QUESTION: Mr President!

First of all, I would like to thank you on behalf of all my colleagues for your hospitality today. Second, we consider that it is a great honour for us to be able to conduct this interview. Your cooperation with Time magazine means a lot to us. Its result will be a serious material, and quite broad in nature and scope.

I want to start with the first question. You were born in 1946 – I was born in 1948. We belong to the same generation. We grew up in countries that lived with the unavoidable presence of the enemy. But historically, and in most major conflicts – World War One, World War Two – Russia and the United States have been allies. And now, in large part thanks to your role, Russia is cooperating in the struggle against Islamic terrorism.

In view of our history, how would you predict the development of relations between Russia and the United States as they resolve global problems in the future? How would our generation assess their future prospects for cooperation?

VLADIMIR PUTIN: If you will allow me, I will correct you a little bit on certain dates. I could not have been born in 1946 because at that time my father was suffering from the wartime wounds and my mother survived the Leningrad blockade. After they had lost two children and their health it was unlikely that they could have thought of having another child right away. And I think it is for that reason that I was born a little later, in 1952. But this does not change the essence of the problems and the issues you raised – this is absolutely correct. How we conducted our relations previously, how we should conduct them in the future. And I understood what you are asking. I will allow myself to answer this question in a slightly philosophical way.

It is true that during humanity's two major tragic conflicts, the first and second World Wars, Russia and the United States were allies. So there is something that objectively leads us to come together in difficult times. I think we do so probably because of geopolitical alignment and geopolitical interests. But, obviously, there is also some kind of moral component in our cooperation during the most difficult times.

Of course the Cold War period was a tragedy in our relations. And I would very much like to see us overcome this inheritance from our previous relations, both today and in the future. I think that you will not be offended, you wanted me to be honest and I will allow myself to speak frankly. It seems to me that over the past decade, and perhaps even during the past 50 years, the idea of American exceptionalism has captured the public consciousness of the American population. Perhaps there are specific reasons for this, there is a historical phenomenon whereby in 250 and some odd years a small colony became a prosperous world power, one of today's leaders. This bears witness to a great deal, namely the talent of the American people and the optimal arrangement of the political and economic spheres. But, as a rule, leaders do not benefit from special rights. In general, they receive responsibilities. And if leaders start to believe that they have special rights then they often lose their leadership position.

And when we had two major world communities, the so-called Western bloc led by the United States and the Eastern bloc led by the Soviet Union, then we had the possibility of maintaining rigid discipline within this bloc mentality, this form of interaction. But today, when the overwhelming majority of the international community does not feel the same external threat that used to exist, and I would ask you not be offended by what I am saying, and one country starts to dictate an agenda in international affairs, this will not meet with understanding but rather resistance.

Today's world requires that we use other methods and instruments to communicate with one and other, and other ways to fight against today's threats. In order to be successful today we need to be able to negotiate and find compromises. And the ability to compromise is not just a diplomatic formality you reach with a partner, rather it is respect for their legitimate interests. In that case, when and where we are able to work in such a regime, where and when we are able to reach an agreement in light of each other's interests, each other's real interests, we will arrive at the right results.

QUESTION: What would be an example of this?

VLADIMIR PUTIN: The North Korean nuclear issue. There we have had patience, adopted a serious attitude, started thinking about each other's interests and all the interests linked to this issue, and the problems we are trying to resolve in North Korea itself. And through this approach, we might not have fully resolved this problem but we have at least made significant progress. And wherever we cannot be guided by these basic considerations, wherever certain steps are simply a tribute to a given country's economic or political egoism, then we are not able to reach the agreements that would allow us to truly solve today's problems. You mentioned one of them. But it is not only terrorism. Incidentally, I would not add the adjective 'Islamic' to a definition of terrorism. In our opinion and according to my own personal conviction, terrorism does not have a national or religious component. Terrorism is international. And there are extremists in all fields, in all countries, and, if you want to talk about the religious component, in all denominations. From time to time something simmers and then occasionally erupts. But we are not fighting with any kind of religious manifestation, but rather with the ideology of intolerance, in whatever form that may take.

So that's an area in which we really are beginning to take into account each other's interests and achieve long-term solutions. And, unfortunately, wherever we are unable to cope with our political or economic selfishness, we will not find such solutions.

But I think that the understanding that we need to behave in precisely this way – taking into account the interests of the international community – is prevailing. And as an example I would point to the meeting on the Middle East that was held in Annapolis. I am deeply convinced that President Bush has taken on an enormous responsibility, and a personal assignment, and I would like to congratulate him. I think that he has done a good thing. This represents a serious step towards resolving one of the most difficult, pressing and long-standing issues in the international arena, namely the Middle Eastern peace settlement. For our part, we will do and have done everything to support him and we will do everything possible to continue working together in this same regime.

QUESTION: Thank you. Another question. You strongly supported the United States after September 11. You were one of the first to call President Bush. How successful would you say the American war on terror has been? You said that terrorism is a universal phenomenon. You said that the response to 11 September should be primarily like a police action rather than against an individual country. Was it a mistake to invade Iraq and, if so, how serious a mistake was it?

VLADIMIR PUTIN: Our position on Iraq is well known. I believed from the outset that it was a mistaken decision and said so publicly. Not only is there no reason to change these views today but, on the contrary, all the events over the past years show that this attitude was correct.

If we look at a map of the world then Iraq is much less noticeable than, say, Russia or the United States. And it seems easy to 'crush' such a small country. But the ramifications, the ‘splashes’, are such that even today we don't know what to do. This is a small but very proud people. And problems have arisen, problems that were not visible before. People no longer perceive the occupation as part of the fight against Saddam Hussein's tyrannical regime, but rather as a personal insult. And terrorists capitalize on this. And while there were previously no terrorists in Iraq, they have now appeared.

Nevertheless, I believe that we should now talk less about what was done well and what was done incorrectly. I don't think that this will help resolve the situation today. Today we must think about what to do next, in the near future. And in general I agree with President Bush when he says that we need to do everything possible so that the Iraqi authorities are able to resolve their security problems independently. We need to help them create their own army, security services, police and to transfer this type of issue to the Iraqi people.

But where my opinion and George's diverge is on the issue of timing. He does not think it possible to impose a timeframe for the withdrawal of foreign forces from Iraqi territory. In my opinion, it would be better to do so and would encourage the Iraqi leadership to be more active. Because if they know that American bayonets will always be there to protect them, it is possible that some would find this situation very comfortable. And, on the other hand, if they know that there is a deadline after which the American and other troops will go, then already today they will have to do something to prepare for that date. I believe that this would be the best option. But ultimately this is a decision that we must take together within the framework of the United Nations.

QUESTION: You have obviously followed the publishing of the CIA report according to which Iran has no active nuclear weapons programme. A few months earlier you had already said the same thing. How would you evaluate the reasons that the American government has made this public only now? Does this reduce the likelihood of military actions against Iran?

VLADIMIR PUTIN: We need to ask the Director of the CIA and senior officials in the American administration why they chose to do this now, and why they did it at all, just as you need to ask why they destroyed the records of the interrogation sessions of suspected terrorists. These are not questions to me, but rather to them.

As for whether it reduces the threat of military action? If this CIA report has been published simply to divert the Iranians' attention from the real preparations for military action, something that is theoretically possible, then I believe that this would be very dangerous because any military action against Iran would represent yet another very big mistake. And if we assume that the report was actually published to provide an objective picture of events, then this simply confirms that the Russian side, in formulating its foreign policy position on a given issue, is guided by objective data. And I cannot help but be happy about this. This also bears witness to the fact that there are people in the American administration who believe that we need to speak the truth. And this too pleases me. This shows that we, basing ourselves on objective data, can construct an honest dialogue.

QUESTION: Thank you, Mr President.

Many of our questions will be based on how we perceive the American people's interest in Russia. And it was recently announced that the presidential candidate will be Mr Medvedev. The American media explained this choice of candidate in light of the fact that you will likely become Prime Minister. This is one of the ways to be a national leader. Americans have some trouble understanding this. You recently referred to Franklin D. Roosevelt as a model in this regard. As you know, he was president for a third and fourth term. But after his tenure the presidency was limited to two terms. Many Americans believe that 'he is trying very hard to get around this, to assume a leadership position for the future by enhancing the powers of the Prime Minister and weakening the position and functions of the President'.

VLADIMIR PUTIN: What you just said at the end is the most important point. One could hold such a view if I changed the Russian constitution to my own, to my personal benefit and, let's say, removed the restrictions on numbers of terms served, or changed the distribution of constitutional powers between the Prime Minister and the President and took on the Prime Minister's seat. But I believe that this would be both unacceptable and harmful for Russia. Russia is a country, much like the United States, that needs a balanced and yet strong presidential power. And I am categorically opposed to infringing on the constitutional rights of the Russian president. I think that this would be harmful.

