PRESIDENT VLADIMIR PUTIN: Our meeting today is taking place on March 8, International Women’s Day, and I would like to congratulate Ms Merkel on this occasion.

This holiday is widely celebrated in Russia and I would also like therefore to take this opportunity to congratulate all women in Russia and Germany and wish them happiness and prosperity.

GERMAN CHANCELLOR ANGELA MERKEL (As translated): Thank you very much for your congratulations on March 8, International Women’s Day. I know that this is the day when women see their wishes come true and this is a wonderful thing.

It is a real pleasure to have been able to come here today and be present for this ‘farewell’ visit, although in reality it is not a farewell. I am pleased to have this opportunity to exchange views, as we have done regularly over these last years. Our dialogue and exchanges of views underscore the intensiveness of the contacts between our two countries.

We have found much in common and have had very open discussions on critical issues. We have discussed international affairs and issues concerning civil society. We have never ignored these issues and have always spoken about them in the spirit that corresponds to the strategic partnership between our countries.

The economic relations between our countries are developing very well. We looked back over these relations just now and we know that there is potential for further development and that there are some projects that we still need to carry out, among them, the Northern Stream Gas Pipeline. As far as the outstanding difficulties regarding this project are concerned, we in Germany will work on settling issues with our European partners.

I think this project is an important part of organising reliable energy security. It has always been our view that our work on this project must not be to the detriment of any of the other European Union members and that other European Union members should be able to take part in the project. But overall, the project has our full support.

We have had many different meetings, forums and gatherings such as the Petersburg Dialogue, for example, which is a forum we would like to see continue to develop.

Our two countries have extensive scientific cooperation and are working together on projects of immense importance from a research point of view, projects that one country cannot carry out working on its own. We are very pleased that Russia is making an important contribution.

I am also thankful for the cooperation during Germany’s presidency of the G8. Russia passed on the baton of the presidency, so to speak, at the Heiligendamm summit and we were able to focus our work on particularly important issues such as cooperation in climate protection, which is a problem for Russia too. Russia has shown its sense of global responsibility.

We discussed issues on which our views differ, issues such as Kosovo and work in the United Nations (I am referring here to the resolution against Iran). It has become clear that many different countries can work together to resolve political problems and that this requires the participation not only of the United States but also of Russia and China.

I will also be meeting with President-elect of Russia Dmitry Medvedev today and I am pleased to have this opportunity. All doors are open to him in Germany. We want to continue our cooperation and engage in open and honest dialogue. I know that we have much in common.

I would like to remind you that a music festival will take place in Germany this year with Russia as the partner country. Russian music will be showcased at the highest level. This also deepens our understanding of each other and gives us the chance to get to know each other better and become more receptive to each other’s views.

QUESTION: Mr President, I have two questions. The first concerns NATO. Under what circumstances could Ukraine and Georgia join NATO?

My second question is under what conditions would Russia be willing to recognise Kosovo’s independence?

And, finally, do you think it possible that Khodorkovsky could be released during the new President’s term in office?

VLADIMIR PUTIN: Regarding NATO, the Chancellor and I said today that at a time when we no longer have confrontation between two rival systems, the endless expansion of a military and political bloc seems to us not only unnecessary but also harmful and counterproductive.

The impression is that attempts are being made to create an organisation that would replace the United Nations, but the international community in its entirety is hardly likely to agree to such a structure for our future international relations. I think the potential for conflict would be only set to grow. These are arguments of a philosophical nature. You can agree or disagree.

But NATO is already overstepping its limits today. We have no objection to helping Afghanistan, but it is another matter when it is NATO that is providing the assistance. This is a matter beyond the bounds of North Atlantic, as you are well aware.

As for the question of Georgia and Ukraine, Russia always comes up when the problem of democracy is discussed, but you either have democracy or you don’t. You cannot be a bit pregnant. The same goes for international relations.

If the overwhelming majority of the Ukrainian public does not want their country to join NATO, but their country is being drawn in nonetheless, we cannot consider this to be a democratic approach to international relations. Ultimately, each country decides for itself how best to ensure its security, and we will most certainly accept whatever the Ukrainian and Georgian peoples decide, but this has to be the decision of the people and not the political elite.

As for Kosovo and whether there is a scenario by which we could agree to Kosovo’s independence, yes, such an option exists, but it lies exclusively within the bounds of international law. There is no need to be a great expert to understand that recognising the independence of one of the territories that make up a sovereign state can only be done through a process of negotiation and with the agreement of all parties involved. If such a compromise were reached, we would of course agree with it.

Now, coming to the question of people sentenced in previous years for crimes such as corruption or crimes against the person, and you mentioned one such case, the decision to grant an amnesty is one of the powers of the head of state – the President of the Russian Federation.

QUESTION: Vladimir Vladimirovich, you just said that as NATO expands and takes in new members, the potential for conflict within the organisation will increase…

VLADIMIR PUTIN: No, I said the potential for conflict in the world.

QUESTION: Yes, in the world. But more and more countries in which conflict situations already exist would join NATO, and this would mean that the organisation unites within its ranks countries with an increasing conflict potential. Does this not seem illogical to our German partners?

I have a second question regarding Kosovo: Germany was one of the first countries to recognise Kosovo’s independence. Is there not the risk of setting off a chain reaction in other parts of the world and a rise in tension in the Balkans and in other countries?

One more question if you will allow: you have good relations with the Chancellor. Did these relations help you during your first meetings to overcome the differences that inevitably arise?

