Fredrik Reinfeldt (via interpreter): …We discussed the environment, the Baltic and important issues concerning the Arctic. Prime Minister Putin and I had a rewarding discussion of these and other relevant issues. I would like to highlight two key points. The first one is economic collaboration and how that is connected with modernisation, in particular.

As far as the economy is concerned, trade between our countries is significantly growing. In the past ten years we have seen a 600% increase in trade, particularly, in Swedish exports. Therefore, now Sweden is one of the top ten direct investors in the Russian economy. I talked with the representatives of these companies, which included a meeting during my visit to Moscow in March 2010. Our exports range from telecommunications and retail to agriculture and forestry.

It has been a long time since the establishment of the Russian-Swedish Supervisory Committee on Trade, which plays the role of resolving various obstacles in the flow of investment.

We have just signed several commercial agreements between Swedish and Russian companies. We hope these agreements will strengthen our economic ties even more.

We have also established a Russian-Swedish business council that will be independent from our governments. It will be able to give its opinions, recommendations and suggestions regarding the growth of trade to the respective governments. We believe Russia is highly interested in this initiative and the generation of Swedish investment.

Another issue concerns Russia’s modernisation policy. Sweden welcomes this policy, and we signed a declaration of partnership in modernisation. This is very important for us because it was during the Swedish presidency in the European Union when such a declaration was signed between the European Union and Russia. Today it was signed between our countries. If I am correct we are the 13^th state to sign such a document, a declaration of modernisation. Our partnership is based on the important principles of democracy, the rule of law and human rights. All of these principles are mentioned in the declaration. The spheres of our cooperation include the environment, professional management practices, innovation and space exploration.

I hope that the agreements signed today and these areas of cooperation will promote deeper and stronger interaction between Russia and Sweden. We have also pointed out that Sweden is a country where fast economic development is combined with low environmental impact. And we hope that we will continue this discussion with Russia. Our experience shows that modern institutions and anti-corruption activities are fundamental for modernisation. I mentioned this already. This is what we discussed. Now I would like to give the floor to my counterpart, Russian Prime Minister Vladimir Putin.

Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

I am happy to meet my colleagues in Stockholm again. This is my second trip to the Swedish capital.

Sweden is an old and very important partner to Russia. We are neighbours and we are expanding contacts in many areas. We have basically covered the whole range of our trade and economic ties at one-on-one and expanded meetings today. In fact, we focused on trade and economic ties throughout the day.

Both Sweden and Russia are emerging quite confidently from a difficult period brought about by the global financial crisis and recession. This fact provides a solid basis for the development of our bilateral relations in all the important areas of cooperation. Last year's growth was 23%, although Russia is not a large energy supplier to Sweden. This means that the growth was natural and quite diversified.

Our bilateral trade totalled $6 billion, which is far from the limit, especially for Russia. Russia is Sweden's 11th largest trade partner, and our cooperation certainly has good prospects, because Swedish businesses have their traditional niches on the Russian market, including modern manufacturing industries, telecommunications, IT, energy saving and nature conservation technologies, and so on.

We have good investment opportunities, too: $2 billion accumulated Swedish investment in Russia since 1991, with half of that foreign direct investment.

It is important that, despite the economic crisis, our Swedish partners have proceeded with their projects in Russia; what's more, they are planning to boost their investment, primarily in high-tech industries, as the prime minister has said.

I am confident that the Russian-Swedish declaration on partnership for modernisation will provide forward momentum to our cooperation. We are interested in studying Sweden's experience in integrating research and production, managing technology parks and high-tech clusters.

We in Russia are making intensive efforts to move along this path, and we would very much appreciate Sweden's valuable experience in this area.

I believe we also have great opportunities for cooperation in the timber industry. Today we have signed an agreement to set up a timber plant in Russia's Krasnoyarsk Territory.

Swedish automakers are also pursuing a wise strategy on the booming Russian market. I am referring to truck maker Scania, which has opened a plant in the Leningrad Region, and Volvo, which is successfully manufacturing cars in Kaluga. We certainly expect these companies to further expand their business in Russia, also by adding local component production units.

We are interested in developing close cooperation in energy efficiency and renewable energy sources. In this context, Sweden is doing very well – its economy and GDP are growing whereas the amount of energy consumed remains the same or is growing much slower. This is a very good example of energy efficiency. We have agreed to work through our energy agencies and draft a project for a Russian-Swedish centre on innovation and energy efficiency.

Environmental protection will always be the focus of our activities. In this regard, we are going to pay special attention to cooperation in the Arctic. Both Sweden and Russia are Arctic countries. We are now resuming navigation along the Northern Sea Route in the Arctic Ocean. This is a very important transport route with good prospects for the future. It is being affected by the climate change – the navigation season is increasing all the time. Economically, it is becoming sensible to ship goods from Europe to Asia and the Pacific via this route. I am confident that Swedish companies that are active in these markets will be interested in cooperating with Russia in this part of the world.