I have not yet decided whether I will apply for the position of Prime Minister or not. If so, I intend to exert under the Constitution and the law only those powers which are vested in the Prime Minister of the Russian Federation, and deal with current economic and social problems, namely roads, housing and education. Incidentally, these issues are the most pressing ones for the ordinary citizen. But the key political, administrative and personnel prerogatives, both defence and international affairs will, of course, remain with the President and should remain within this level of authority.

Now, as to the thesis about the national leader. I don’t think that this is an administrative or even a political category. A leader is not determined by the number of telephones at a given working desk. Rather, it is a moral category and it is founded on the people's trust.

As to the Roosevelt model. We believe that we should carefully analyze what happens in other countries, everything that happened in Russia's history, and in other countries' history. Roosevelt is a very sympathetic figure, an outstanding statesman not only for America but internationally as well. He was our ally during World War Two. Let us recall the years in which he became president, the most difficult years of the depression, the Great Depression in the United States. And he gave the American people confidence and optimism in the country's future and won the war against fascism as our ally. Of course it was with us, together with the Russian people, but he was the leader of the United States at the time. And it is likely that at that time such forms of political governance, namely reducing the restrictions on the possible number of terms the president could stay in power, were in demand. Later the American people made a different decision. And this is America's sovereign right. How we arrange our authority structure is Russia’s sovereign right. My personal opinion is that the number of terms should be limited.

QUESTION: As you know, the American presidential campaign is beginning. Any candidate, including even the current president, can be but envious of the popularity ratings that you have in Russia. That is why our readers, the American people, cannot understand why the Russian pre-election campaign was not more open. And why was Mr Kasparov arrested, even for a short time? And why would you, Mr President, such a popular man, not allow the press and the opposition to proceed freely? In the American context, doing so would have made you even more popular.

VLADIMIR PUTIN: Why do you think Mr Kasparov was speaking English rather than Russian when he was detented? Did this not occur to you? I think that first and foremost his deeds were not aimed at his own people but rather at a Western audience. A person who works for an international audience can never be a leader in his own country. He should think of the interests of his own people and speak in their native language.

And now about 'enviousness'. Envy is a bad feeling and encourages misconduct. One simply requires a good analysis of what is happening and the corresponding reaction. Along with this, the reaction to events should be designed to strengthen relations between peoples and states. We expect that this will take place in the future.

I do not want to offend anyone, but let us recall that the elections for the first term of the current President of the United States were associated with certain difficulties. After all, the fate of the presidency was solved in a court of justice, rather than by direct plebiscite. In Russia, the head of state is elected directly by secret ballot, and in the U.S. by an electoral college. As far as I remember, in the first case the electoral college voted for a president who had less of the popular vote than the other candidate. Is this not a systematic problem in American electoral legislation? And I would like to draw your attention to the fact that, I think, at the end of the 18th century there was another president elected in a similar way. We do not force you to change your laws, we believe that this is the sovereign right of the American people and the legislators. Why do you believe that you have the right to interfere in our affairs? And, frankly speaking, this is the main problem in our relations.

Indeed, in recent years it is as if people are saying to us: we are waiting for you, we want to welcome you into our family, into our civilized western family. But, first of all, why have you decided that your civilization is the best? There are many civilizations that are more ancient than the American one. And, second, we are quietly made to understand, people whisper in our ear, that 'we are ready to accept you but you should understand that we have a patriarchal family. We are more senior than you and you must listen to us'. Indeed, this is the continuation of the first question that you asked.

In today's world such relationships no longer have a place. The 'bloc' mentality should be phased out, and instead we should adopt a completely different system of international relations. A system that does not just take into account each others' interests, but also develops common rules, known as international law. And we should strictly abide to these rules. Ultimately this could provide stability in the world and protect the interests of small countries but also large ones, and even super powers like the United States.

And now, with regards to detention and so on. You know that everyone received the right to express their opinion, just as they will have the right to do so during the presidential election campaign. And in accordance with the law all participants in the parliamentary and presidential elections have access to the media, but not only that. If you look at some television channels, the so-called opposition figures were simply permanent features there. Yes, they appeared less on other channels but they definitely appeared within the legislative framework. And on some channels they appeared constantly.

They had important, very important financial support. They had every opportunity to publicly express their views, to clarify their positions in the streets and town squares, but where permitted by law and the local authorities in accordance with the law. However, if they see their task as more than simply expressing their views, then they have another task: provoking the law enforcement agencies, ensuring that they are detained, and then appealing to their supporters, in this case not within the country but abroad, to show that there are problems in Russia. And in this sense they have of course achieved their goals and will achieve them in the future because we are going to continue to require that everyone comply with the laws of the Russian Federation.

QUESTION: Are you still concerned about the opposition's capacity to destabilize Russia? You are very popular, but all the same you see this as a threat?

VLADIMIR PUTIN: No, if you look at the election results, they got 0.9 per cent, not even one per cent. How can this be worrying? In political terms there is no worry. That is not what is at stake! The point is that I see this as an instrument that foreign countries are using to interfere in Russia's domestic affairs. This is the heart of the matter.

As to detention, I would like to repeat to you once again that everyone, all the people who have different opinions from the authorities on a given issue, will be given and have been given the opportunity to express their views, and express them publicly. This is not the problem. The problem is if they want to do more than simply express their opinion, if they want to be detained, and if they want to provoke the authorities into taking tough action. We have already said to them: please go ahead, you can hold demonstrations, you can come with posters and with slogans. But they don’t want that. They want to go where they are not allowed, where they disturb the life of a city in which millions of people live, where authorities cannot ensure security. And when they execute these violations consciously, then the authorities react accordingly. And I want to say this to you and I want to say it with full responsibility: the authorities are going to continue to respond in this way. But if people act within the law and abide by the law, then they will receive the right to protect their legal and constitutional rights and interests. And we will punish those who infringe on this and the officials who prevent our citizens from enjoying their constitutional rights.

QUESTION: Mr President, you mentioned that external forces are interfering in Russia's internal affairs, and now you have the opportunity to intervene in America's internal affairs. Is there a candidate that you would support in the upcoming American presidential election? Do you see anyone among Republicans or Democrats who you think would make a good American president? Maybe you could even influence the American elections?

VLADIMIR PUTIN: I see that you did not understand anything I said. The principle that guides our work is our sense that it is harmful to interfere in other countries' internal affairs. We would not allow ourselves to intervene, and we are not preparing to intervene in other countries' affairs.

You know that, strangely enough one of my European colleagues said: 'I thought that Moscow supports a given candidate'. I was extremely surprised to hear that, since we do not work this way. We think that this is simply indecent and harmful, and harmful to ourselves because if we were to allow ourselves to do so, then we would compromise the person that we wanted to see at the head of a given state. Because the population of a given country can start to doubt which interests a given person in the public authorities is representing. We have no particular preferences in this matter. And, moreover, I am deeply convinced that independently of whoever is elected to this high office as President of the United States of America, the objective course of international affairs and the mutual interests of Russia and the United States will inevitably push the Russian and American leadership to construct a good partnership.

Look at what is happening in the world. We are seeing rapid growth and new emerging economic and, therefore, also political centres of influence. The world has changed a great deal and in the next 30-50 years will change even more.

QUESTION: Are you referring to India and China in particular?

VLADIMIR PUTIN: India, China, Brazil, South Africa and several other countries. Japan has also become stronger. I am not saying that this is good or bad, I say that it will be different. And I am therefore absolutely confident that Russia and the United States, not only today but also in the future will need each other even more and need to have good relations. And the future Russian and American leaders who understand this will be in demand and be successful.

QUESTION: If possible, I would like to return to the issue of national leader. As you said, this is not a political or an administrative category, rather it is a moral one.

But how should we understand this situation? Suppose there is a national leader in a given country whose authority is a moral one, Mahatma Gandhi, for example, who was not part of administrative or political structures but, rather, acted as a touchstone for the system of government and the state. But what happens if a person who has such a status in their country remains part of the governmental institutions and takes a position in accordance with the Constitution, even though it is not technically the highest position? Does this not create an imbalance? How effectively can you avoid creating an imbalance?

VLADIMIR PUTIN: This means that such a person exposes themselves to danger because they carry a great responsibility in decision making, and certain decisions may not be met 'with hurrahs', but rather with misunderstanding and even resistance. But in that case you need to prove your point, be honest with people, conduct a direct dialogue, and prove that perhaps these are not very pleasant but nevertheless necessary measures. And that in the final analysis these measures will have a positive result in the medium- or long-term perspective. But it is very important that people believe that this will be the case. And this means that such a person should never lie. Everyone has the right to make mistakes but you have to be honest with regards to your actions and try achieve a positive result.

