wealth. We can supply a lot of energy from there and have signed an agreement to this effect with the People’s Republic of China. In general, the road from China to Europe cannot bypass Russia. I think that these advantages should be used by both the European Union and the PRC, and incidentally, by our other partners there (like India, Japan, Korea, and many other countries), and finally, by Russia itself, which has vast transit potential, among other things.
As we talk, we are shifting slowly towards the East. In principle, the Western sanctions are one of the reasons why Russia has turned towards the East, particularly China. But it is also trying to strengthen its ties with the other BRICS countries. As of now, Russia’s is a very slowly growing BRICS economy, while China is the strongest BRICS economy. As a well-known saying goes, “he who pays the piper, calls the tune.” Aren’t you worried that Russia will become dependent on China?
There is no such threat, of course. We maintain equitable and friendly relations with China. Moreover, let me be frank, our relations are now at the highest point in the entire centuries-old history of Russian-Chinese cooperation. This level of relations was achieved neither before the [October 1917] revolution, nor in the Soviet period. This is the current level of our relations. We need each other. We need a strong and reliable partner like China that has a huge market and immense financial capabilities. China needs the Russian Federation’s market. In addition, we have quite similar positions on many international issues.
We’ve created major cooperation formats, such as the Shanghai Cooperation Organisation, and BRICS that you mentioned. People often ask me: have you left Europe for Asia and the Pacific region? No, we’ve always been there. The thing is that now is the time to take this cooperation to the next level. There are two reasons for this. First, it has never been fully developed, including our cooperation with China, even though our current trade with it is just shy of $100 billion, which is nevertheless much lower than with the European Union. Second, let’s face it, access to some European markets if off-limits to us. Naturally, we opted for an alternative. This is understandable.
With regard to the growth of our economy, indeed, we are not at our best now. The Chinese economy is growing much faster, although there still is the issue of the base effect. This is my first point.
My second point is that our economy has, until recently, at least until the sanctions, been growing at about the same rate as the EU economy, that is, not too fast. This year, the situation is more complicated, and most likely there will be a certain slump. However, these factors can be dealt with. I think that the economy will return to the path of growth in late 2015 - early 2016. It won’t be anything spectacular, but it will still go up, which will allow us to address some economic issues.
What kind of a partner is China? Are they a demanding partner?
China is our neighbour. As I mentioned earlier, we have been cooperating with China and living side by side with them for the many centuries now. We work together on many projects. China goes its own way. At this particular point, we have similar positions on international issues. We are equal partners and we do not interfere in each other’s domestic affairs. China is a comfortable partner to work with. By the way, we had multiple government contacts this year. The President of the People's Republic of China joined us in Moscow for our celebration of Victory Day (by the way, I’d like to thank the Slovenian delegation for coming too, despite the political complexities that were involved in this process). This year, the Russian President will take part in the celebrations in China. I have a meeting with my Chinese colleague, Premier Li Keqiang, scheduled for late 2015. We have full and intensive cooperation with China.
Let's move on to Ukraine, which, with its 18 month-old crisis, is one of Europe’s most burning issues. What are your expectations? Do you see any real chances of resolving this situation any time soon?
Yes, I do. First, the Ukrainian crisis was engineered. It’s not that it originated in someone’s head, or is due to some force majeure circumstances. No, it was actually staged, and the former and current leaders of Ukraine are responsible for it. The former failed to restore law and order, while the latter allowed a civil war to break out. The Ukrainian people must hold them accountable for that.
Second, the Ukrainian crisis can be resolved only in Ukraine by the Ukrainians. Neither the Russian Federation, nor the European Union, nor the United States, but only by the Ukrainians must do it. They need to sit down and agree on things. The authorities should show flexibility within the framework of the Minsk Agreements and take the decisions that they must take, including the ones relating to the autonomous republics in southeastern Ukraine. Of course, the self-defence units and political forces in southeastern Ukraine should show a willingness to compromise and reach an agreement with the Ukrainian authorities. Only then will peace come to the Ukrainian land. Perhaps, this is the most important thing to do, because if it doesn’t happen, we will witness a very sad process. It is already sad, but it could take on very dramatic proportions.
History is a tough and a fairly quick thing. Let me talk about events that are closer to you. Let’s ask young Russians who remembers a country such as Yugoslavia. I think most young people will struggle to remember that Yugoslavia was ever on the map of Europe. At the same time, everyone knows, travels, loves, and has friends in the countries that used to be part of the former Yugoslavia. It was a difficult, painful and, unfortunately, not a peaceful process. I’m referring to Yugoslavia, because when we are told that we must respect international obligations, we fully agree with that. Clearly, it is imperative to adhere to international obligations and generally accepted international rules, but this approach should be applied to all countries and all situations. I bring up Yugoslavia only because I hope that someday we won’t have to remember that there used to be a state called Ukraine, as with Yugoslavia. The existence of Ukraine depends on the wisdom, patience, tact, and a willingness to achieve compromise and negotiation between all the decision-makers in Ukraine. I’m talking about the authorities in Kiev and the political forces in southeastern Ukraine.
