November 13, 2008,

Took place on 11 November in Moscow

Interview to the French Newspaper Le Figaro

ETIENNE. MOUGEOTTE: Mr President, I would like to thank you sincerely for giving your first interview to the foreign press since the election of President Obama to Figaro Newspaper. 

Many observers were very surprised by your initial reaction. You threatened to deploy missiles in Kaliningrad. Isnít there the risk that this could introduce conflict to your relations with the new American President?

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: You know, I would not like to make a connection between my speech on November 5 and any political events other than my Address to the Federal Assembly itself. In other words, there is no connection to the elections in the United States or to any other political events abroad. This was a domestic address.  

Of course, given that the President addresses the Federal Assembly only once a year, I could not but react to a number of important international events and to the threats that our country faces. One of these is the current U.S. Administrationís decision to deploy a missile defence system in Europe, and this without consolidated agreement from the European countries and without even preliminary agreement from NATO, but on the basis of bilateral agreements with a number of countries.

We always asked our American partners one and the same question: why do you need this system, how effective will it be, and who is it directed against? But we have not received a clear answer to any of these questions.

Moreover, we proposed a different step: setting up a global defence system using our radar facilities and the radar facilities of our closest partners such as Azerbaijan. But no progress has been made on any of these initiatives.

We therefore had to take measures in response sooner or later. My predecessor said this, and I said the same a while ago. We have no choice but to react to what are essentially unilateral decisions that our American colleagues have taken. And I set out our response in my Address to the Federal Assembly. I think that this is a completely appropriate response. It is not we who began all of this. We are simply responding to the unilateral decisions on deploying missiles and a radar facility.    

But we could reconsider this response if the new U.S. Administration is ready to once again review and analyse all the consequences of its decisions to deploy the missiles and radar facilities, analyse their effectiveness and a number of other factors, including how appropriate these means are as a response to the threat from the so-called rogue states. 

The first reaction we have seen from the new U.S. Administration gives us grounds for hope. In any event, our future partners are reflecting on how useful and effective this system could be, and so it seems that we do have something to discuss. We are ready for talks, and at the same time we are also ready for the Ďzero optioní. This would be a completely normal way out of this situation. Moreover, we are ready to continue work on the idea of a global defence system in which the United States, the European Union countries and the Russian Federation would all take part.

As for my relations with Barack Obama, the President-Elect, I had a very good conversation with him. I hope that we will succeed in building a full and normal partnership with the new administration and find solutions to some of the complex issues that we and our colleagues in the current administration have not managed to resolve. 

The new President of the United States has a large margin of public confidence. He has been elected at a very difficult time and I wish him success in the work he is about to undertake.

E. MOUGEOTTE: Will you have the opportunity to meet with Obama during the G-20 summit in Washington?

DMITRY MEDVEDEV: This is really a domestic matter, and as far as I know they are in the process of deciding whether it is appropriate for the President-Elect to be present at this kind of event, given that there is still an incumbent President in office. 

In any case, the President-Elect and I agreed that we will meet without delay and obstruction. This meeting is important for the United States and for the Russian Federation.

E. MOUGEOTTE: You are about to set off for Nice to take part in the Russia-EU summit. We know that a number of EU members have expressed concern over Russia maintaining military contingents in South Ossetia and Abkhazia. Moreover, the contingent is bigger in number than was the contingent in place there before August 7. Do you plan to reduce the size of the Russian contingent in South Ossetia and Abkhazia?

Second, is your decision to recognise the independence of South Ossetia and Abkhazia a final decision?

DMITRY MEDVEDEV: I will start by answering the second question: our decision is final and irreversible. These are not joking matters. We have recognised these two new subjects of international law. From the point of view of international law, these two subjects now exist. 

As for our military contingent, I draw your attention to the fact that not a single document, including my joint plan with President Nicholas Sarkozy, stipulates any rules for this contingent. What we agreed on was clearing the way to settling the conflict and the withdrawal of peacekeepers and the reinforced contingent at the time when military units were in place there.

As for the current situation, it is regulated by bilateral agreements with these two new subjects of international law. The size of the contingent is determined by Russiaís agreements with South Ossetia and Abkhazia respectively, and we will decide ourselves what size contingent is needed, where it will be stationed, and what military bases will be present there. These steps are all being taken in the interest of defending these two new subjects of international law, protecting the people who live there, and making sure another humanitarian disaster does not take place. The size of this contingent has to be sufficient for fulfilling these missions. 

E. MOUGEOTTE: President Nicholas Sarkozy has reached an agreement with the other leaders of the EU member countries to renew talks with Russia on concluding a new strategic partnership agreement. What does Russia hope to see from this strategic partnership with the EU?

DMITRY MEDVEDEV: First of all, I want to say that I give due recognition to the efforts the President of France has made and is making now to smooth the way towards a full, productive, long-term and mutually advantageous dialogue between Russia and the European Union. He has really done very well indeed in this work.