And if such a dialogue exists, then it is the best guarantee of success.

QUESTION: You are in an interesting position: you grew up in the Soviet Union, and you were committed to the Soviet system, but you are a pioneer in a new system in a very old country, in Russia today.

What are the key differences between the two countries in which you have lived? What do you think should be preserved from the Soviet Union, what should be discarded, what does the new Russia need, and what does it take to be able to learn from the past?

VLADIMIR PUTIN: First and foremost, you are absolutely right. Russia is an ancient country with historical, profound traditions and a very powerful moral foundation. And this foundation is a love for the Motherland and patriotism. Patriotism in the best sense of that word. Incidentally, I think that to a certain extent, to a significant extent, this is also attributable to the American people.

What do we need to unequivocally leave behind? We need to get rid of the Soviet legacy according to which we are trying to lead the world socialist or communist revolution and become leaders, international leaders of this movement, a time in which we tried to impose a certain way of life on other countries. I think that this is an error that was committed by other countries in addition to the Soviet Union, but it is obvious and applicable to the Soviet Union. And we undoubtedly need to move away from this.

What do I think is, in general, possible to preserve and what should we develop? I would answer the major traits. We need to develop respect for our history, despite all of its flaws, and love for the Fatherland. We need to pay the utmost attention to our common moral values and consolidate Russian society on this basis. I think that this is an absolute priority.

QUESTION: To develop this theme further, you already said that the world will change in the next 30-50 years. And what will be Russia's place in the next 30-50 years?

VLADIMIR PUTIN: You see, you can never, we can never escape the Cold War mentality and superpower way of thinking.

I just mentioned that the Soviet Union wanted to be the leader of a global communist revolution. That was a big mistake. We would not like to repeat these mistakes in the future. We do not want to be a superpower that dominates others and imposes its decisions. But we want to have enough forces to defend ourselves, to defend our interests, and to build good relations with our neighbours and key partners. So that in turn, these partners are interested in developing and strengthening the Russian Federation. This is no easy task and can be done only by consolidating Russian society and by increasing its economic opportunities. And this will be our task in the medium- and long-term future. And if we accomplish it, then Russia's worthy place in the international arena will be secured.

QUESTION: Do you think the United States needs a strong Russia or not?

VLADIMIR PUTIN: I think that the United States is already aware, and will further understand in the future, that only a strong Russia is in the fundamental interests of the United States.

QUESTION: I would like to touch on the topic of NATO. Can we consider NATO as a living organism, or it is still the legacy of what you were just talking about, the world divided into blocs? What is its purpose today? If, for example, Russia was offered the chance to join NATO, would you join?

VLADIMIR PUTIN: I would not say that NATO is the stinking corpse of the cold war. But it is certainly something that is a holdover from the past. There is no point in pretending otherwise, let’s look at its history: first NATO was created, and then, in response, the Warsaw Pact was created. It was two military and political blocs opposing each other. If we say that we need not only a new architecture, but also to use new principles to promote international understanding, if we recognise the need to seek common ground and compromise on the basis of respect for each other's interests within the framework of a multipolar world, an organisation such as NATO is not a panacea for today’s problems. How, for example, can NATO effectively fight terrorism? Did NATO prevent the September 11 terrorist attack on the United States that killed thousands of Americans? Where was NATO to respond to this danger, to eliminate it, to protect America from it? It didn’t, it couldn’t, because these threats can be addressed only by increasing trust in each other by interacting on a regular basis with countries who can deal with such threats. Of course one of those countries is Russia.

Russia is not going to join a military-political bloc in order to limit its sovereignty, because participation in a bloc is of course a restriction of sovereignty. But we want to have good relations, not only with the United States but with all countries, including the member countries of NATO and with the organisation itself.

Certainly in a general sense NATO can be an instrument of international policy and can help in solving certain problems. But I think that the organisation itself has to change a lot. Already it is impossible for someone to line up, discipline, or drive other countries into a corner, because things are different today. If previously the United States bore the greatest burden and subjected itself to danger defending the Western world from the threat of the Soviet Union, today there is no such threat, because there is no Soviet Union. Therefore within the organisation they have to construct relationships according to other principles.

And this involves the fight against crime, against drugs, which really do damage to our countries, against terrorism and organised crime, and ultimately against poverty, which is one of the causes of terrorism. For this we need a wider sphere of cooperation than is available within a single military-political bloc.

QUESTION: Mr President, you mentioned organised crime. One impression that the Americans have about Russia is that corruption there is widespread, and that this is an obstacle for you. How are you dealing with this issue? How can you resolve it? How can you control corruption?

VLADIMIR PUTIN: Unsuccessfully. We are addressing this issue unsuccessfully. Our attempts to control corruption have been unsuccessful. Here I must say something that I think you already know: that in a transitional economy and during the restructuring of an entire political system, dealing with such issues is more difficult, because unfortunately there is no reaction from civil society to this. Unfortunately we must speak frankly and openly admit that we have not worked out a system that encourages social control of the activities of public institutions. We have tremendous opportunities in terms of the acquisition of material resources and money available to specific individuals and specific companies. But incomes in the public sector for government officials still do not correspond to the nature of the decisions that they have to make. That is, the payment for their labor, on the one hand, and the importance of the decisions they take, on the other, are incompatible. Still, in the public mind it is not yet fully understood that the activities of officials on whose decisions billions depend should be rewarded appropriately so that there is no temptation. All of this, including increasing opportunities for the media to expose corruption, all of this together is certainly one of the tasks that we have to deal with together. I am absolutely convinced that by strengthening the political system, civil society, by improving market mechanisms, including making governmental and administrative decisions about economic management, that, eventually, we can address these problems more efficiently than we are doing today.

QUESTION: You mentioned civil society. I would like to take up this question from a slightly different angle, from the point of view of religion. You yourself have talked repeatedly about faith . What role in your view does faith play in your leadership? And speaking of religion, what role should faith play more generally in one’s life and in society?

VLADIMIR PUTIN: In addressing management issues, in the formulation of management challenges, first and foremost we must of course be guided by common sense. But that common sense should be based on moral principles. There is no morality or virtue in the world that exists in isolation from religious values nor could there be in my view. That's all I want to say. I could say more, but I would like to stop there, because I do not want to impose my views on people who have a different opinion about this. There are such people in Russia and they are entitled to their opinion.

QUESTION: Could you say a little more about this: do you believe in a supreme being?

VLADIMIR PUTIN: You know, there are things that I consider someone in my position should not submit to public display, because it ends up looking like an exercise in self-advertisement or a political striptease. I think both are inappropriate.

QUESTION: I want to change topics. In some venues people write that Mr Putin is a man of the market, that he understands the market and he believes in market mechanisms. It would be interesting to know how a career KGB officer who grew up in the Soviet Union, became a man of the market? Is this a question of continuous learning, of education? Where did you get your market education, what is your market philosophy, and what nourished your intellectual development in this regard?

VLADIMIR PUTIN: First, I did graduate from Leningrad State University. I was trained in law, not economics, but there are many areas in which law and economics are very closely related. This is not only in civil law, but also in other areas of legal expertise. I majored in the field of private international law, that is, in an area very closely linked to the economy and relevant to the global economy. That’s the first thing.

Second, there is no need to be a renowned expert to understand and see the obvious, that a market economy has great advantages over a planned economy. If you recall the discussions that went on in Europe and in the United States, if you recall the discussions that took place during the Great Depression, you will probably remember that in the United States there were specialists who believed that government intervention in the economy to overcome the well-known difficulties that develop in the economic life was not only possible but desirable. And President Roosevelt, whom we mentioned, also believed this.

But at the various stages of development of the world economy certain tools, certain principles are more effective, and they correspond better to the level of development of productive forces in the world and the structure of the world economy. Of course today market-based instruments are in demand and more efficient. But if we look at what is happening in individual countries, including Russia and the United States, the regulatory functions of the state are also indispensable. This does not, of course, relate to my service with the State Security Committee of the Soviet Union, but is based on the education I received, on an analysis of what is happening.

And if we are talking about what was positive in the early years of my productive activities in the special services, then, yes, perhaps you are right: we were always encouraged to educate ourselves, to analyse what was actually happening, draw conclusions and react accordingly. And later on, as you may be aware, I had the pleasure of defending a PhD thesis in economics. Therefore my theoretical knowledge and practical experience in more recent years have helped me form certain principles, which I have followed in recent years and which have clearly brought about positive results.