Can Russia help with this? Or Washington?
Of course it can, and we are doing our best to help them get there. Anyone who wants them to agree can help. So does Russia, although we do not consider ourselves responsible for this conflict. Indeed, Ukraine is close to us, and the people who live there are very close to us. They are, in fact, our relatives. The European Union can help as well, by the way, and it is helping. I believe that several countries currently play an important role. The United States can also help promote this process, because the US is a major powerful state that plays a key role in NATO, has a controlling stake in the global economy and so on.
Again, let’s face it, Ukraine’s leaders are actively consulting with Washington. In this regard, we believe that our contact with the US is useful. But we shouldn’t impose anything on Ukraine. The problem of Ukraine is that, at some point, some states decided that they could run things there and show how events can unfold. We all know how it ended.
Let's go back to Russia-Slovenia relations.
Yes, it's a more pleasant issue to discuss.
As you know, Slovenia had planned to join the South Stream project. But Russia cancelled the project earlier this year and has taken up Turkish Stream. As far as I know, Moscow and Ankara have not yet signed an intergovernmental agreement to this effect. At the same time, Europe has been trying to ease its energy dependence on Russia. What can you say about Turkish Stream’s fate?
Let’s start with South Stream. It has fallen victim to Brussels bureaucracy, and that’s it. Yes, that’s how it happened, I’m sorry to say. We were ready to implement it, we made the necessary plans, invested substantial funds and were ready to start building the underwater section, but officials in Brussels said they couldn’t coordinate the matter, were proceeding too slowly – dragging it out, as we say. Bulgaria also failed to make a decision, and so the project was put to rest. This is the first thing.
Second, about Turkish Stream: yes, it is an alternative to South Stream, and we’re optimistic about this project. Some of the documents have been signed, but not an intergovernmental agreement. The main reason is that there is no government in Turkey now. Our partners and colleagues in Turkey need to form a new government, which is a far from simple undertaking, as practice shows. We continue to negotiate with them. I hope that when they resolve their political problems and complete the political process, we’ll coordinate all the outstanding issues with them. By the way, Slovenia could play a major role in this project, because we are willing to supply gas to Turkey, where a series of large gas storage facilities could be built on the border with Greece and from there gas could be distributed throughout Europe. Several countries have shown interest in this project, including Hungary and Serbia. So I would recommend your leaders take a close look at this project.
And lastly, if there is a gap, something will fill it. Turkish Stream is taking South Stream’s place. It’s not proceeding as fast as we’d like, but it’s not stalled either. And then we thought of building a second Nord Stream line, which delivers Russian gas to Germany across the Baltic Sea. You probably heard that we have signed a memorandum between our companies to increase the gas volume via Nord Stream. So Europe’s energy security will be guaranteed.
As for decreasing energy dependence on Russia, they can do it of course, but at what price? They should take into account the interests of European consumers. They can import liquefied gas, for example from the United States, but it would cost a lot. Or they can import gas through some other channels. This is an issue of money and commercial value. We believe that all of our projects have a future. I hope we’ll continue to supply gas to European consumers.
And lastly, this is not a one-way street. They often claim that poor old Europe depends on Russia too much. Let’s be clear: Russia also depends on Europe to the same extent. If we supply gas and invest billions of dollars in our deposits and pipelines, we are depending on Europe to buy our gas, just as Europe depends on gas from Russia. These are mutual investments.
This is a very interesting idea. But do you agree that Europe keeps looking for an alternative to Russian gas? For example, it is considering importing gas from Azerbaijan. This is especially important for south-eastern Europe. How important is the European gas market to Russia?
It is very important to us. As I said, the European market is of crucial importance to us. We’ve been selling gas to Europe for decades; we have never failed to meet our obligations, and we’d like to continue to supply gas to Europe in large volumes. But this doesn’t mean we won’t supply gas to other locations. This is not shifting our emphasis or changing the cooperation vector; this is adding one more vector of cooperation. Our gas distribution to China will not detract from our cooperation with Europe.
Mr Medvedev, as prime minister you and your team deal with the most important development issues. What is your vision of Russia five years from now?
I’d like Russia to be a more prosperous and economically successful country, so that our people can live better, afford more, have better vacations, but also work better. In a word, I’d like Russia to be a modern and developed country with a friendly attitude to all other countries, including Slovenia, which is our partner.
Vlasta Jeseničnik, RTV Slovenija