Transcript of the news conference:

Francois Fillon (via interpreter): Ladies and gentlemen,

First of all, I'd like to tell the Russian and French journalists here what I told Mr Putin at our bilateral meeting several minutes ago: that we were very sorry to hear about yesterday's plane crash in Russia, which claimed 44 lives. I have already expressed my condolences to Mr Putin and asked him to convey them to the families of the dead.

France and Russia have deepened their relations over the past four years. Yesterday evening and this morning we acknowledged that most of the projects we have spoken about over the last four years have been brought to fruition or will be in the near future.

We have also expanded our economic ties. Trade has returned to its pre-crisis level and grown by 30% in just one year.

Our official year of cultural exchange continues to be met with greater intercourse between our leaders: Mr Medvedev has recently visited Deauville; Mr Juppe (Alain Juppe – foreign minister of France) and Mr Mitterrand (Frederic Mitterrand – Minister of Culture and Communication of France) are about to visit Russia, and Mr Putin and I will soon attend an annual intergovernmental seminar.

The Exchange Year is still underway thanks to the establishment of the French-Russian Cinema Academy, and the French-Russian language and culture season scheduled for 2012.

We have many symbolic projects. I'm thinking of the sale of the first two Mistral helicopter-carriers. This is a strategic step that serves as testimony to the fact that Russia and France have left the Cold War behind and now enjoy strategic relations, as well as a shared effort to create a common economic space between Europe and Russia. I'm also thinking of the launch of the first Soyuz in Guiana next October and the construction of a motorway between Moscow and St Petersburg by the French company Vinci.

We are also rapidly developing other exchanges. Our goal after the crisis is to modernise the economy, and France will undoubtedly support Russia in this field of activity as well as in the sphere of innovation (Skolkovo, in particular), finance (we are taking part in developing a financial platform in Moscow), and energy efficiency. Last December, we spoke about the establishment of a bilateral energy efficiency centre, and it is now already operating.

France is Russia's fifth largest investor and supplier. We would like to develop very close cooperation in industry. Today, Mr Putin will visit Le Bourget. We are currently launching many new cooperative projects in Le Bourget. There, we'll see the Superjet-100, in which French companies took a 30% stake. We'll also see the Be-200, an amphibious aircraft that out company will test this summer. It has very good prospects.

We have also discussed other economic projects that we are closely following, such as the Stockman deposit and a high-speed rail between Moscow and St Petersburg. We have spoken about new projects in healthcare and agriculture that we'd like to start in December. We have made impressive headway in these fields of late. The first conference on healthcare will take place in Moscow in 15 days, and our agricultural ministers will meet in Paris. The latter's relations will have a direct impact on the success of their plans.

Mr Sarkozy and Mr Medvedev have decided to work together on a tourism project in the North Caucasus. This is a very positive step – the construction of infrastructure facilities will become a subject of new agreements between French and Russian companies. We'll also discuss international and European issues during our working lunch. As for the European issues, I've again assured Mr Putin of our support for Russia's accession to the WTO before the end of this year. I've also told him that France is doing all it can to promote a visa-free regime between Europe and Russia.

Moreover, we have touched upon energy issues, particularly the development of the Nord Stream, in which French companies will take an active part, and of the South Stream, which is the subject of current negotiations.

We have also discussed cooperation in nuclear power engineering following the accident at the Fukushima nuclear plant. France and Russia have large projects in nuclear power engineering, and we want to make sure that this industry has a future.

Along with Mr Putin, I was very pleased to unveil the monument to Russian soldiers who lost their lives fighting in France during World War I. This initiative belongs to Frederic Mitterrand. He once spoke about this by the fireplace here in Matignon on a very rainy and gloomy day, and the monument was unveiled 18 months later. I think it is a very powerful symbol of our excellent bilateral relations. Thank you.

Vladimir Putin: Thank you.

Mr Prime Minister, ladies and gentlemen,

I'm very grateful to my French colleagues, particularly the prime minister, for the warm and friendly reception that we are now accustomed to receiving from our French colleagues and for the open and constructive dialogue that we have developed over the past few years and are here to continue today. Yesterday, we had an opportunity to discuss our bilateral ties in a more informal atmosphere, and we have continued pursuing this discussion today. Mr Fillon and I have discussed topical issues of our relations in practically all fields and have outlined various avenues for more diverse cooperation in the future. I'd like to emphasise that France is Russia's priority and strategic partner in the full sense of this word. These words are not concessions to diplomatic protocol or convention – they reflect the true character and content of our relations.