Perhaps some things could have been done differently, less harshly. Perhaps we could have achieved better results. But what we have done in recent years in economics has been an unquestionable success. Annual growth for the last 7 or 8 years has averaged 7 per cent. And this year it will be even higher. We got rid of a multibillion dollar debt and accumulated vast resources. We have real growth and, allowing for inflation, the average household income has grown at an annual rate of 12 percent. That is the most important thing for me. We are dealing with specific things in the area of social policy, rebuilding entire sectors of the economy. Principles are all very well, but here as in foreign policy a great deal depends upon talent and skills.

QUESTION: Does the growth of the economy explain the success of Russian tennis players in international play?

VLADIMIR PUTIN: No, it does not explain the success of Russian tennis players, but the success of Russian athletes in general is of course related to the economy. Although you put your question in the form of a joke, I will answer it by saying that, if we are talking about sport at the highest level, then of course it is very important for us, first because it is something we can export and secondly because it raises the morale of the nation, it brings people together.

But even more important for us in this area is amateur sport and physical education. And here a great deal still needs to be done to rebuild the training of children and young people, and to raise the level of training in the schools.

By the way, it is useful to look at the American experience in this regard. I think that competition between schools and colleges in the United States is a very good example to follow, because it encourages team spirit, it brings teams together, especially for children and youth – we have a great deal to learn from this. In Russia this has to a large extent been lost in recent years because of the breakdown at the material and technical level. Our modest but significant economic progress has given us the opportunity today, not only to return to where we once were, but to rebuild at a totally new technological and technical level. Now we can create the conditions so that our people, the young and people of all ages, can enjoy these services, and so that the services are accessible to all.

QUESTION: Do you perhaps feel that you are lucky that you have a lot of oil?

VLADIMIR PUTIN: Lucky fools, but we have been working from morning till night. Yes, there have been positive external economic factors, but let us recall that during the Soviet era oil and gas prices also went through the roof, and nothing happened. They stupidly bought consumer goods abroad and imported them.

We have different economic policies. We are in the process of reconfiguring the tax system and are creating reserves for the country. We are creating conditions for the development of whole sectors of the economy. Our challenge today is not just to drill holes in the ground, extract oil and gas and sell them to the highest bidder.

Our task is to diversify the economy and make it more innovative. For this purpose we are creating new institutions for development and special economic zones, which is why we are paying particular attention to the development of education and science. We have done very little in this area in recent years because we simply were not able to. But what we have identified as short- and medium-term gains gives us every reason to believe that Russia will develop successfully and become more innovative.

QUESTION: I would like to continue along the same lines. We know that you have interesting, dynamic relations with the leaders of world governments. Do you have close personal relationships with the heads of major international companies? How much do you, as a business leader, involve yourself in specific things such as talking to captains of industry?

VLADIMIR PUTIN: I set certain rules for myself concerning interacting with business representatives, even when I was working in St Petersburg as First Deputy Mayor of the city. I think that these are people on whom a great deal of the country’s economy depends. They help determine how the budget will be designed, address social challenges by creating jobs, and create decent work for people. But for such figures, the ones we described as captains of industry, the principal task is to make a profit. They do all their work with this in mind. And this is not the main task of the state. The main task of the state is to ensure that the welfare of ordinary citizens increases. And so I have always thought that with the heads of large companies one needs to have good, solid, trusting relationships. That said, they must know that, despite having major capital assets and lots of money in the bank, they must comply with the law, like any other citizen of the Russian Federation. And so that they had no illusions about being allowed more than that, I thought it was appropriate to keep my distance from them. This is what I did in St Petersburg and what I’ve done for 8 years here, and I think that is the right way to interact with these people for whom of course I have great respect.

QUESTION: Since this subject has come up, perhaps I could ask another question in this vein. You had difficulties with the oligarchs and they had difficulties with you. Could you talk about the role of the state in regulating or restricting the activities of certain oligarchs? Some of those involved in the television business left Russia; another, an expert on oil production, is in custody. Why did the oligarchs, as they were called, come to the attention of the state?

VLADIMIR PUTIN: Why did they come to the attention of the state? If you don’t swindle people you will not come to the attention of the state.

That is the problem we had. It wasn’t that they had particular difficulties with me; they had difficulties with the Russian people and with the law. Because when people break the law they line their pockets, and tens of millions lose the rather modest savings that they’ve acquired over a lifetime. It is a matter of the distrust and alienation felt by the overwhelming majority of the population while a small group of individuals amassed billions of dollars in 6 or 7 years. That creates a lack of trust and that is the most important issue.

As I understood it, my task was first – I repeat once again – to remind everyone that they had to live within the law, that they had to obey the law regardless of the amount of wealth they had amassed.

Secondly, to humanise Russian business, to make it more socially responsible and to remove the wall of alienation separating the people and businesses in the Russian Federation. To understand business you need to understand its social responsibilities. Its main task is not to fill its bank accounts with money and then send it abroad, but to realize itself here, in its own Motherland. The value of a man and a businessman is not how much wealth he has acquired but what he has done for the people, by whose hands he managed to achieve such results.

These are the new moral principles that can emerge and break down the wall of alienation between the people and the business. Then people will have more confidence in those who direct the large companies and have great wealth.

And the final thing is this: we need to do everything we can to overcome poverty, because a person who does not have the most basic things or lives in difficult conditions does give a damn about all these maxims. You cannot explain anything to him. And he is right, this person, because it means that neither the state nor business has done anything to improve his life. And in his opinion they could do better since they have amassed such resources. And in this sense, the ordinary citizen is right. But this means that together we have a lot to do to resolve this problem, to create a feeling of trust between the people and big business.

QUESTION: I have been in Russia for a week and I regularly read about Russia on the Internet. It seems that some of the people very close to you have enriched themselves by corruption.

I would like to ask this question. Is there a threat of social upheaval if living standards do not continue to rise and the corruption situation deteriorates?

VLADIMIR PUTIN: If the standard of living continues to rise, then there is no danger of social upheaval. But the situation with regards to corruption does not suit us either. You said that some people have made money from corruption. This means that you know who and how. Write out your allegations and send them to the Ministry of Foreign Affairs of the Russian Federation or to the prosecutor. I beg you to do this. Because if you are so sure about what you are saying, that means that you can name names, that you know about corrupt schemes. And I can assure you and everyone listening to us, watching us, or reading about our meeting today, that the response will be quick, immediate, and of course within the framework of existing legislation in Russia. In the past and in recent years I have not just talked about it, but by my actions prompted law enforcement agencies and public organisations not to tolerate manifestations of this kind. For the state any situation in which those engaged in corruption feel privileged cannot be tolerated. And so if you have any concrete evidence of such practices, please write out your allegations. I will be very grateful to you.

QUESTION: It seems paradoxical. For many centuries in Russia there has been a strong centralized, shall we say autocratic power, under the Tsars and the Bolsheviks. It would seem that only such a strong autocratic power can hold together such a gigantic country. At the same time, this mode of governance impedes the development of the country. This power has twice brought the country to ruin.

Now in the XXI century when everything functions according to the market mechanisms you described, according to contemporary processes that require human autonomy and efficiency, how can this paradox be resolved? As a man who has been President for 8 years, how do you resolve it?

VLADIMIR PUTIN: Organising government is one of the most complex issues. Government should be sufficiently strong to be able to guarantee sovereignty, security and defence capability. It should be sufficiently strong to protect the country’s territorial integrity, but it should also be sensitive to regional and municipal issues and sensitive to the needs of individuals. Such government cannot be achieved if citizens do not feel any connection with the state and do not think they have any influence on the authorities, and so government must therefore be democratic. The balance between strong and sensitive government is of crucial importance. This is very fine and delicate work and we need to be very much aware of what stage of development society has reached, what is acceptable and what is not possible.

QUESTION: Let me ask a follow-on question then: you said that America, at its stage of development, has kept the archaic institution of electoral colleges instead of giving people the right to vote directly. In Russia, direct elections of regional governors have now been abolished. The result is that they are elected by much the same thing as the electoral colleges. Do you think that at this stage in Russia’s development voters cannot be trusted to elect governors directly, or was this decision motivated by other reasons?

VLADIMIR PUTIN: The voters are not the issue. The problem is that, unfortunately, civil society has not yet reached a sufficient level of development here. This is something we need to be aware of. In this situation, the moment someone takes up office as governor, whether through using the various instruments available to those in power, or through the help of wealthy backing, he ends up being cut off from the very voters who supposedly brought him to power. At the same time, the other state institutions have only minimal influence on him. In the current situation, I think that for Russia, with its vast territory and its mixture of ethnic state formations that make up its territory, the system I proposed whereby people elect the members of their regional parliaments through direct secret ballot, and these parliamentary deputies then vote on the candidate for governor proposed by the President, is the optimum scheme.