ANGELA MERKEL: I would like to make three remarks.

First, if the possibility of amnesty exists, this is something we would welcome.

Second, regarding NATO, I think that countries must decide for themselves whether or not to join the organisation, but it is also important that the public in all future NATO members support their country’s membership.

Third, one of the obligations of NATO member states is that they be free from conflicts. Of course, we see that there are conflicts within NATO too, and they have and still can undermine the organisation’s strength. This is something we must reflect upon in our discussions, and it is also something we will be discussing at the upcoming summit in Bucharest.

But as a NATO member, Germany cannot say that NATO is seeking to become a second UN. NATO exists purely as a defensive alliance based on common values. We are working actively in Afghanistan. We monitor the threats that exist there and we see that there also completely different threats today, threats that are very dangerous for countries where there is practically no leadership, in particular countries like Afghanistan.

As for Kosovo, our differences of opinion are widely known, but we discuss these matters often. Following the G8 summit in Heiligendamm, we entered the next phase of trying to get all the partners in the negotiations to sit down at one table together. These efforts were carried out through the ‘troika’.

This work was very important even though we did not obtain the desired result. The Federal Republic of Germany therefore decided to recognise Kosovo’s independence – we have a somewhat different interpretation of UN Resolution 1244 – but discussions on Kosovo will continue. Not all of the problems have been settled yet.

VLADIMIR PUTIN: As far as the idea that this is a precedent that could encourage separatism elsewhere in Europe goes, yes, this is one of our arguments and we think that it has given new impetus to separatism in Europe. No matter what people say, this impulse has been set in motion. This concerns the United Kingdom, Spain, and even Belgium, not to mention the post-Yugoslavia area. Take a close look at the situation. In general, we see here that our Western partners are following what was the Soviet Union’s approach on this issue.

Fortunately, our discussions have never turned into anything that could be called conflict, but given the extent of our relations, there have always been matters on which we disagree. As is always the case in such situations, good personal relations have always been a help in our work.

QUESTION: Mrs Chancellor, the next G8 summit will take place in Japan in June. Do you think the current Russian President will be present at this event, and if not, do you think you will need two telephone numbers in the future if you want to speak with the two most important political figures in Russia in order to coordinate your work?

Mr President, you said at one point that the investigation into the murder of our colleague, Anna Politkovskaya, is underway. Do you think this case will be solved?

ANGELA MERKEL: If I have been informed correctly, the new President will be inaugurated at the start of May, and so I can assume that the new President will be present at the summit in Japan and the current President will be thinking of us. I hope and I imagine that the new Russian President will take part in the summit in Japan.

Depending on the situation, you sometimes call three or four different people in the country. I will call the Russian President, but if the situation requires it or if I have the need or the right, I will also call others. I wish to have good relations.

I know that the current President intends to remain in politics and I can fully imagine that we will continue to discuss political matters with each other. I recall, for example, that both the President and the Prime Minister took part in the European Union-Russia summit. When we met in Samara, for example, on the Volga, I remember that Prime Minister Fradkov also took part. So, I think that we will continue to meet, but my direct partner in dialogue will be the new President, with whom I am to meet later today.

VLADIMIR PUTIN: First of all, on the issue of investigations into cases that have grabbed the headlines, you probably know that a number of cases, such as the murder of the deputy chairman of Russia’s Central Bank have practically been solved. We had another recent crime, unfortunately, the murder of the prosecutor of Saratov Region, and this case has also been solved. I certainly hope that Politkovskaya’s murder will likewise be solved. I cannot say when this will happen, but the sooner the better.

I would just like to make one remark. Of course, I have long since become used to the labels saying that it is hard to have dealings with a former KGB officer. Dmitry Anatolyevich Medvedev is freed from the task of having to prove his liberal views, but I can tell you that he is just as much a Russian patriot – in the good sense – as I am. I don’t think our partners will find him any easier to deal with. He is very much a patriot of his country and will stand up most actively for the Russian Federation’s interests on the international stage.

QUESTION: Germany is one of Russia’s main partners in Europe and one of the European Union’s biggest members. What is your assessment of the level of cooperation between Russia and Germany, and what opportunities exist for Russian companies to invest in the German market?

ANGELA MERKEL: I will start with the second question. Russian companies can count on fair competition in Germany. This has always been the case. The principle of reciprocity should apply here: as German companies have access to the Russian market, so should Russian companies have the same degree of access to the German market. We have already cited examples of such reciprocity. Russian and German companies have a high level of cooperation.

Regarding the law on foreign economic activity, we are working on provisions that other countries such as France, Britain and the United States already have but take much farther. Countries need to be able to see who is investing when it comes to areas that are sensitive from a security point of view. This is something perfectly normal in international terms. I can tell you in all certainty that British, French, American and Russian companies will all be treated in the same way.

Regarding cooperation in the European Union, I hope that perhaps even at the next European Union-Russia summit, which will take place under Slovenia’s presidency, we will make progress towards signing the new basic agreement that is so essential.

I think that the situation has already improved considerably in this regard. Taking the Polish meat issue, for example, I know that Mr Tusk, the Polish prime minister, visited Russia, and that some progress has been made.

For my part, I can say that I want us to move forward so that we can take the strategic relations between Russia and the European Union to a new and more advanced level.

Every agreement can be the object of further work, but our relations are developing so fast that it is absolutely clear that a new agreement would be very welcome for the European Union’s member states, and I think it would be very good for Russia too.

VLADIMIR PUTIN: I agree with my colleague. We want to continue working together with the European Union.