On the whole, the Arctic is a very fragile region. Our Swedish partners have a lot of experience in environmental protection. As you know, we are increasingly focused on this issue, and we hope to cooperate with you. The Russian Geographical Society will host an event The Arctic: Territory of Dialogue in September. It will focus on the development of the transport infrastructure, and we hope that our Swedish friends will take part in it.

Naturally enough, we have discussed the important subject of the development of contact. You know that we have decided to resume tourist ferry service between St Petersburg and Stockholm and to let our partners visit our city without visas.

In conclusion I'd like to thank all the participants of the talks for a very constructive, pragmatic approach to the discussion of practically all the subjects that we touched on today. Thank you very much for your attention.

Question(via interpreter): Swedish public television. I have a question for Prime Minister Putin. Maybe I will add more to what you've called a fuss but I'd like to ask you: when will we hear whether you will run for the presidency or not? Do you think that you may take part in the elections along with President Medvedev? Thank you.

Vladimir Putin: I wasn't talking about a fuss right now – you've mentioned it. As for the presidential campaign in Russia, it is still too early to talk about it. The time will come and we'll make a decision. Don't worry – you'll like it.

Question: Good afternoon. Kommersant. I have a question for both prime ministers. Mr Putin, you said that ferry service between Stockholm and St Petersburg will resume and that Swedes will be able to spend three days in our city without visas. We always ask about a visa-free travel at such news conferences in Europe. I don't think Russia and the European Union (EU) will enact it in full in the near future. However, unilateral decisions to this effect are being made. I understand that the Russians arriving in Stockholm by the same ferry will have to present their visas. Isn't this a violation of the principle of reciprocity in international affairs and how will this problem be resolved eventually? Either Russians are allowed to travel visa free or Swedes will have to obtain visas for travel to our northern capital. Thank you.

Vladimir Putin: This is a problem indeed, and it's a violation of the principles of reciprocity. We have met Swedes halfway in the hope that our partners in Sweden and other countries will appreciate this move and reciprocate on this major issue. We do understand how difficult it is for EU countries to make such decisions. Each of the 27 countries has its own opinion, but the EU needs consensus. At the same time we have repeatedly drawn the attention of our partners in the EU that it has visa-free travel with some countries that specialists describe as being difficult to operate in or having a high crime rate, including many Latin American countries. But where is Latin America compared to Europe?

We have also spoken today about purely practical problems that Russians encounter in applying for visas. Take this ferry service, for one. If a Russian citizen, say from Siberia, the Urals or beyond, or the Far East wants to travel on this ferry to Sweden or Denmark, which we visited yesterday, or to Helsinki, he or she will first have to arrive in Moscow or St Petersburg by air or railway, obtain a visa, return home and then come back again to take the ferry. They may have to pay more for flights across Russia than for a ferry cruise to Stockholm. This is the problem. I can see that our Swedish partners understand this. This is our common task with all interested European countries – to persuade all other partners in Europe that it is time to switch to visa-free travel. As for the struggle against crime and terrorism, we should resolve this problem not with restrictions but by improving and coordinating the work of law enforcement agencies.

Fredrik Reinfeldt: The question put to us just now has already been raised by Prime Minister Putin. I’d like to point out in this regard that there’s been a noticeable rise in the number of Russian tourists visiting Sweden, especially Stockholm, in recent years. This reflects the situation in modern-day Russia, with its increasingly strong economy. We’re glad this new transport service is being launched, first as a pilot project.

There are a few migration-related issues to be settled, and we are working on them. As I said earlier, I’d applaud an agreement on temporary work-abroad schemes that would enable Swedes to work at Swedish companies in Russia.

As for lifting visa requirements, we’re an EU nation and a signatory to the Schengen Treaty with no internal border control, meaning that we may not enter into any other bilateral agreements.

My hope, however, is that we’ll eventually settle our migration issues, for I personally believe in openness and in people’s right to move freely.

Admittedly, we’ve got quite a long way to go because, as Mr Putin said, there is the problem of criminality here. This problem exists on both sides of the border – I’d like to emphasise it – both in Russia and in the European Union. That’s how I’d answer this question.

Question (via interpreter): I have a question for Prime Minister Putin. Sweden is not a NATO member, yet it’s involved in the operation in Libya. What kind of consequences do you think this may have for Sweden’s neighbours?

Vladimir Putin: I’ll comment on the Libya operation in a short while. But let me begin by saying that the expansion of NATO infrastructure towards our borders cannot but raise concerns in the Russian Federation. NATO isn’t a purely political bloc; it is a military-political alliance, whose charter still carries clauses concerning its responses to outside challenges. This is a defence organisation, in fact. And when military infrastructure like NATO’s approaches another country’s national borders, that country should respond accordingly.