I think that this enables us to ensure that the regional governors are directly bound to national interests while at the same time being sensitive to local issues. The method we use for forming our regional government is a lot more democratic than in some countries whose democratic status is unquestioned. In India, for example, governors are directly appointed. In France, the prefects, for example, are directly appointed and that’s all there is to it. Even taking the United Kingdom, Her Majesty’s Government includes a minister for Northern Irish affairs and a minister for Scottish affairs, and the principle powers are in their hands. As for the municipal level, as they say here, over there the chimneys are lower, the smoke thinner and they have different rights. Essentially, what we are doing is no different.

QUESTION: What do you do in your spare time?

VLADIMIR PUTIN: I do not have any spare time.

I play sport, walk, occasionally go to the theatre. My wife drags me out. I like to listen to music, light, popular classical music, composers such as Brahms, Rakhmaninov, Tchaikovsky, Mozart, Schubert and Liszt. Theirs are such beautiful pieces. I spend two hours a day on sport, usually in the morning, but sometimes I have to change my routine. The rest of the time I work, and that is all.

QUESTION: You worked in the KGB. We already talked about that. What influence has your work in that organisation had on you? It’s sometimes said after all that, once an intelligence officer, always an intelligence officer.

VLADIMIR PUTIN: That’s all just fables. We’re all real people. Of course some aspects of past experience leave their mark, things we can draw on in life today, and other aspects fade away. But whether it was in university or in the KGB, where I was sent to work after graduating from university, I think that the main thing was that in both places we were taught to think independently, to collect objective information, analyse it, and use it as the basis for making independent decisions.

That is the first positive aspect that I was able to apply to my future experience, including to my work today. The second aspect, which is above all true of my time in the intelligence services, of course, is the ability to work with people and, above all, to respect the people with whom you work. I’ll share with you some real inside information on the way the intelligence services work. There are several basic principles for working with information sources, with the people who help the intelligence services. They are given different names in different countries, but in general they are referred to as agents.

The foundations for this cooperation can vary: the person might be dependent on the intelligence service, be working for material gain or share the same political views, but the most solid foundation of all, without which nothing can be achieved, is that of trust and respect for your partner. At the very least you always have to look upon the person with whom you are working as being your equal. You have to understand that in some way he is better than you. In the context of intelligence work, when I was working with people who were cooperating with Soviet intelligence, I always thought that the people I was dealing with were better than me if only because they were risking more than me. That was already enough to make me feel great respect for these people.

I think that these people felt this respect and I had very good relations with them. This respect for one’s partners is also very important in politics, I think.

QUESTION: What have you learned through your dealings with foreign journalists?

VLADIMIR PUTIN: The issue is not one of journalists themselves or of political or military details. I am talking here about human relations. What can I say about foreign journalists? What I always appreciated in them is that they are professionals. Many of them have specialised in this or that area and become experts on different issues, and this is something for which I feel respect. I always find it interesting to speak with people who have in-depth knowledge of different issues.

But to be frank with you – you can decide for yourself whether to print this or not – there are people who are really not objective, despite all the freedom the Western press, including the American press, enjoys. These are people who are simply doing what they have to do to earn the money their owners pay, and who want to avoid disputes with their bosses.

Truly independent people, people who are not afraid to spoil their relations with their bosses or lose their jobs, people who really write what they think, are quite few and far between. They are few and far between not just in the media world but in life in general. These are the true objective spirits, people who have a bit of a dissident streak in them whatever the environment they’re in. But it is precisely these people, selfless and honest people, who earn respect wherever they work, whether as journalists, politicians, or in whatever other field.

QUESTION: We are journalists, Mr President, and we are objective about the work we do.

I was recently at a dinner hosted by a certain organisation. It was a meeting about protecting journalists. The concern was expressed there that many journalists have died in Russia in unclear circumstances and that journalists in America and elsewhere in the world cannot help but asking if there is not some kind of pattern to these events? Are you and the Russian Government doing something to prevent this? We are also concerned about what our fellow journalists will say about our work, and this is why we are raising this question.

VLADIMIR PUTIN: To give you an absolutely frank answer without any politics involved at all, I am also very worried by this situation. I will not speak about what happens in other countries where many journalists have also lost their lives, including Iraq, where the number is probably even higher. This is not the point and I do not want to point the finger of blame somewhere else. Let us talk about the situation in Russia.

There are several aspects to this problem. First of all, the media community is part of Russian society, which is made up of people who want to live better, earn more and enjoy all the benefits of civilisation. At a time when capital is in its initial stages of being built up, many people, journalists included, are tempted to earn some extra money on the side. This has led people to enter into relations with business, sometimes with criminal business, to be drawn into this environment, begin defending the interests of one group against those of another and end up becoming part of the struggle for economic gains and wealth. Of course, this struggle always leads to victims. That is one category.

The second category of journalists who have become victims are those who are sincerely fighting corruption and fighting any merging of the state with business or with the criminal world. These are especially severe losses, of courses. This is the area to which the state should pay the greatest attention. I do not exclude that such losses have also taken place here, but I see this as personal losses because such people are without a doubt working in the interests of Russia, working to make Russia stronger from within, and we will do everything we can to protect such people and guarantee their security and the possibility of carrying out their professional activity.

QUESTION: If you had to draw the most suitable parallel with the situation in the West, what situation would you make a comparison with, in particular as regards what happened here to [Anna] Politkovskaya?

VLADIMIR PUTIN: It’s hard to say because each situation is unique. As you know, an investigation has been carried out and has brought results, but there are problems with the evidence. It is also no secret for you if you are involved in Russian affairs that Ms Politkovskaya did not play any significant role in Russia’s political life. Insinuations that she was a danger for the authorities and so on are therefore nonsense. She was no danger at all. I think that her murder was simply a provocation against the authorities. No one ever talked about her. Only a limited number of people – you could count them on your fingers - knew about her activities, and now all the country and the whole world is talking about her. I think this is just a deliberate provocation – a sacrificial victim was chosen and a woman was killed, that is all. But we will nevertheless do all we can to ensure that this investigation is carried out in full.

QUESTION: One of the questions I wanted to ask you has become evident over the course of today’s discussion. What do you think about American misconceptions of Russia, the Russian people, you, the Government? What is the reason for this situation? If you were able to address the American people directly and say, “I think you should know the following facts about us. I think there are things you do not understand or maybe have not been told”, what main misconceptions would you address?

VLADIMIR PUTIN: I do not believe this is a case of misconceptions. I think that this is a deliberate attempt to create a certain image of Russia that can be used to influence our domestic and foreign policy.

Russia has demonstrated on numerous occasions in word and in deed over the last 15 years that we want to be not just a partner but also a friend of America. But we sometimes have the impression that America does not need friends. We sometimes have the impression that the United States needs vassals it can command.

We cannot build our relations with other countries on such principles. This situation constantly leads to friction, and this is the reason why people are always looking for problems within the country.

This is the reason why we and all the others are told, “it’s alright to pinch and criticise them a bit because they’re still not quite civilised, they’re still a bit wild, only came down from the trees not long ago, so we have to groom them a bit because they can’t do it for themselves. We have to shave them, clean the grime from them. That’s our civilising mission”.

But I think that this is really just an instrument for influencing Russia. It’s not the right instrument. The right approach, as I said, is to look for compromise and take each other’s interests into account.

QUESTION: I have a personal question. When you were growing up, when you were a mid-level intelligence officer, did it ever enter your head that you would one day be running the country, especially at a time of change, a troubled time?

VLADIMIR PUTIN: I never thought about it and of course it never entered my head.

QUESTION: Does it still surprise you that it happened?

VLADIMIR PUTIN: Yes, I think it does. I arrived in Moscow from St Petersburg in the summer of 1996. Three years later, in August 1999, I became prime minister, and another six months later I was elected President. When I arrived in Moscow in 1996, I had no real connections or friends to rely on. I came to Moscow because the man I worked with in St Petersburg, Mr Sobchak, lost the election and I simply did not have a chance of finding employment there, no one would take me on.

QUESTION: How did it all happen then?

VLADIMIR PUTIN: I’m amazed myself. It seems to me that it all happened because people close to First President Yeltsin realised that I would be absolutely sincere and would give everything to fulfilling my duties, would be honest with regard to the First President and would do all I could to protect the country’s interests. I think this was the main motivation behind the decision of President Yeltsin and the people close to him when they made this proposal to me.

QUESTION: So he saw something new in you, he saw something that suggested that you in particular would be able to handle this work?

