Future of Kaliningrad missiles in US hands – Medvedev

Dmitry Medvedev says Russia would have no choice but to react should the US take the unilateral step of building missile bases in Eastern Europe. The President says such a response could include deploying Iskander missiles in Kaliningrad. However, he says

Medvedev’s interview to Le Figaro

Mr President, I would like to express my sincere gratitude to you for choosing Le Figaro for giving your first interview to a foreign publication since Barack Obama was elected president.

Many observers were surprised by your first reaction, as you threatened to deploy missiles in Kaliningrad. Will this put your relations with the newly elected president on a sort of conflict basis?

I am ready to comment on your question. You know, I would not in any way link my speech on November 5 to any other political events, apart from my address to the Russian Federal Assembly. In other words, it is not in any way linked to the US presidential election or any other political events.

What’s more, it’s an internal document. Of course, if we consider that the presidential address to the Federal Assembly is delivered once a year, I could not but react to a number of serious political events and the threats our country is facing, one of them being the decision by the current US administration to deploy anti-missile systems in Europe, even without the consent of a consolidated Europe, and even without prior consent from NATO, but based on bilateral agreements with certain countries.

We had constantly asked our US partners the same question: Why do you need this? How efficient is it and who is this system aimed at? We received no reasonable answer to any of those questions. What’s more – we proposed a different step and proposed creating a global defence system using our radar systems, as well as radars in partner countries like Azerbaijan. There was no progress in any of those areas.

Therefore, sooner or later we had to retaliate. My predecessor has mentioned, and so did I – some time ago – that we cannot but react to the unilateral decisions regarding the missiles by our US counterparts. That’s why I voiced our decision during my speech. I think it’s an absolutely adequate response. We did not start this. It is only a response to the unilateral move to deploy the US radars and missiles.

However, we can give up this position altogether, should the new US administration analyse all the consequences of deploying all the missiles and radars, analyse their efficiency and many other facts as to whether these means are adequate to react to the threats from so-called rogue states.

The first US reaction – from the new US administration – gives hope. At least, our future partners are thinking about whether it is useful or useless, efficient or inefficient, which means there is something to discuss. We are ready for such talks and are ready even for a ‘zero’ option. It would be quite a normal way out of the current situation.

What’s more, we’re ready to continue working on the global defence system, with participation from both the USA and the EU, as well as the Russian Federation.

As for my relations with the president-elect Barack Obama, I’ve had a conversation with him – a good one. I hope we’ll be able to build normal partnership relations with the new administration and find solutions to some difficult issues which we could not find with the current administration.

The new US president has a very large bank of trust. He has been elected at a very challenging time. And I wish him success and good luck in everything which he has to do.

Will you have a chance to meet Obama during the G20 meeting in Washington?

It’s an internal US political  question, because, as far as I understand, they are now deciding whether it is appropriate for the newly elected president to show up at such events, given that the acting president is still in office. Anyway, Mr. Obama and I agreed that we will meet without delay. It is necessary both for the US and the Russian Federation.

You are now heading to Nice for the EU-Russia Summit. Some EU countries voice their concerns about the continuing presence of Russian troops in South Ossetia and Abkhazia. What’s more, their number exceeds the number of troops stationed there before August 7. Are you going to decrease the number of the troops in South Ossetia and Abkhazia, and is your decision to recognise the independence of South Ossetia and Abkhazia final?

To answer your second question immediately – our decision is final and irreversible. This is no laughing matter. We have recognised two new international entities. From the point of view of international doctrine, these two new entities do exist.

As for our military contingent, let me draw your attention to the fact that no document, including my joint plan with President Sarkozy, envisages that this contingent should follow any rules.

We’ve talked about settling the conflict, withdrawing the peacekeeping forces and the additional contingent when the actual war was going on. As for the current situation, it is regulated by our current agreements with these two new international entities.

The size of this contingent is stipulated by bilateral agreements, between Russia and Abkhazia, on the one hand, and Russia and South Ossetia, on the other. We will decide on our own what type of contingent is needed, as well as how and where it will be stationed, and what military bases will be built in the region. All this is done to protect the two new subjects of international law and their citizens and prevent a humanitarian catastrophe. The size of the contingent should be enough for meeting these objectives.

President Sarkozy and other heads of EU member states have agreed to renew talks with Russia on signing a new strategic partnership treaty. What does Russia expect from such a strategic partnership?

First, I’d like to say I appreciate the efforts by the French President to set up a proper, productive, long-term and mutually beneficial dialogue between Russia and the EU. He’s doing a great job.

