Good afternoon, esteemed ladies and gentlemen.

First of all, I want to offer my sincere thanks to the British Prime Minister and his spouse for the invitation. To me and my wife this is a great honor, indeed we are very glad of being at the British Prime Minister's place. It is also very interesting. I must say that this is an ancient house with its history, and Mr. Blair and his wife kindly told us some stories associated with this place.

But, of course, the main thing is that we have the opportunity in a relaxed atmosphere to exchange views not only on bilateral issues, but also on international problems of practical interest both to the British people and to the peoples of the Russian Federation.

I must confirm the assessment of my colleague: I also consider that this year was to a significant extent one of great change for the destinies of the world. We not only understood the common danger which terrorism carries with it, but also the need for a joint struggle against it, and in this context we, of course, devoted a lot of time and attention in the first talk to our cooperation in the common antiterrorist fight. Among other things, we discussed also the problems in today's situation in Afghanistan and the country's future.

In a constructive spirit Russia's discussion with NATO proceeded as well. I must say that the very idea of "20" was formulated by the Prime Minister when he was on a working visit to Russia. It was formulated at my place, so I think at his place he will think up a few more good things. Recently he came up with the initiative to bring Russia still closer to the EU. I especially want to stress the initiative of Prime Minister Blair and Mr. Berlusconi regarding Russia's entry into WTO. As to NATO, the formula suggested by the Prime Minister fully suits Russia and I think that this is one of the few possible realistic schemes for changing the quality of the Russia-NATO relationship, and even more important - this is one of the few realistic schemes for changing the situation in the world in terms of a common security system in Europe. It is important that we have agreed on a timetable for our further work and by May 2002 we are to make up our minds on the content of the new format of cooperation among the political 20. The Russian side is ready for such coordination, as I already said.

In the outgoing year Russian relations with the European Union also developed in a positive and dynamic fashion. The EU is our priority partner, and its role in this capacity, of course, must grow, this applying both to our political dialogue, security cooperation and counteraction against terrorism, and not least to trade and economic cooperation. We discussed at length themes relating to the EU's enlargement, and its implications for economic cooperation between Russia and the European Union. Of course, we paid definite attention to strategic stability too. I once again set forth Russia's approach to the ABM Treaty and our assessment of the US decision to withdraw from it. But I want to once again repeat that we are not going to overdramatize the situation and we hope that the dialogue will continue, including with our American partners. I told the Prime Minister about my conversation with the US President held recently by telephone from Moscow, and informed him that the President and I had agreed to intensify our contacts in this field through the foreign ministries at the beginning of the year. It seemed to me that our position was correctly perceived.

We also discussed a number of regional issues, the situation in the Middle East in particular. By and large our discussions covering a full range of topical international problems confirmed me in the thought that the nature of our cooperation in world affairs is fully in accord with the spirit of the relations that have evolved between Great Britain and Russia, and with the personal relationship that has developed between myself and Mr. Prime Minister.

In terms of bilateral ties we paid the main attention to the basic issues of bilateral trade and economic cooperation. I had a meeting with leaders of the Confederation of British Industry and with some representatives of big business in the UK. These companies have multibillion projects in the Russian Federation and by their activities, I do not doubt, will contribute not only to economic growth in Russia, but also to the creation of favorable, stable conditions for economic development in Europe.

Britain is one of Russia's five leading trading and investment partners. We highly value your country's help with structural and market reforms in the Russian Federation. But most convincingly of all, the economic attractiveness of Russia is demonstrated by the activity of such British giants as Shell and British Petroleum; it was just with their top leaders that I met. Their participation in joint energy projects runs, as I already said, into the billions of dollars. Their interest in the Russian market has noticeably grown of late, which maybe will soon become embodied in a series of large-scale new projects. We welcome the decision by the British government to resume guaranteeing British export credits and the insurance of investments in Russia. For our part, we could suggest using the "one window" principle in carrying out a number of agreements that we have established for the registration of entrepreneurial businesses. We are also willing to intensify our work on the subject of Production Sharing Agreements.

A reciprocal gesture could be a revision of the antidumping procedures against a number of Russian commodities and producers that are being practiced at the level of the EU.

A whole variety of important events are ahead in economic cooperation next year, culminating in a Russian Economic Forum due in London in April of 2002. It was by no chance that we chose the British capital as the site for the presentation of the Russian Federation and Russia's economy, bearing in mind not least the high level of relations that has evolved between Russia and Great Britain of late. We are grateful to the Prime Minister for the support of this undertaking, which it seems to us is opening up good prospects for mutually beneficial contacts between our countries.

And in conclusion I want to say that we are looking also to next year with hope. The reserve for growth in bilateral relations is not bad, and there are all grounds to assume that our contacts in 2002 will be developing no less intensively. I want to wish the representatives of the press - it's unlikely we can meet with so many of you yet again soon - a Merry Christmas and a Happy New Year.

Thank you very much.

Question: Mr. Prime Minister, what concern do you have about terrorists' possible actions in the English Channel, and can I ask you both to comment on the suggestion that terrorists are developing weapons of mass destruction?