VLADIMIR PUTIN: Yes, I think so. We talked about this several times. The first time he made the proposal I answered with a refusal. For a start, I understood just what situation the country was in, and then, it was also a completely unexpected proposal for me. I said that I didn’t know…

QUESTION: You realised that this would be a difficult task and this made you hesitate?

VLADIMIR PUTIN: Yes, of course. That was clear immediately after the 1998 default.

I said that I wasn’t sure, that this was a very difficult fate and that I wasn’t sure whether I was ready for it or not. But President Yeltsin was insistent. He said, “We will come back to this conversation. I ask you not to say ‘no’”. So I said, “Alright then, we will talk about it again later”.

QUESTION: Can we talk a little about your relations today with Mr Yeltsin and Mr Gorbachev?

VLADIMIR PUTIN: Mr Yeltsin passed away, as you know.

RESPONSE: Yes, sorry.

VLADIMIR PUTIN: But we can talk about my relations with regard to the time when he headed Russia.

QUESTION: Yes, please. You were not the sort of President he was, a revolutionary president?

VLADIMIR PUTIN: Yes. Also I was never a top Soviet official, a party official or member of the Politburo, and I never worked in the regional party committees. Although I worked in the intelligence service, I was essentially just a rank and file Soviet citizen in as much as a member of the intelligence services can be one, while Mr Yeltsin was part of the upper echelon of the Soviet nomenklatura.

But I think nevertheless that he and Gorbachev did what I could probably not have done. They took the step towards destroying a system that the Russian people could endure no longer. I am not sure I would have been able to take such a step. Gorbachev took the first step and Yeltsin completed what I think was a historic and very important transition for Russia and its people. Both of them, Yeltsin above all, of course, gave Russia freedom, and this is indisputably the historic achievement of the Yeltsin era.

QUESTION: You have spoken very confidently about Russia’s role in international affairs. People say that it was harder to carry out this policy at the start of your presidency, but now that you have become a very strong president, I want to ask you: when did you become a national leader? What determines this position? When were you able to say to yourself, “Yes, now I have become a true leader”?

VLADIMIR PUTIN: First of all, this is something I never thought about, just as I never thought that I would one day be President. And now, to be honest, I try not to think about it because I think that when people start to think they are somehow exceptional, some kind of exceptional leader, they start to lose touch with reality.

I never called myself a national leader. It is others who have called me this. I did not think up this term and have never sought it. When I became President the country found itself unwillingly plunged into the chaos of civil war in the Caucasus and faced enormous economic difficulties, the collapse of the social sphere and a huge number of people living below the poverty line.

I can say to you with all certainty that I did not just take this job, step into this office, as it were, but I decided for myself that I was ready to do everything I could, to make any sacrifice, in order to restore the country. I made this the main purpose of my life and I decided that my own life in the broad sense, my personal life and interests, therefore ended.

Destiny has given me the chance to play a positive role in the history of my people, and I see myself as a part of this people and feel very strongly my connection to them. I have always felt this and I feel it now, and from the moment I made my decision I have subjugated my entire life to this goal.

I think that these goals have been reached to a large extent. We now have other problems, just as big, that we must address, but these are already problems of a different kind, and we have every opportunity for making progress.

So when you ask me when I first had this feeling of being a leader, I can say that I haven’t had this feeling and I don’t have it now. I feel like a work horse that is hauling along a cart filled with a heavy load, and I can tell you that the satisfaction I feel from my work depends on how rapidly and effectively I manage to make progress along this road.

QUESTION: You said that you have not called yourself a national leader and that it is others who do so. But the issue remains of how does a national leader fit into the political system?

There was a precedent in the sixteenth century when the tsar, Ivan Vasilyevich, for a number of reasons, left Moscow for Alexandrovskaya Sloboda, leaving Tsarevich Simeon Bekbulatovich in his place and formally declaring him tsar. All the nobles and officials had to pretend that the tsar was Simeon Bekbulatovich and that Ivan Vasilyevich was just a sort of temporary figure. Overall, this created a certain dissonance in society at that time. Is a repeat of this kind of collision possible?

VLADIMIR PUTIN: No, because we do not have a monarchy now but live within the framework of the Constitution, and everyone, including the state’s top officials, needs to remember this. Everyone has to submit to the Constitution, and that is that.

QUESTION: What about your trip to Belarus? In the long term, could it not lead to changes in state organisation?

VLADIMIR PUTIN: Anything is possible in the long term. With regard to Belarus, we are talking about the possibility of creating a Union State, but fundamental issues such as these cannot be bound up with the interests of specific individuals.

QUESTION: I want to come back to what you said about Mr Yeltsin and Mr Gorbachev. Theoreticians and political analysts sometimes say that it was a mistake on the part of Gorbachev and perhaps of Mr Yeltsin too that glasnost came first and only then perestroika. They say that if Gorbachev had done things the other way round, first perestroika and then glasnost, Russia would have been very different and would not have gone through all the trials it went through during the Yeltsin years. Do you think that this would have had a positive impact on Russia’s development?

VLADIMIR PUTIN: I do not think that democratisation, if glasnost is understood in this way, should have been postponed until later as a task of secondary importance. But it is also clear that market transformations should not have been delayed, and we have seen the results.

QUESTION: Do you not see the 1990s as something of a paradox in this respect? On the one hand, you say it is a period that gave Russia freedom, but on the other hand, you often say that it was a time of total ruin and a great tragedy, referring to the collapse of the Soviet Union. How do you explain this paradox?

VLADIMIR PUTIN: I do not see any paradox. The command economy system and the Communist Party’s total domination of political life had brought the country to a point where most people no longer placed any value on the state. They did not need that state. So it was no surprise that they saw the state as they did and felt no regret at seeing it go, imagining that things could surely not be any worse without it. But then it became apparent that things could indeed be worse. The tragedy is that people’s hopes were disappointed because freedom to do as one pleased was called democracy, and the theft of millions to enrich a few, the plunder of immense resources that belonged to the whole people, was called the market and market relations.

What did the collapse of the Soviet Union mean? Twenty-five-million Soviet citizens who were ethnic Russians found themselves outside Russia’s border and no one gave them any thought. This is equivalent to the population of a large European country. They found themselves suddenly in the position of being foreigners without ever having been asked about what they themselves wanted.

And how did the Soviet collapse actually take place? In any democratic country, in Belgium at the moment, for example, complex processes can take place. But in countries where these processes are taking place, before making a decision, the public is asked, “do you want to live separately from this country with which you currently live together, or do you want to stay together?” I am sure that if a referendum had been held, the majority of people in many of the former Soviet republics would not have said that, “yes, we want to separate from the Soviet Union”. But they were never asked. Is this a democratic means of resolving problems of this kind? We do not make an issue of this today, do not talk about it, but it is nonetheless the reality of the situation.

So, 25 million people found themselves abroad without means of existence, in a climate of rising nationalism and in a situation when they could not return to Russia, their historic homeland, and could not even see their relatives because they did not have the money to buy a plane or train ticket. They do not have apartments in Russia. They have nowhere to live and no jobs. Is this not a tragedy? This is what I meant when I spoke of the tragedy of this period.

I had in mind not the political aspect of the Soviet Union’s collapse but the humanitarian aspect. And is this not a tragedy? Of course it is a tragedy and a great tragedy too.

QUESTION: I would like to ask you to go further and take a broader look at the picture, talk about these countries and review the situation.

VLADIMIR PUTIN: Which countries?

QUESTION: My question is two-fold. First, it is clear that the lessons that you have learned in Chechnya could be used by other countries, including the United States, in improving relations and stability. And second, how does Russia plan to work together with the CIS countries, the former Soviet republics?

VLADIMIR PUTIN: As you know, I said that I think the collapse of the Soviet Union was a tragedy, but given that this event is the reality we have to live with now, our relations with the former Soviet republics should be based on the principle of absolute equality. I think that if we keep to this approach we will be able to hope for progress in economic integration and thus ensure our competitive advantages in the global economy. This is what is uppermost in my mind.

We have a common energy system and a common transport system. We do not have to think up rules for the use of national languages, as in the European Union, because the Russian language has naturally come to play the part of common language of communication between us all.

There are many other elements uniting us. Some sectors of our respective economies simply cannot exist without each other. This is true for Russia, Ukraine, Belarus, Kazakhstan and many of the other former Soviet republics. I think that these are the principles upon which our relations should be built.

As for the processes taking place in these countries, I would prefer not to comment on them because this is not my affair.

RESPONSE: You have had market disputes, disputes over prices for gas, if we come back to this…

VLADIMIR PUTIN: What disputes? There are world gas prices. We sell gas at world prices to all our customers. Why should we sell gas at lower prices to someone? Do the Americans sell at cheaper prices? Can you walk into a shop in the USA and say, “I’m from Canada, and we Canadians are good friends of the USA, so can you sell me a Chrysler at half price?” What kind of answer would such a person get? They’d say, “Out of here, you idiot!”

