Current dynamics of Russian-Turkish relations

Press-conference of Russian Prime Minister Vladimir Putin and Turkish Prime Minister Recep Tayyip Erdoğan

13 January 17:00

Prime Minister Vladimir Putin and Turkish Prime Minister Recep Tayyip Erdoğan address a news conference on the outcome of their negotiations

Today we have certainly discussed our ambitious joint projects, in particular, the South Stream gas pipeline and the Samsun-Ceyhan oil pipeline. The fact, that these two projects are crucial to Russia, Turkey and the whole of Europe both in terms of finding a solution to environmental problems, and in terms of ensuring reliable energy supplies to Europe, is, I think, indisputable.

Prime Minister Vladimir Putin and Turkish Prime Minister Recep Tayyip Erdoğan address a news conference on the outcome of their negotiations.

Vladimir Putin: Mr. Prime Minister, ladies and gentlemen,

Our talks today have been very productive and meaningful. We have held nine such similar meetings, all of which were, like our talks today, conducted in an atmosphere of friendly confidence and understanding.

We discussed key bilateral issues in detail, focusing on closer Russian-Turkish trade and economic partnership in all its aspects.

Our bilateral trade has grown steadily over the years, and in 2008 Russia became Turkey's main economic partner.

The global financial and economic crisis undoubtedly caused a slight decline in our bilateral trade. But that is why we have come together today, to see how we can overcome these hardships together, how we can increase investment and return to steady growth in trade and in our economic partnership.

As Mr. Erdoğan said today, our trade can hit the $100 billion mark within five years. I think this goal is attainable.

We are determined to continue using tried and tested forms of cooperation, but also to explore new areas of partnership.

With regard to existing areas and traditional forms of partnership, I would draw your attention first and foremost to our cooperation in the field of energy.

Russia has been, and remains Turkey's largest, and highly reliable, energy supplier. We provide approximately 70% of Turkey's demand in natural gas. We believe we can take this further, moving beyond simply trading, to asset exchanges and cross- capitalization.

Today we discussed our ambitious joint projects-in particular, the South Stream gas pipeline and the Samsun-Ceyhan oil pipeline. The fact that these two projects are crucial to Russia, Turkey and the whose of Europe both in terms of finding a solution to environmental problems, and in terms of ensuring reliable energy supplies to Europe is, I think, indisputable.

We are ready to cooperate in the electric and nuclear power industry. We signed an intergovernmental agreement on cooperation in the civilian nuclear power industry last year. It provides a solid basis for successful partnership in that field, too. We are determined to build up the high tech part of our bilateral links. Investments will be channeled to the high-tech sector.

Today, Turkish companies have $6 billion invested in Russia, and Russian companies have $4 billion invested in Turkey. Lucrative investment opportunities span a wide range of sectors: steel, construction and light industry, telecommunications, transport and many other fields. Russian companies are also ready to take part in privatization programmes carried out by Turkish government.

We have talked about the prospects for expanding our cooperation on agriculture, including supplying the Russian market with poultry and other foods.

We have mentioned the tangible progress that has been made on difficult issued we have discussed on many occasions before, for example: customs regulations. Today we can state that they have been resolved.

Two Turkish banks have launched rouble transactions. We will extend the use of national currencies in Russian-Turkish trade.

Last but not least, turning to cultural matters, we have agreed to start work on an intergovernmental agreement on visa-free trips for Russian citizens to Turkey and vice versa. I hope these preparations will not take us long.

I thank Mr. Erdoğan for the constructive attitude he has displayed at the negotiating table, and all our Turkish friends and partners for their cooperation throughout 2009. I wish everyone success this year. Thank you.

Recep Tayyip Erdoğan (as translated):Thank you (in Russian).

Ladies and gentlemen,

I would like to begin by expressing my gratitude and sending my best wishes to the friendly Russian people. I am glad to have this opportunity to visit Russia now.

Thank you for the hospitality you have shown me and my delegation from the moment we landed in Russia.

My talks with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin have been really very useful, fruitful and constructive.