Mr. Putin, what measures do you think exist for the struggle against threats of this nature?

President Putin: I wasn't aware of the incident in the English Channel and when here, just before the press conference, a British colleague told me what had happened, I jokingly said to him: "Needs better searching!" But speaking seriously, I am fully in agreement with Mr. Prime Minister that there may be no jokes here. When it concerns national security, it is necessary to act, of course, within the law, very neatly, but also energetically, in a professional manner.

And, answering the second part of your question about nuclear terrorism, I must say that, first, we have a relevant initiative within the United Nations on this issue, and advocate adopting an appropriate document which would work out rules for the combating of terrorism of this kind, and secondly, this must be one of the central themes in the joint work of the proposed Twenty within NATO. It is issues of nonproliferation of weapons of mass destruction and their delivery means, and the struggle against terrorism that are the key things, the real threats which are of concern to us all at present. This is what we suggest discussing, and I believe that if we combine our efforts, if we act together, then the effectiveness of our work will increase enormously.

Question: After you have given such high appreciation to this joint decision of working at 20 in the format of Russia-NATO, could you tell us a few words about this possible new mechanism, what will it look like?

President Putin: You know, two approaches are possible here. The first approach is to define the areas of cooperation in which Russia will take no part within NATO, and to state that in all the other questions it is to take part in a full-scale format. The second approach is to define two, three or four questions in which Russia is to participate in full, and in the rest not at all.

The first is a more serious, a more revolutionary one, but the second approach suits us just as well. I think that if we pick the questions I have already mentioned and which are of interest to all - no one challenges that - then gradually to the extent of joint work and the growth of trust in each other this list of problems for joint decision can be extended.

Russia does not seek participation in NATO in a full-scale format, does not seek influence on decision making under Article 5 of NATO's Statute, does not seek any influence on its defense policies. But there are at the same time areas of cooperation within which we can act very effectively by joining efforts. We have already said about that, and there is no point in repeating it. This approach suits Russia.

Question: Prime Minister, how surprised have you been by the extent of Russian cooperation in the wake of 11 September?

President Putin (supplementing Tony Blair's answer): I would add a few words, although the question wasn't addressed to me, but to the Prime Minister. I just want to thank the Prime Minister for recalling here the victims of terror in Moscow and other large Russian cities. Believe me, it is very important for us that those happenings are remembered and known here. More generally, no less important for us was the initiative which Mr. Prime Minister showed in his time in establishing the first contacts with the Russian leadership, and with me personally. We did not doubt that we were being heard, that there was a wish to hear us and that we were being understood. It was a very good basis that has enabled us all to build sufficiently effective joint work to neutralize the threat of international terrorism, in this particular case, in Afghanistan.

Question: What is your assessment of the situation in Afghanistan after the introduction of a contingent of British forces there?

President Putin: The introduction of an international force is being carried out on the basis of a UN decision, as has already been said here, and you know that Russia had taken an active part in preparing this decision. While working on the final version, we were quite actively engaged in consultations with members of the Afghan Interim Authority, and at the end of the day it can be said that the decision has been found that is acceptable to all. That is the first point I wanted to make.

The second point, and no less important, concerns directly Russia's interests. The interest of Russia is to have on its southern boundaries in the person of Afghanistan a friendly and neutral country which will never again allow in its territory any training bases for terrorists to be sent to our North Caucasus. In this sense the presence of an international force to maintain order and to assist the lawful government of Afghanistan is fully in line with our interests.

Question: Was the question of Chechnya raised at the talks? If not, why not? In this regard can the problem of Chechnya be viewed as simply one of terrorism?

President Putin: As far as Chechnya is concerned, I stated my view quite recently, including in an interview with British media - well, things are not as simple as they might seem and we are not going to pretend that we are dealing solely with the manifestations of terrorism in Chechnya, although a large part of the problems is created there precisely by international terrorists. This is a fact which causes no doubt and is generally acknowledged. Those still fighting there, providing the people who have not laid down their arms with money are precisely international terrorists and their sponsors. A large number of mercenaries are fighting, primarily from Arab states. Up to this day.

But there is also a part of the people who have not laid down their arms who probably cannot be assigned to this category, because they are motivated, above all, by the ideas of separatism. Although at this point in time all this is very intertwined, and in practice it is very hard to distinguish one from the other. As to the second part of the problem, that of separatism, it is well known to all that this is a problem with which not only Russia is faced, but also many other countries of the world, and Europe not in the last place.

We do not support separatism in other countries and hope that no one will support our separatists either. This would be a gross mistake for Europe, because if that happened, Europe would be plunged into an endless string of international, interethnic and inter-religious conflicts. At the same time that doesn't mean that everybody is permitted to do whatever they like, including in the domain of human rights. As to the humanitarian side of the matter, human rights, and so forth, we, I repeat it once again, are ready for close cooperation with international organizations.

I have told the Prime Minister about our plans to use all possible political means to solve the problem.

Thank you very much.


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