QUESTION: California can sell at a discount to Nevada. The states can do this, give each other various preferential terms. If the former Soviet republics become something like the European Union, why should they not also help each other?

VLADIMIR PUTIN: I think this goes against the principles of the market economy and that it is harmful to the countries that do it.

Even within Russia we have adopted a program introducing world prices for domestic consumers. Any other approach distorts the country’s economy and makes certain economic sectors dependent on others. This leads to cross-subsidising of the economy and is quite simply destructive. We are therefore making the transition to market principles within the country and also in our relations with our closest neighbours. If we help someone, we assume that we will be receiving adequate compensation in return, even if for the time being one can not see it.

Furthermore, we realised the difficulties our partners faced and for a whole 15 years supplied energy resources to our neighbours at prices much lower than world prices, subsidising their economies to the tune of $3 billion-$5 billion a year, and that was for Ukraine alone. This situation could not last forever. The situation had already become unfair.

You mentioned the Europeans. The Europeans criticise us, saying that we need to use world prices within the country and say that otherwise our companies will benefit from advantages over European companies. In other words, we are supposed to sell at world prices on the domestic market, but we are supposed to sell to our neighbours at a discount.

We do not make a political issue of energy problems. Let’s be frank about what is going on here. Let’s not beat about the bush and avoid calling a spade a spade. I propose that we speak frankly. For some reason, there are people in the United States who think that part of the Ukrainian elite is pro-American and part is pro-Russian. And they have decided to support the part they think is pro-American, the so-called ‘orange revolutionaries’.

That’s your choice, if you want to support them, support them, although we think this is not the right approach because in reality there are only different people there with different political views, and in general, if a politician wants to be popular at home, he has to protect the national interests. All of them have to be Ukrainian nationalists in the positive sense of the term. And that is what they all are: they are not pro-Russian or pro-American or pro-European; they are all pro-Ukrainian. But you have decided to divide them for some reason into pro-European, pro-Western, and pro-Russian factions. Fine, be that as it may, you have divided them this way and decide who to support. We think this is a mistake. It would be better to let them get on with resolving their domestic problems themselves. Furthermore, you supported them in action that was clearly unconstitutional in nature. After all, everything that took place there was in violation of the Constitution. And what has it led to? The result is that different political groups and groups within the population in Ukraine itself have lost trust in each other. Through this action you have begun to destroy Ukraine, undermining its territorial integrity and sovereignty. That is what the United States has accomplished in Ukraine, and the same thing is happening in Georgia.

And what were we saying? We said to leave them alone, to let them sort things out for themselves, support them from outside but not give preference to one group or the other. This conflict will continue until the country is completely destabilised, and judging from the situation, this state of affairs will persist for quite some time yet.

But when everyone saw that destabilisation was taking place, they tried to force Russia into subsidising the Ukrainian economy so as not to let the country fall into complete collapse and destabilisation. But if you choose to support this or that group, you should be the ones who pay for your choice. No one wants to pay. I spoke with one European economy minister and said, “well, go on, pay then”, and he said, “am I an idiot or something?”, and I said, “and do I look to you like an idiot?”

So we need to look at the situation, we need to look at the reality and not think in terms of general categories. I think the situation that is unfolding is a dangerous one. Every effort needs to be made there to consolidate society and consolidate the country. It would be best, overall, if the so-called pro-Russian and pro-Western forces got together and reflected on the future of their country and built a power structure that would forge the bonds of national unity and not divide the country into western and eastern or southern groups.

What is happening now is moving in this direction, in a destructive direction, and this is a great pity because Ukraine is a country with whom we have very close ties. Every second person in Russia probably has ties of some sort with relatives or friends in Ukraine. Of Ukraine’s 45 million people, 17 million are ethnic Russians, and this is only according to official statistics. Almost 100 percent of people there consider Russian their native language, well, 80 percent perhaps. This is a country we are very close to and we sincerely want to see peace and tranquillity finally come to Ukraine and see them put in place the conditions for consistent development.

QUESTION: In the long term, do you think that Ukraine could ever become a part of Russia once again?

VLADIMIR PUTIN: No, of course not. We do not seek this. We do not want to bring anybody into Russia because this would just be an additional economic burden for the country. But we do want to be able to make use of our natural competitive advantages in the world economy. I already named them. We could look at economic integration, but it makes no sense at all to impose some kind of new state formation when the people in neither one nor the other country want this.

This is not even so important in the modern world. Just look at what is happening in Europe. Unification is taking place and national borders no longer play the role they used to. They are losing the significance they used to have.

QUESTION: President Bush said that he looked into your eyes and saw into your soul. Did you see into President Bush’s soul when you looked into his eyes, and what did you see there?

VLADIMIR PUTIN: I don’t think I have the right to give personality assessments and evaluations. When he said that he looked into my eyes, he was saying what he felt. I will therefore take your question literally and speak about my own feelings.

I do indeed have good relations with him and this is something I value. I consider him a very reliable partner and a decent person.

When I have had the pleasure of speaking with some American intellectuals – I will not name names – they begin to argue with me on this point. I would like to say that my term in office as President is coming to an end soon and I have no reason to make compliments just for the sake of it, all the more as I will soon be leaving this post. I do not need to make compliments for personal or for business reasons. What I say I say in all sincerity. I do not agree with those in Russia or in America who deny Bush’s decency, honesty or even competence.

We all make mistakes. I think that Iraq was a mistake, for example. But Bush is someone with a lot of experience, a lot of experience in life and in state affairs, and there is no doubt that everything he does is aimed at protecting the interests of the United States.

RESPONSE: Could you repeat that second part, “he is someone with a lot of experience”. Could you repeat that sentence, please?

VLADIMIR PUTIN: I think he is someone with a lot of experience in life and in state affairs. He was governor, after all, and I have an idea of what it takes to run a region. I was deputy mayor of St Petersburg, and he was the top official in the state. Only at first glance does this seem like nothing much, just a matter of looking after roofs, roads, looking after the linen, but this is not the case at all. This work involves serious matters and the decisions taken affect the lives of thousands, millions, of people. He has a lot of international experience, though, as I said, there are some areas where I think he has made mistakes, some things I would not have done. I already mentioned Iraq. But I have absolutely no doubt that he is acting in America’s interests, that he devotes himself fully to this work, and that he is honest with his partners.

QUESTION: How do you think Iraq will end for the United States?

VLADIMIR PUTIN: I think that if we all work together and come up with common solutions, work together to return to Iraq its sovereignty, and the sooner the better, we will be able to avoid serious consequences.

QUESTION: Another question in this respect. You were one of the first to come to the aid of the United States after September 11. When the United States entered Afghanistan, Russia already had a lot of experience of presence in that country. Do you think that Russia and the United States missed the opportunity to cooperate more closely on combating terrorism precisely because of differences of opinion over the invasion of Iraq?

VLADIMIR PUTIN: I think we certainly could have worked together in more coordinated and thus more effective fashion.

But I do think that we have achieved cooperation between our intelligence services. We cannot always make it public and show it, but I can assure you that it is effective, including for ensuring security in the direct sense of the term, the security of Russian citizens and U.S. citizens. The cooperation between our intelligence services has produced some good results and they are now able to prevent serious attacks against our citizens, something they have been doing very successfully at moments.

RESPONSE: That is reassuring.

VLADIMIR PUTIN: This is not just banal talk. I am saying this on the basis of concrete work to prevent concrete attacks directed against Americans and against Russian citizens, attacks that have been prevented as a result of our work together.

QUESTION: I am being perfectly sincere when I say that it is reassuring to hear this from you.

Are there organisational structures through which the intelligence services carry out their anti-terrorist work?

VLADIMIR PUTIN: Cooperation takes place through what are called partnership channels, and this has been very successful of late.

QUESTION: What kind of cooperation are we talking about exactly?

VLADIMIR PUTIN: Cooperation to prevent terrorist attacks against Russian and American citizens, as I said, including possible large-scale actions. We do not publicise the information exchanges and prevention measures taking place on both sides, but they are there.

I spoke with President Bush on the telephone about this just recently, gave him some specific examples and had the opportunity to inform him about some of the joint work we have been carrying out.

QUESTION: This concerned threats to the United States that it was possible to prevent through the help of the Russian intelligence services?

VLADIMIR PUTIN: It concerned threats to the United States and Russia and joint work to prevent threats to Americans and to Russians. I am stating the situation as it is and I cannot say more at the moment.