Our common achievement is the development of mechanisms for direct dialogue between governments, the businesses, and the public. Needless to say, during the negotiations, we focused on the issues of trade and economic cooperation. Russia and France managed to reach pre-crisis trade levels with considerable speed, as Mr Fillon has already mentioned. Our trade increased by 30%-31% last year – and continued to grow steadily in the first quarter of 2011.

French business is increasing its investment in the Russian economy. Its total investments amount to around $10 billion, one-third of which is being directly invested into highly efficient production lines and the introduction of modern technology.

I think another important trend is also obvious. Apart from improving trade, we are developing full-scale industrial cooperation and implementing science-intensive innovation projects that facilitate and enrich our economic cooperation.

In particular, we are applying our respective strengths and specific advantages in such promising spheres as space-related research and aircraft engineering. I hope that the first missile will be launched from Kourou in French Guiana this autumn without any delays. The launch system is ready and the only question now is which spacecraft to launch. Initially, the project provided for French military satellites, but now our partners suggest launching satellites for the European global navigation satellite system (GNSS) Galileo. In this manner, we are aware that we will be abetting a rival to our own GLONASS system, but a bargain is a bargain, and if we agreed to see it through, then we'll keep our promise. We must now begin intensive preparations for this event.

But we do not intend to stop there. We are going further and considering prospects for space cooperation, a vital sphere for us both. We are working on the promising and large-scale Ural programme, which will be put into effect after 2020. The programme envisages the development of new launch systems, including for manned spacecraft.

We also continue to cooperate in aircraft engineering. We have two promising projects in this field. We've practically completed one of them – the Sukhoi Superjet-100. Some 30% of its components are of French manufacture. Now, as we've just discussed, we are considering how best to promote this product in French markets and in the rest of the world. We also have a very good project on the MS-21 medium-haul aircraft.

We are working at a steady pace in the automotive and other machine-building industries. AvtoVAZ and Renault are building a common technological platform for a broad range of car models. The recently established Peugeot Citroën factory in the Kaluga Region will reach its design capacity in 2012 and produce up to 150,000 cars per year. The French company, Alstom, is also making long-term investment in our machine-building sector.

Our traditionally strong energy partnership is acquiring new dimensions. I'm referring to cooperation in energy efficient technology. Inter RAO UES and Electricité de France are working on very interesting projects and making offers to a number of industrial enterprises in Russia.

French companies are actively joining the strategic, essentially European projects that Mr Fillon has just mentioned, such as Nord Stream. Our French partners are involved in this project, and its maritime section has already been completed. We have laid the first leg of the pipeline along the Baltic Sea bed and are now discussing how to fill it with service gas. Consumers will receive the first gas in October-November in the amount of 27 billion cubic metres. We'll then bring the pipeline to its registered capacity of up to 55 billion cubic meters. We'll continue working with our French partners on the South Stream as well, which entails laying pipeline on the Black Sea bed. Participants in this project are interested in developing oil and gas deposits in Russia. For our part, we are open to such broad energy cooperation.

Historically, our bilateral cooperation has always been a positive factor in European and world affairs. Let me add that it has always rested on the approval of our people and our civil societies. We rightly take pride in our rich tradition of humanitarian, cultural, scientific, creative, and simply human contacts, and we are committed to continue pursuing them in the future. Needless to say, today we have also spoken about further progress towards a visa-free regime between Russia and Europe and easing bilateral visa procedures in line with current international standards, and this can be done.

Such large-scale projects as the Year of Russia in France and the Year of France in Russia have captured the interest of our people. A new initiative will start next year: the Season of Russian in France and the Season of French in Russia. Such undertakings help us to understand each other better and cherish our common history.

As you know, today, Mr Fillon and I unveiled the monument to the Soldiers of the Russian Expeditionary Force that fought side-by-side with French soldiers during World War I. We are grateful to the French nation for paying tribute to the heroism of Russian soldiers. This monument is a powerful symbol. It reminds us of the need to be responsible to our common past, which should always unite rather than divide nations.

In conclusion, I'd like to say that we are very pleased with the spirit of these talks and with the results that we are achieving in our cooperation. Thank you very much for your attention.

Question: Messieurs Prime Ministers, have you discussed any of the problems facing the eurozone? Does the Russian government see Greece’s financial crisis as disconcerting news? Will it affect the development of Russia’s relations with France and with the European Union at large?

Given Ms Lagarde’s presence here, I also wonder if you’ve discussed France’s nominee for the position of IMF Director?

