Transcript of the beginning of the news conference:

Vladimir Putin: Good afternoon, colleagues. Today we met for talks with Belarusian Prime Minister Mikhail Myasnikovich. This has been Mr Myasnikovich’s first visit to Russia as prime minister.

On this occasion, I would like to congratulate you on your appointment once again and wish you success.

Mikhail Myasnikovich: Thank you.

Vladimir Putin: Russia hopes to establish a constructive dialogue and advance a mutually beneficial partnership with Belarus, as well as continue to carry on with meaningful work within the Union State framework.

At the meeting, we focused on issues of trade and economic partnership and the promotion of large joint projects. I am referring primarily to the launch of the Common Economic Space between Russia, Belarus and Kazakhstan. We see this as an absolute priority, and we have high expectations for this large-scale project which will open up additional opportunities for the two countries’ economies, boost their competitiveness and encourage two-way flow of investment, technology and products.

We, along with our partners, are well aware that establishing a strong regional market will prove to be a real factor in our countries’ growth and development. This has already been proved by our experiences within the Customs Union. This is exactly why we have made the consolidated decision to step up efforts towards a new level of integration and bolster the preparations for launching the Common Economic Space. We are satisfied to see that Belarus has ratified the package of documents that forms the legal base for the Customs Union. Russia and Kazakhstan are working intensively towards this end as well, and we intend to have this completed in the near future.

The establishment of the Customs Union should be backed by the active development of Russian-Belarusian trade and economic ties. In 2010, we saw an 18% increase in trade, and we will try to maintain this positive trend this year. Expanding industrial cooperation and creating favourable conditions for trade and interregional partnership have been a focus of our attention as well.

We will also strive to encourage work in the high-tech sector, in the fuel and energy sector for instance. I am referring to our plans to build a nuclear power station in Belarus.

I would like to mention the situation in the fuel and energy sector in particular, including the issue of Russian oil deliveries to Belarus. In this regard, we have established an ongoing dialogue. We expect that any issues arising in the sector will be settled in a constructive manner, with due consideration of the interests that the two countries’ businesses may have.

In conclusion, I’d like to reiterate that I am very pleased with the outcome of our meeting today. Mr Myasnikovich and I have agreed to maintain close contact.

Thank you very much.

Mikhail Myasnikovich: Thank you. Mr Prime Minister, ladies and gentlemen. This is my first foreign visit as prime minister of Belarus. Not surprisingly, the visit is to the Russian Federation. The Russian Federation has been and I am sure will remain a strategic partner for Belarus. It is remarkable that our cooperation is so multifaceted and has been growing steadily. Trade is growing, new projects are on the rise, and today we discussed with Mr Putin the Customs Union and the Common Economic Space of Belarus, Russia and Kazakhstan. We have ratified all the documents pertaining to the issue and have carried out all the requisite state procedures. As was agreed today, the Russian Federation will make similar decisions shortly.

The main goal is to have the Common Economic Space fully functioning in our three states beginning from January 1, 2012. Mutual benefits are important.

But what is most important – and I discussed it today with Mr Putin – is that a level playing field is being created for our business entities, for our people, and that is a truly common economic space, the centre of power that is being created in the interests of our states.

The relevant issues have been discussed. I am very pleased with the results and with the fact that we did not confine ourselves to the standard problems that had already been discussed so much, and that we spoke of the need to pursue new areas, set up joint companies and corporations which may also involve third countries.

Following the talks with Vladimir Putin, instructions have been issued to deputy prime ministers and ministers to finalise in the near future the practical issues that have to do with the fuel and energy sector, which figured prominently in our discussion. I appreciate the constructive and focused orders that Mr Putin gave to settle the various situations that remain unresolved as of today.

It is good that we have reached an agreement on the nuclear power station. Sergei Kiriyenko (Director General of Rosatom) will arrive in our country soon at the head of a large team to discuss the practicalities.

We have agreed – and I would like to thank Mr Putin for this – to hold a meeting of the Council of Ministers of the Union State in the first quarter. Indeed, many problems have piled up that need to be discussed and resolved in order to get off to a good start in 2011. We must continue to push forward.

I think there are some very interesting high-tech projects lying ahead. We have also discussed the problems related to innovative projects, including Skolkovo, Rosnanotech and many others.

I would like to thank you, Mr Putin, and Igor Sechin, who was been actively involved in this, as well as the finance minister and other officials who tackled the issues with a commitment to improving our mutual trade and mutual relations. Thank you very much.

Vladimir Putin: Thank you.

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Question: I have a question for both prime ministers. You mentioned in passing that cooperation in the fuel and energy sector was one of the topics of discussion. Could you be more specific as to the discrepancies that apparently still remain over Russian oil supplies to Belarus and the situation with the supply of Russian gas?