We discussed our bilateral relations in detail; we talked about how we should improve them and guarantee their further development.

In 2008 Russian-Turkish trade reached truly historic levels. Though it shrank significantly last year due to the global financial crisis, we intend, within the next five years, to boost it to $100 billion per year.

In June, we will celebrate the 90th anniversary of the establishment of diplomatic relations between Soviet Russia and the new republican Turkish government. The fact that our relations are so positive now, developing dynamically in every sector, is a source of great satisfaction.

We understand that Russian President Dmitry Medvedev will visit Turkey in May or June this year. During this visit, we will see real progress on a series of essential areas in the development of our bilateral relations.

Turkey is proud to have Russia as its leading foreign economic partner, and that it ranks 7th among Russia's foreign economic partners.

An essential part of Russian-Turkish trade and economic relations is our cooperation in the energy sector. This partnership plays a unique role due to the direct impact it has on bilateral trade and economic relations, and because of its strategic influence. We are especially satisfied to see that developing cooperation in natural gas has now spread to other fields of energy: in particular to oil and nuclear power.

Our countries' relevant agencies and experts will work to step up partnership in the fields I have mentioned so as to obtain practical results as soon as possible.

We are working together, as before, to establish an oil processing joint venture, which we regard as yet another important step forward in our energy partnership.

I want to lay special emphasis on the following. As we know, our bilateral trade suffers from the fluctuations of foreign currency exchange rates on the market.

Turkey has finished reforming its regulatory basis to allow us to start using national currencies. Two Turkish banks have already started carrying out foreign transactions in Russian roubles, as Mr. Putin has mentioned here.

Mr. Putin has informed me that Russia is doing the same. As soon as this work is complete, we will be ready to switch entirely to the rouble and the lira for bilateral transactions. Business in both countries will benefit, liberated from their dependence on the speculative fluctuations on the currency markets. So it will become more competitive. This change will also symbolically express both countries' independence.

I would like to express my appreciation to President Dmitry Medvedev and Prime Minister Vladimir Putin, and through them, to the entire Russian nation. Russia presently ranks second after Germany in terms of the number of tourists who visit Turkey. Despite the global economic crisis, foreign tourism saw only a token shrinkage last year against 2008 due to our work.

We not only expect Russian tourists to come to Turkey but a growing number of Russian entrepreneurs and investors as well. I am convinced that our partnership will continue to grow ever closer in every field, and particularly in agriculture.

Mr. Putin was ahead of me to announce that we had determined to start preparations for visa-free bilateral arrangements. I think we will soon conclude this work, thus extending our partnership. I hope the corresponding decisions will have been taken by the time Mr. Medvedev visits Turkey.

May the year 2010 bring peace, wellbeing and prosperity to our nations and the whole world! Thank you.

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Question: This question is for Mr. Putin. Though I represent the Sabah daily newspaper, I am asking my question on behalf of eight Turkish media correspondents covering the visit. Mr. Prime Minister, you have indeed discussed many regional problems at the negotiating table today. My question concerns one of them, the situation in the South Caucasus.

As we all know, major positive changes began with the signing, on October 10, 2009, of protocols on the normalisation of Turkish-Armenian relations. Both countries have now submitted protocols to parliament for ratification. Armenia is making swifter progress.

Turkey, however, has said more than once that if this process is to be expedited, progress should be made on resolving the Nagorno-Karabakh situation, proceeding from relevant resolutions of the UN Security Council and the principle of Azerbaijan's territorial integrity.

Does Russia intend to do anything to expedite this process?

Vladimir Putin: First of all, I want to say that Russia, more than any other country, is interested in the normalisation of relations between all the countries it neighbours in the region. A vast array of ties bind us with Azerbaijan and Armenia alike. There are millions, and I stress that, millions, of Azeris and Armenians who live in Russia, and who have friends and relations here.