We do indeed seek these kinds of relations with the European Union and we think that this is vital for Europe and for Russia because we share the same continent, have open economies, and are all interested in reciprocal investment. Europe receives energy supplies from Russia, and we purchase a number of important goods in Europe. Our bilateral trade with France alone comes to more than $16 billion a year and is growing, and we have investment that comes to billions of dollars every year. These are serious figures, and this is just with one of the EU member countries. 

We therefore need a serious and full-fledged foundation for our relations and it is the agreement that will give us this foundation. We therefore welcome the decision to resume talks and soon, in Nice, I will discuss this with France, the country currently holding the EU presidency, with my colleague Nicholas Sarkozy and my other colleagues. Russia is an integral part of Europe. It always has been and always will be. We have an interest in as close a partnership with the EU as possible.   

E. MOUGEOTTE: Can you name some specific areas where cooperation between France and Russia could develop most intensively?

DMITRY MEDVEDEV: Yes, of course. Why not? We have several big projects on which we are working together well.

I will start with the energy sector. We have big projects with the French companies that traditionally buy oil and gas from Russia, companies like Total, for example. These are multi-billion-dollar investment projects for the future. 

We are working together not just in the energy sector. We also have a number of projects in high technology, in the aviation industry, for example, and in the field of developing various modern materials. This gives an idea of the wide range of fields in which we work together.

I note too that we are interested in attracting French investment in the Russian economy and we hope that the French economy will in its turn welcome Russian investment. This is the most important area that ties us together.

Now we need to find answers to the difficult challenges the financial crisis has put before us, and this is something we need to do together.

E. MOUGEOTTE: This is precisely the subject of my next question. This week, you will take part in the G-20 summit in Washington, which will examine ways to overcome the financial and economic crisis. Will you be taking specific proposals for reforming the financial system with you to Washington?

DMITRY MEDVEDEV: I will not be simply taking proposals but have already sent them.

I have spoken with Nicholas Sarkozy and with other colleagues, Federal Chancellor [of Germany] Angela Merkel, for example, Italian Prime Minister Silvio Berlusconi and British Prime Minister Gordon Brown about the situation in the world economy and the crisis that has hit the global financial system. We have already sent our proposals.

I do not think I will be letting out any secret in saying that we share the same views on many issues: on the nature and origin of this crisis, and on the responses we should take.

I think that what we need to discuss is a whole complex of solutions that concern ensuring long-term financial stability in general and reforming the financial system as it exists now. In other words, we need to answer two big questions: how to respond to the current crisis and minimise its consequences, and how to prevent new crises.

Regarding the future of the financial system, it needs to be made a lot more transparent, predictable and manageable. It needs to be based upon a solid foundation of international agreements, and we need to establish a new or partially reformed system of international institutions, including the upper echelon credit institutions. We need to establish a new system for corporate reporting, and for risk insurance, and we need a clearer and more transparent system of accounting and financial reporting.   

These are all things we need to discuss right now, and this is why we have proposed examining in addition what we have called Ďthe idea of early warning of emerging crisesí. This is a system that should be accepted in all countries and that should work in the interests of all and not in the interests of just one country, even if it is the biggest and strongest. Overall, what we need to do is lay the foundations for a new Bretton Woods package, for a new system of Bretton Woods agreements.

E. MOUGEOTTE: Russia will probably also feel the effects of the economic crisis and the economic downturn that it brings with it. Is Russia ready to carry out far-reaching plans to reinvigorate its economy and prevent a recession? Perhaps it could consider a plan similar to the one China has just announced?

DMITRY MEDVEDEV: Yes, of course, this is the biggest challenge at the moment. Our entire government is working on minimising the consequences of the financial crisis right now. We have taken a number of urgent measures to improve the liquidity situation in the banking sector and in the real sector of the economy. But this does not mean that this is all we can do. We will keep close watch on the situation and will try to take the most appropriate action.

We are making use of our partnersí experience too. We are following the decisions the European Union is taking and to a great extent we are working synchronously in some areas and in similar directions in others. We are also following the decisions our Chinese friends have taken. But we need to take into account the size and nature of each countryís economy of course. There is not a standard recipe, even though this crisis is having an effect on practically all countries.

E. MOUGEOTTE: Is the issue of nationalising banks on the agenda? This could make it possible to make better use of existing credit resources, given that we have seen an outflow of capital abroad of late.

DMITRY MEDVEDEV: Yes, the outflow of capital has been quite sizeable, but this is not a reason to nationalise banks. This is not the issue. We need to maintain the big banks, the banks most important in ensuring the circulation of money resources throughout our country. That is the first point.

Second, and just as important, we need to protect peopleís deposits. Practically all deposits in Russia are guaranteed by the state.