As for Sweden’s involvement in the Libya operation, that’s a choice every country should make independently. This question has been put to me on more than one occasion, you know.

I’d like to take a minute of your time to tell you a story. It is no secret I was a KGB officer back in the Soviet era, when the country was waging a war in Afghanistan. I had a friend who served there. In fact, I had a lot of friends serving there, but this one was the senior intelligence advisor in Herat. Once, when he came home on leave, I asked, “What’s the situation there like, Sasha?”

Patriotic feelings were running high in those days, you know. We were convinced we were doing the right thing in Afghanistan. But here’s how my friend answered: “No missile strike can go ahead without my authorisation. And every order I refuse to sign I count as a personal achievement.”

I was really shocked to hear him, a fellow KGB officer, say such a thing, at that time. So I asked him to explain. And he said: “Do you have any idea of how many civilians are killed in missile strikes, whatever the motive behind them?”

Sometimes, when I look at what’s going on in today’s world, I’m struck by how lightly decisions are taken on the use of military force in international affairs, and this despite all that preoccupation that the civilised world allegedly has about human rights.

Don’t you think there’s a serious contradiction between what is said and what is actually done, between words and deeds in international relations? We must do all we can to redress this imbalance.

Question: Mr Putin, let me bring you back to our bilateral relations. Documents signed today include a declaration on modernisation, a proposal on the launch of Swedish and other satellites with the help of Russian rockets, and collaborative GLONASS projects. In what other areas do you think cooperation could bear fruit, and to what extent?

Vladimir Putin: Every one of the sectors we discussed with Mr Reinfeldt today is important. There are real individuals and real economic interests behind each. Specifically, we considered cooperation in the timber industry and signed a contract for the construction of a large processing plant in the Krasnoyarsk Territory. Isn’t this an important undertaking?

We are thoroughly mindful of our Swedish partners’ concern over our plans to raise customs duties on timber exports. But I hope they understand our need to encourage domestic processing. We’ll be advancing in this area step by step.

We spoke about the Japan disaster earlier today. In Russia, nuclear power accounts for some 16% of the total electricity output. In Sweden, this percentage is almost twice as high.

We spoke about the possibility and the need to expand our cooperation on increasing the safety of nuclear power stations. Russia gained vast experience in this area following the Chernobyl disaster. And I believe that our technology, modern Russian technology for nuclear power safety is the best in the world. In fact, I’m not the only who thinks that. The IAEA holds the same view. Its inspectors have found very little to criticise us for – very little or virtually nothing in terms of safety.

We supply nuclear fuel to Sweden and could consider collaborative projects on nuclear waste disposal. We already cooperate in the aerospace industry, which you mentioned, and, indeed, we have excellent opportunities for merging our projects and boosting the effectiveness of our efforts.

Yes, we’ve launched two satellites together already, but this is not the most important thing here. The point is, given that we are cooperating on GLONASS, Swedish enterprises, whose excellence in a whole range of sectors is recognised worldwide, could take an active part in the construction of terrestrial infrastructure, which we badly need. And, obviously, through this we could make real progress in this high-tech area.

We’ve got lots of other concrete tasks to carry out together. We are close neighbours, after all.

Do you know our current road haulage figures and the rate at which freight transport is growing? In this field, too, we’re keen to see our cooperation develop harmoniously.

Mr Reinfeldt spoke to me about the need we have to consolidate our legal system. I agree that we still have a long way to go in this area. Controversies arise every so often. Which is only natural because the greater the scale of economic activity, the higher the number of disputes, obviously. We’d like our legal system to work effectively and reliably and to be able to really protect the rights of investors, Russian and foreign alike. And of course, we expect the same kind of attitude towards our investors abroad, including here, in Sweden.

There are lots of issues to address and it would be hard to single out one absolute priority. Economic modernisation and the advancement of high-tech industries have now come to the fore, so this is what we will now be concentrating our energies on.

Question (via interpreter): Why isn’t Russia part of the EU?

Vladimir Putin: That’s a crucial issue, I think, one of the most important ones. I beg the pardon of Mr Prime Minister; we’ve already discussed the possibility of building an economic community that would stretch from Lisbon all the way to the Russian Far East. Over the years, Russia has invested a great deal in the development of its vast territory, which is so rich in natural resources. We’re now willing to follow up on that work in closest cooperation with European partners. There are many technology-related issues to be resolved, but no doubt cooperation and integration are indispensable to building a bright future for Russia and the European Union alike. We should only establish an appropriate pace and the modes of such cooperation. Believe me, Russia is ready for close cooperation in this way. Thank you for the question. Thank you very much.