And if I may, Mr Putin, a question for you. Reports have just come in that the European Parliament has passed a tough resolution on Belarus. We know that one of the issues is the detention of Russian nationals. Was this question raised during the meeting with the prime minister? Perhaps you can tell us whether the Russian parliament is preparing some kind of response to Belarus? Thank you.

Vladimir Putin: As regards oil and gas, Russia has restated its position that gas will be supplied to Belarus under the current contract, which remains in effect until the end of this year. We are ready to start negotiations on the terms of gas supplies to Belarus in 2012 and beyond. This year, the contract will be fulfilled. However, we have agreed that if the need arises (and I stress, if the need arises) we would think about state support measures that Russia could take to make these supplies less burdensome for businesses and for the budget of the Republic of Belarus. That is as far as gas is concerned.

Now about oil. Under the agreements reached while working on the Common Economic Space, the Russian government has assumed an obligation to lift all export duties on crude oil once this package of documents is signed and ratified. The Russian government has kept all its promises and fulfilled all its obligations. We have cancelled all customs duties on crude oil. We have certain arrangements – and I am now speaking straightforwardly – through which we will try to ensure that the amount of subsidies to the Belarusian economy, to the oil sector, is not less that the amount Belarus received in 2007-2009 before the oil export duties were introduced. That amount is 4.12 billion US dollars. There are some questions regarding payments, but we have reaffirmed our position. We will reach agreement on this issue and will have these parameters soon. The Belarusian economy will get a subsidy of no less than 4.12 billion US dollars on account of cheap Russian oil supplies.

Now for your second question. We did not discuss this issue, we concentrated on economic matters. But you have anticipated the topic of our one-on-one meeting, which will take place after this news conference.

I met with the leaders of the United Russia party the day before yesterday and they asked me this question. The question of what the Russian government intends to do to secure the release of the Russian citizens detained in Belarus. I will discuss this with my Belarusian counterpart right after this news conference. But, to the best of my knowledge, the Russian parliament is not going to make any statements, pass any resolutions or any other documents whatsoever.

Mikhail Myasnikovich: Thank you. First, the gas issue. There are formulas for this and a schedule lasting until 2015 of moving towards prices that yield equal revenues. We discussed the details of how to move towards 2015. We have also agreed and come close to completing the formula of how to deal with the payment problem. I think that the support the Russian Federation renders will help the Belarusian economy to remain competitive. As regards oil matters, I have nothing to add. We should now proceed from this amount to determine how these issues will be handled and in which sectors, whether through prices or some other mechanisms. Yes, this agreement springs from the decisions made by the presidents and heads of government in December 2010, and that commitment remains in place. As for your other question, we will discuss it one-on-one.

Question: You mentioned some more or less specific agreements regarding the nuclear station. We were told earlier that the Belarusian nuclear station, the first reactor, was due to be launched in 2016, and the second in 2018. So time is short. Is the time left enough to implement such a massive project? And a question for Mikhail Myasnikovich. How important will this project be for your country’s energy security? Thank you.

Mikhail Myasnikovich: We have discussed this issue in a thorough and scrupulous manner. I think the framework agreement on building a nuclear station in Belarus will be signed in the first quarter of this year. We have found the approaches to the issue: it will not be just another declaration, but we will decide on the cost, the way the cost will be determined and the timetable for construction.

We also discussed ways in which Belarusian organisations and enterprises could actively participate in this project. I am pleased to note that there is complete understanding that the Belarusians, to the extent they can do it, will be actively involved in this project. This is indeed very good for the country’s economy.

The Belarusian nuclear station will generate 27-28% of the current installed capacity of the Belarusian power grid. This is about energy, and in a certain sense national security. The project remains on the agenda; it is one of the key projects in our plans, and I am optimistic about it.

Vladimir Putin: I share the position of Mr Myasnikovich. We are aware that it is a very important project for Belarus. It increases its energy independence and even creates additional export potential. Russia is ready to implement this project. It is an ambitious project, costing up to $6 billion. And we are ready to secure a loan.

The problem is determining the cost. But we have made substantial progress on the issue. I mean, construction of the Baltic Nuclear Station has begun in Kaliningrad. And our Belarusian partners can easily drive or take a train across the border to see what they are doing in Kaliningrad, take a look at the cost estimates and be sure that they have been presented with fair figures.

Speaking about the amount of work that the Belarusian side could do, as Mr Myasnikovich has mentioned, that amount is quite considerable: 30%, 35% perhaps even 40%. We are looking of course at general construction work and areas of activity where our Belarusian partners are unquestionably qualified, not only in the view of Belarusians, but also in the opinion of international experts.

Thank you.

Mikhail Myasnikovich: Thank you.