We also need to monitor the situation closely, of course. If need be, we will take recovery measures right up to transferring a block of shares to state ownership, for example, as has been done with good results in the United States, Britain and some other countries. But even if there does end up being a partial transfer of ownership to the state, I think that this would be nevertheless just a temporary measure and these shares would later be sold.

I said in my Address that we do not need a state-owned economy. What we need is an effective market economy based on private ownership.

E. MOUGEOTTE: The drop in oil prices has had a serious impact on the Russian Federationís budget. Do you think that oil prices will start rising again?

DMITRY MEDVEDEV: Any radical drop or any sudden speculative rise in energy prices always creates instability. 

Of course it does not make us happy to see oil prices drop below the reasonable limits that all of the oil exporting countries see today as being within roughly the same price range.

But our economy and our budget overall are quite well insulated against this kind of sudden drop in oil prices. We have the Reserve Fund, which was previously known as the stabilisation fund, and it allows us to soften the impact of these problems and not have to reduce budget allocations for social development and for economic development in general.

In the long term, I am sure that the current oil price structure, and the prices for other energy sources, will undergo a correction and we will see a rise again. I think this is evident.

As for the current situation, it is predictable but not entirely so, because I do not know a single person who could predict for sure what oil prices will do. This is the factor that transforms economics from a science into an art.

E. MOUGEOTTE: Mr President, you just proposed extending the Presidentís term in office from four years to six years. Some observers, hastily perhaps, have jumped to the conclusion that this would enable Vladimir Putin to return to power as President. What would be your comment on this? Will you work right through to the end of your term in office, and is there any chance you would step down ahead of time? 

DMITRY MEDVEDEV: I am in the process of working right now. Why are you pushing me into certain decisions? I can say only one thing for sure, and that is that the new terms will benefit only whoever is elected to the office of President once the necessary amendments have entered into force.

The terms in office at the top level of power, whether for the President or the Parliament, are something that should be in the interests of developing the country. Looking at Franceís recent history, for example, we know that France gave its President a 7-year term in office, and I think this made it possible to resolve many problems at the time when the Constitution was drafted under De Gaulle. But later, French society decided that this term in office was no longer suitable and amended it accordingly. Time will tell what the results will be. We will now have to work with these terms in office. Who knows what the situation will be 30-40 years down the road.

E. MOUGEOTTE: Could you clarify once more? Once these constitutional amendments have been passed, these new terms will apply to you, or only to your successor?

DMITRY MEDVEDEV: No, under the general rules, once the Constitution has been amended, the new terms will apply only to whoever stands in the next election. The current term in office for the President is four years. 

E. MOUGEOTTE: It seems that instability remains an issue in the Russian Caucasus, and we are still seeing flare-ups of violence. Is there cause to speak of a resurgence of terrorist activity and instability in this region?

DMITRY MEDVEDEV: It is definitely too early to put our minds at rest. This goes for the situation in the Caucasus in general and the situation with terrorism in the world as a whole, because terrorism is international in nature and seeps across borders under all sorts of different slogans and accompanied by all sorts of different ideas. I cannot say therefore that the terrorist threat has been eliminated, whether in the Caucasus or in any other region.  

This is a problem we all face. This is something that Russia faced in the 1990s, when terrorism put a number of regions outside Russiaís jurisdiction and saw bandits take power there.

We succeeded in restoring constitutional order in Chechnya and calming the situation in the other republics of the North Caucasus. Similar problems arise in other parts of the world too. We need to take timely action in response. The situation is indeed not the calmest.

There was a blast in North Ossetia just recently and people were killed. An investigation is currently underway and the main version so far is that this was a terrorist attack, the aim of which was not simply to intimidate people but to create a clash between them.

We will therefore take every necessary measure and make every possible effort to maintain constitutional order there. This is why I have made a number of decisions aimed at reinforcing the situation overall, putting more vigour into development in a number of regions and bolstering the authorities in some parts of the country, including in the North Caucasus.

Terrorism and crime in general, especially in regions where things are as tense as in the Caucasus, usually increase at times when forces from outside the region start to appear.

The crisis in August showed that when the leaders in other countries Ďlet go the brakesí at some moment and are tempted to carry out aggression, this ultimately ends up destabilising the situation in the region in general. If Russia had not restored order in August, who knows what would have happened in these regions. It is very likely that even more blood would have been shed and that there would have been massive terrorist attacks aimed at splitting apart the countries in the region.

E. MOUGEOTTE: My last question is a personal one. Although you face big challenges and serious issues in your work as President, does the job bring you satisfaction as well? 

DMITRY MEDVEDEV: I can tell you quite honestly that this is very interesting work but it also comes with a great deal of responsibility. These are not just words. This really is a job where you are involved in sorting out all kinds of problems 24 hours a day.

E. MOUGEOTTE: Thank you, Mr President, for answering my questions.

DMITRY MEDVEDEV: Thank you, Mr Chief Editor.

I wish you and your publication success.

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