QUESTION: Mr President, regarding Russia’s relations with other countries, with China, for example, what is the current state of Russian-Chinese relations? Is there anything in what China is doing that you see as positive and that Russia could also take on board? Would you like to move in some other direction?

VLADIMIR PUTIN: Russia and China are natural partners. We are neighbours and share thousands of kilometres of common border. We spent 40 years negotiating a border settlement with China. Forty years – that is a long time – but two or three years ago we resolved and signed everything. Russia and China have reached an unprecedented level of trust and cooperation in their relations today. We are very pleased with this and we see that our Chinese partners are doing all they can to maintain this level. We are receiving signals of this in practically every area. We value this highly and try to respond likewise. I hope that this will remain the case in the future.

QUESTION: You spoke about President Bush, but you also met with President Clinton. Could you compare their styles, their intellectual capabilities, the way they responded to questions?

VLADIMIR PUTIN: Yes of course I can make such a comparison, but do you really think I am going to do so? I have too much respect for both of these politicians to allow myself to make such comparisons and comments.

But I do remember how I began. President Yeltsin sent me to attend the APEC summit in New Zealand. I was prime minister at the time and my political prospects were still quite unclear, I did not really know myself what lay ahead. Clinton at that time was already well-known, respected at home and abroad. He was a recognised world leader. I remember that at dinner when Clinton got up from the table, he came round this big table at which all these APEC leaders were seated, and whispered in my ear, “Volodya, I propose that you and I leave together”. This came as a complete surprise to me. We both got up and our colleagues all stepped back to form a sort of corridor, and we walked along this ‘corridor’ together to the applause of those present.

I will never forget this and I am very grateful to him for this. In general, despite the differences of opinion on many issues, such marks of human attention and friendly attitude towards each other, this culture of relations among state leaders, is a special kind of chemistry and it is very important.

QUESTION: Are there any world leaders with whom you have also felt this kind of special chemistry, or any other friends? Mr Berlusconi and Mr Sarkozy have had many warm words to say about you, for example. Who could you name? What about Mrs Merkel, what language do the two of you use together?

VLADIMIR PUTIN: I have very good relations with all of the people you have named, and in some cases they have developed into real friendship. Generally, Mrs Merkel and I speak to each other in German.

QUESTION: I would like to come back to the question of God. You said in one of your answers that it is wrong to steal and that this is a principle of life in Russia. Have you read the Bible?

VLADIMIR PUTIN: Yes. I have a copy of the Bible in my plane, and I fly a lot. I have the Bible in my plane and I also have an icon there, a special icon, embroidered, but everything is there. If I am flying a long distance – and we have a big country, and I also fly abroad regularly – I have the chance to read the Bible.

QUESTION: How would you characterise your religious beliefs? It seems to me from your answer that you do not want to talk publicly about this in your position. But is there something you could say about this?

VLADIMIR PUTIN: Yes. What I can say is that it is my firm conviction that only religion can provide the moral values without which humanity as a whole and we as individuals cannot live.

As for specific institutions or churches, this is a separate issue. Someone said once that if God exists, he does not know that people have different views on the church.

QUESTION: But a situation is emerging now in Russia in which the Russian Orthodox Church is becoming dominant once again. It is the only church to have signed official cooperation agreements with the Defence Ministry and the law enforcement agencies, for example.

VLADIMIR PUTIN: The issue is not the agreement but the law.

RESPONSE: I realise this, but the law prohibits this – Russia is a secular state.

VLADIMIR PUTIN: This is not the case. The law states that Russia has four traditional religions. Our American partners have criticised us for this, but this is what our lawmakers have decided. These traditional religions are: Orthodoxy, Judaism, Islam and Buddhism.

RESPONSE: Excuse me, this is not quite what I had in mind. I did not finish my sentence. I think the law prohibits things such as a joint church service involving the General Staff and Orthodox hierarchs to celebrate the 60th anniversary of the creation of the Soviet nuclear bomb. If all four confessions took part in the event it would be more comprehensible in terms of the Constitution.

VLADIMIR PUTIN: I think that if people at General Staff who are followers of Judaism, Islam or Buddhism went to their respective religious authorities and marked this important event, there would be nothing bad in this, and I would welcome it.

Orthodoxy just happens to be the biggest of our religions. Almost 80 percent of Russia’s population consider themselves as having a connection with Orthodoxy.

QUESTION: Mr President, you know that in America, being ‘green’, ecologically-minded, is the new religion, and the chief hierarch is former Vice-President Al Gore. I have two questions in this respect. How do you view the ‘green movement’ as it is developing in Russia, and what is your policy in this area? And the second part of my question: in America and the West there is a need to use alternative energy sources so as to reduce dependence on fuels such as oil.

VLADIMIR PUTIN: Regarding the ecology movement, I very much support it and share their ideas very much.

Protecting nature, protecting the environment in which we live is one of the priorities for all of humankind. People who devote their time and their lives to this work unquestionably deserve our support. It is also clear that we cannot stop human development. There will always be a conflict between development and environmental protection. It is important that humanity realise the dramatic nature of the events taking place and channel development in such a way as to cause minimal damage to nature, or try to find ways of excluding all such damage.

Modern technology can help us to achieve this. It is easier to resolve these problems today than it was even 15 years ago, because in a situation of confrontation between two rival blocs such as we had back then, confrontation that threatened total mutual destruction, people were not much concerned with what happened to the environment during this competition, which was a struggle of life or death.

But today we have left this situation behind and there is no need to destroy the environment in the way we did previously. Today we therefore have a unique political opportunity to look after what God has given all of humankind.

Our eco-system is very vulnerable. It is amazing that the Earth still survives today. Our planet evolved through a combination of billions of circumstances and continues to exist thanks to the fact these billions of circumstances somehow interact and work together. Our planet, which is in constant movement through what is essentially the hostile environment of outer space, is faced with the constant threat of destruction. It could be hit by large cosmic bodies. We have a very thin ozone layer and our atmosphere in general is really quite thin. There is a very fine line beyond which damage becomes irreversible, and we might not even notice that we have crossed this line.

In this respect we must always remember this and always strive to minimise the possible negative consequences for the environment. But what I do not like is that people sometimes use environmental issues as an instrument in competition, particularly in economic competition, in order to stifle competition. This undermines trust in the environmental protection organisations and their work.

This is the negative side of the question. But overall, we must strive to come up with rules of behaviour that would protect the environment for humankind in the long term.

QUESTION: The second part of the question: will we find a substitute for oil? And if we do, what would be the impact for Russia and the global economy?

VLADIMIR PUTIN: First of all, as I said, one of our economic priorities is to diversify our economy. We base ourselves on the premise that we should depend not on oil but on brainpower. We need to change the structure of our economy. This is not an easy task but I have no doubt that it is within our power. We are already moving in this direction and we have already achieved results. The share of machine-building and other high-technology sectors in our GDP is growing all the time compared to the share of the natural resources extraction sectors. If you look at the changing figures over the last few years you will see that this is an indisputable fact.

Second, talking about the energy sector, Russia is taking steps, perhaps not yet sufficient steps as yet, but we are working on developing new forms of thermonuclear, nuclear and hydrogen energy. Alternative energy sources such as those obtained from cereals, for example, also offer good prospects for Russia. There are not so many countries in the world with a large amount of territory that can be used to grow these cereals: really, there are only the United States, Canada, Australia, Russia and perhaps Brazil. That is all. We are not pessimistic at all with regards to this issue. We will keep working.

QUESTION: Thank you very much. You have been very generous with your time. Could I ask a couple of final questions, to help Americans understand you better?

VLADIMIR PUTIN: Go ahead, but only two, because it is already 10p.m.

QUESTION: Thank you. You said that the large number of telephones on the boss’s desk is an old stereotype now. How much into technology are you personally? Do you use e-mail or Blackberry, and do you have your own blog, for example?

VLADIMIR PUTIN: To my great shame, I don’t use any of these things. I don’t even use the telephone. My staff does it all for me. They do it all very well and I am very envious of them.

QUESTION: But to give Americans a better idea of you as a person, what do you like and value most of all, and what do you feel some kind of passion for?

VLADIMIR PUTIN: There is only one measure of power and that is people’s trust. There is no other measure. All the rest is just an illusion of power, and a very dangerous illusion it is. Trust is the most important component of power and it is something I value immensely.

I am very grateful to people for thinking that I really have spent these last eight years working honestly, toiling like a galley slave every day. And I see that there are also people who do not see things in this way, do not perceive it as I do, but I do not blame them for this, I blame myself for not having managed to reach out properly to these people. This means I did not work hard enough and could have done more. But overall, what I am most grateful for is people’s trust.

Thank you.