These are the type of relations that we want to have with the EU. We believe it’s absolutely necessary, both for the Russian Federation and the EU. It’s because we all live on the same continent, we all have open economies. We’re interested in mutual investment. Europe gets oil and gas from Russia, and we get positions on the European market which are important for us.

The volume of trade turnover between Russia and France is 16 billion US dollars per year, and it’s still growing. There are billions of dollars of investment every year. These are major figures, and it’s only one country of the EU.

That’s why we need to have a proper, solid foundation for these relations. The agreement is such a foundation.

So we are welcoming any decision to renew the negotiations on this issue. In the near future, when I’m in Nice, we’ll discuss it with France, the current EU chairman. I will talk to my colleague Nicolas Sarkozy, as well as to my other colleagues.

Russia has been, is and will be an integral part of Europe.

We’re interested in very close, partnership ties with the EU.

Can you name any particular spheres where the cooperation between Russia and France can develop most actively?

Of course I can. There are several major projects where our countries have been successfully cooperating. Let’s start with energy. There are major projects involving French companies traditionally buying oil and gas in Russia. ‘Total’ is one such company. These are major, multi-billion, investment projects future-oriented. But our cooperation is not limited to energy. We also have a number of projects in the hi-tech sphere. Cooperation in aviation industry… new modern materials… All this is enough to say that we have quite a rich palette of relations.

I’d like to specially stress that we’re interested in French investment into the Russian economy, and we hope that France will also be interested in investment from Russia. This binds us together more than anything else. This is the main binding factor.

Now, we have to work together to find ways of solving the problems brought about by the financial crisis.

This week, you will take part in the G-20 meeting in Washington, where the consequences of the financial crisis will be the main item on the agenda. Are you bringing any real solutions for reforming the global financial system with you?

I’m not only bringing it, I’ve already sent all I had. I’ve talked to my colleague Nicolas Sarkozy, and my other colleagues – I mean Germany’s Chancellor Angela Merkel, Italian PM Mr. Berlusconi, and British PM Mr. Brown. We’ve discussed the situation in the world economy and finance system. We’ve sent in our suggestions on solving the issue.

It’s not a secret that we’re looking at many things in the same way – the origins of the crisis, and the answers we’ll have to come up with.

What really has to be discussed is the complex of measures aimed at creating long-term financial stability, and the ways of reforming the existing world financial architecture.

In other words, we need to give answers to two major questions – first, how to deal with the current crisis and its consequences, and second – how to prevent it from happening in the future.

The future financial architecture has to be more transparent, more predictable and better-controlled. It has to be based on the strong foundation of international agreements. It has to create a new, or a partially reformed system of international institutions, including the so-called top level creditor institutions. It’s got to create a new system of corporate reporting and risk insurance, as well as a new, more transparent accounting system. All these things have to be discussed now, and that’s why we’ve come up with a suggestion to create a rapid response system for reacting to emerging crises.

This system has to be recognized by all states, and it has to work in the interests of all states, not just one country, even the most powerful or largest countries.

We have to create something like the Bretton-Woods system, for new Bretton-Woods-like agreements. I don’t know where they will be signed, but they are necessary.

 Russia will be unable to escape the financial crisis, and the financial recession which follows. Is Russia ready to initiate large-scale plans to revive its economy, to counter the recession, similar to the plan recently announced by China?

Of course, this is now the number-one challenge. In its work, our country’s leadership is mainly trying to minimize the consequences of the crisis.

We have adopted a number of emergency measures to improve money supply and liquidity in the spheres of banking and manufacturing. This doesn’t mean these measures are enough. We will continue monitoring the situation and try to respond adequately. We’re also using the experience of our partners, and we’re watching the steps taken by our European colleagues. To a large extent, our efforts are sometimes simultaneous, and sometimes they’re going in the same direction. We’re also watching the actions of our Chinese friends.  But you have to make allowances for the size and the nature of the economy. There are no universal recipes here, although the crisis affects virtually all countries.

Are you considering the possible nationalisation of banks, which would allow to better use the existing credit resources, because we’re witnessing an outflow of capital.

Yes, there is an outflow of capital, but it cannot be the reason for nationalising banks. The issue is different. We have to preserve the most important, pivotal banks, which are responsible for infrastructure and money circulation inside the country. Second, and equally important goal is to preserve the people’s deposits. Almost all deposits in Russia are guaranteed by the state.