Russia's economic contact with those countries is developing. It is known, for instance, that we have begun to import natural gas from Azerbaijan. I repeat, we are interested in the prompt resolution of all problems inherited from our Soviet past. The Karabakh problem is no exception. We are certainly aware also of Turkey and Armenia's troubled past. In this sense, too, we want to see the normalisation of Turkish-Armenian relations.

We have welcomed Turkish initiatives to normalise these relations, and view them with great optimism. We hope that this negotiation process will be devoid of any trace of extremism or fundamentalist positions rooted in the problems of the past. The Armenian leadership is also heading in the right direction, and we welcome this. I understand that both the Karabakh and Turkish-Armenian problems are extremely complicated in their own right, and I don't think they should be joined together in a package. Each problem is hard to resolve even taken on its own, and if we lump them together, any hope of their resolution automatically recedes into the distant future. So I don't think that either strategically or tactically there is any benefit from drawing these problems together. We will do everything within our power to help resolve each of these problems.

Doubtless, the solution depends on Armenia and Azerbaijan in the former instance, and on Turkey and Armenia in the latter. We will treat the stances of all our partners with the utmost respect, as we have always done.

Russia's mission is to support whatever positive initiatives are needed to settle these two complex problems.

Question: Good afternoon. Mayak and Vesti FM Radio. I want to ask Mr. Erdoğan about the construction of a nuclear plant in Turkey. The situation is rather vague. As we know, Russia won the tender in September 2002, and the proposals made by the Russian companies were approved. However, recently, in November, the Supreme Administrative Court found certain irregularities in how the tender was held, and it was officially declared to be invalid. Will Russia build the plant, after all, or not? And is Turkey able to remove those tender violations?

My question to Mr. Putin develops this topic. How are the related negotiations with Turkey proceeding? What competitive advantages, do you think, do Russian companies have against other participants in the tender?

And if you allow me, I feel I must ask another question, about South Stream, one of the largest joint ventures. Its construction will begin quite soon. Are the partners ready to start work in Turkey on schedule? Please, Mr. Erdoğan, does Turkey confirm its agreement, made last August, for work on this to start as soon as November 2010?

Vladimir Putin: So your Turkish colleague asked only one question on behalf of eight journalists, while you are asking a whole range of questions on your own behalf.

Recep Tayyip Erdoğan: As for the nuclear plant tender, a decision was made following the court verdict that further work will be based on direct inter-governmental agreements. The relevant ministries and agencies in both countries are working on this, and negotiations are underway. We hope they will soon conclude, and that we will have made some real headway. I do not think it will take long. In fact, they are in their final stages.

Vladimir Putin: And South Stream?

Recep Tayyip Erdoğan: That question was addressed to you, Mr. Putin.

Vladimir Putin: As for the nuclear plant, we are sure of our major competitive advantages. And in terms of technology, it is at about the same level throughout Europe. Where European companies have had particular successes, we invite them to join in partnership. When we implement our projects abroad, we give 15-20% of the work to our European partners. Currently this is mainly Siemens. Unlike many of our competitors, we can provide the full service. We grant credits, supply equipment, and offer major construction works to local builders. This accounts for 20-25 or even 30% of the whole contract. We supply nuclear fuel and are willing to take and process nuclear waste. This range of services allows us to charge reasonable rates, well below what our competitors demand. We have agreed today to go ahead with this and we are confident of its success.

As for the works on South Stream, they are going to schedule. I thank Mr. Erdoğan and the Turkish government once again for authorising a Russian company to carry out exploration work on the sea bed of the Black Sea. Environmental assessments have been 100% completed and 85-90% of the geological and seismic studies have been carried out. The data obtained will be compiled and submitted to the Turkish government for their evaluation quite soon.

The Turkish government has pledged, in an agreement, to consider these documents and authorise construction before November 10 this year. The Prime Minister confirmed this during today's talks. I am sure that this will go according to plan. Incidentally, we have also agreed to step up work on another joint project, Samsun-Ceyhan, and I have even suggested a tripartite inter-governmental agreement between Turkey, Russia and Italy because all three countries are involved in both projects. Mr. Erdoğan has agreed, and we will now discuss this idea with our Italian partners.