At the same time, though, we must monitor the situation and be ready to take readjustment measures, if necessary… up to transferring share stock ownership to the state… This method has been successfully used by other countries, such as the US, Great Britain and others.

But, even if this will lead to a partial transfer of ownership rights to the state, it will only be a temporary measure, and such stocks will later be sold.

In my recent address to the Russian Federal Assembly, I’ve said that we don’t need a ‘governmentalised’ economy. We need an efficient market economy, firmly based on private property.

The drop in oil prices has seriously affected the Russian budget. Do you expect the prices will start rising?

You know, any drastic decrease in oil and gas prices, or, on the contrary, sharp speculative growth, always leads to instability.

Of course, we cannot be happy when oil prices drop below reasonable levels, which are today seen by all oil-producing countries at relatively the same levels. But our economy, our budget as a whole, is rather well protected against such oil price drops.

We have the so-called reserve fund, which we called earlier the ‘stabilisation fund’. It helps smooth out such problems and keeps the budget spending on social and economic development on the same level.

In the long-term perspective, I’m sure the current structure of oil prices, as well as prices for other energy carriers, will be adjusted, and we will witness a rise in oil prices. This is completely obvious.

As for the current situation, it is somewhat predictable, but not completely, because, as far as I know, there’s no-one who could give a reliable forecast of oil price dynamics.

This is the factor which turns the science of economy into art.

Mr President, you’ve just proposed to increase the presidential term from four to six years. Some observers were quick to comment that this decision will enable Vladimir Putin to come back to power as president. Are you planning to work till the end of your term, or do you see a possibility of retirement?

Well, I am working now, why do you suggest I would make such decisions?

There’s only one thing I can tell you for certain – these changes will only affect the candidate which will be elected to the post of president after these amendments come into force.

The office terms of supreme power, be it the president or the parliament, should first and foremost suit the interests of the country’s development. If we take a look at France’s recent history, the seven years in power introduced in Charles de Gaulle’s constitution allowed the solution of a whole range of problems. Later, the people of France saw that it was no longer relevant, and the necessary changes were introduced. We’ll wait and see. We’ll work with this office term now, but who knows what will happen in 30 or 40 years.

 So, can you make it clear, will these changes, after they are adopted, affect you, or will they only affect your successor?

According to general legal principles, these changes, after the constitution has been amended, will only apply to the person newly elected to this post. They will not be retroactive. The current term in office is only four years.

It appears that there’s still instability in the Russian Caucasus, there are outbreaks of violence. Can we speak about renewed terrorist activities in the region?

You know, it’s definitely too early to sit back and relax. We’re speaking about the situation in the Caucasus as a whole, and the terrorist situation in the world, as a whole. Terrorism, by its nature, is international. It makes its way through borders using all kinds of slogans, and it’s followed up by all kinds of ideas. So I certainly cannot say that the terrorist threat is eliminated in the Caucasus, or any other region.

We all have to face it. The Russian Federation had to face it in the 1990s, when several of the country’s regions, as a result of terrorist activities, were not under Russian jurisdiction any longer. Bandits were in power there.

We managed to restore constitutional order in the Chechen republic, and ease the tensions in other republics in the North Caucasus… Similar problems appear all across the globe… And you have to react on time. The situation now is, really, not very calm.

Not long ago, there was an explosion in North Ossetia, people were killed. The investigation’s main suspicion today is that it was a terrorist act.

The goal is not only to scare people, but to spark new conflicts, as well.

That’s why we’ll spare no effort and take all measures to preserve constitutional order in the region. It was also the reason for a number of decisions which I’ve made to stabilise the situation on the whole, to add more dynamic to the situation’s development in some regions, and to strengthen the leadership in some of Russia’s regions, including the North Caucasus.

Terrorism, and crime in general, usually intensify when non-regional forces make their way into the region, especially if it’s such a volatile region as the Caucasus.

The August crisis showed that when leaders of other countries lose control at some point and resort to aggression, in the end, it destabilises the situation in the region as a whole.

If Russia didn’t interfere and enforce order in August, it’s hard to tell what would be happening in these regions now.

It’s quite likely there would have been major bloodshed, and large-scale terrorist activities aimed at breaking up the existing states.

 And, finally, a personal question. Although you’re facing serious challenges, are you satisfied with having to carry out the duties of the President?

I’ll tell you frankly that it’s a very interesting job… But it’s also a big responsibility… And this is not a figure of speech… You have to be involved in solving all kinds of problems 24 hours a day.

Thank you, I wish success to you and your newspaper.