François Fillon (via interpreter): I’ll let Mr Putin address the question on Ms Lagarde.

As for the eurozone, I’d like to point out that since the economic crisis began, Europe has been demonstrating its capacity to effectively respond and to act in solidarity. So, little by little, we’ve developed new mechanisms for dealing with the crisis. This has been quite challenging at times, but we’ve unfailingly come up with solutions.  We’ve managed to successfully deal with the crises in Portugal and Ireland and now we have that crisis in Greece to resolve. We’ve already provided substantial bailout aid to Greece and will continue supporting it. But to be able to do that, we need to make sure that the Greek government’s current efforts to remedy its public finances and enhance the competitiveness of local companies are sustained. This is what will enable the country to get out of the crisis.

A new batch of aid from the IMF and EU is coming in July. It will arrive after the Greek parliament adopts a new package of fiscal measures. I’d like to point out here that as Greece is going through this critical period, all of the country’s political forces are taking a responsible approach.

Vladimir Putin: The Greek crisis is not directly related to Russia or to Russian-French relations. But, of course, Russia, like any other country of the European continent, is closely watching the developments there, and hopes to see that crisis resolved as soon as possible. Hopefully, our European counterparts will be able to find a solution acceptable both to Greece and to the leading EU economies, which are its key aid donors. Greece, the European Union and Russia all want the crisis resolved as soon as possible. I’m sure a way out will be found before long, as no one is interested in seeing the situation get worse.

As for France’s candidate for IMF Director, Ms Lagarde is well known and held in high esteem in Russia, both as a person and as a professional.  No doubt, she could make a modern and competent IMF leader. So let’s just wait for a final decision.

Question (via interpreter): A question to Mr Putin. Why does Russia continue to oppose all UN Security Council resolutions on Syria? How are you planning to address the situation there, which gets worse with every passing day, while some of Syria’s neighbours continue to support the Assad regime as a guarantor of stability?

Vladimir Putin: Russia is well aware of the fact that political instruments invented some forty years ago are no longer relevant today. This is true in all countries, including Syria.  I hope the Syrian leadership realises this, and will make the appropriate conclusions. We deem it inexpedient to interfere in the domestic affairs of a sovereign state. Developments in some of the region’s countries show that our attempts to step in do not necessarily improve the situation. All the more so since we only have a very vague idea of what is actually happening on the ground. [Addressing the journalist] Do you personally know the alignment of forces in the opposition camp? Who is seeking what?  What are the objectives of each of the constituent groups?

Of course, pressure should be brought to bear on the leadership of any country that becomes a scene of massive unrest or bloodshed. What we should do is have them use diplomacy rather than violence, which bears the risk of loss of life.

As for Syria, it is on the UN’s current agenda, and our experts are working on the issue in close cooperation with counterparts from other countries.

François Fillon (via interpreter): Let me make a short comment even if the question wasn’t addressed to me. Mr Juppe and I will take up the topic during our luncheon with Mr Putin. We’re really worried about Syria. We have a clear-cut stance on this issue and would like to act in accordance with international law. It’s time the Security Council had its say. We all ought to come forward and do our bit because inaction is not an answer. We may share objectives, if not approaches.

Vladimir Putin: If I may just come in here… It’s argued that Russia has a special relationship with Syria. This used to be the case in the Soviet era. But not any more. Syria’s current relationship with France is special, though, if only in terms of bilateral trade and summit meetings.

As for Russia, it has no special interests to protect in Syria –  no military bases, no ambitious projects, no multibillion investments. Our sole concern is about developing mechanisms that would lead to reconciliation rather than exacerbation. Mechanisms that wouldn’t increase the loss of life any further, but would reduce casualties to a minimum and help communities find peaceful solutions to their internal conflicts – mechanisms that would bring in more democracy and freedom, with all due respect for local cultures and political experience. It should all be about assistance, not intervention. Foreign intervention isn’t much of a help in conflict resolution, you know...

Look what’s happening in Iraq. No reconciliation has been achieved there yet. True, they had a callous regime (under Saddam). But there were no extremists, no militants operating in the country in those days. And now Iraq is flooded by extremists. So, obviously, the situation hasn’t changed for the better.

There are plenty of other examples like that. But I cannot cite them all here.

You see, the idea is not to cover things up, but to find efficient solutions. And we’ll try to do just that –  in collaboration with our French counterparts.

Question: Mr Fillon, you said that French investors rank fifth. But what prevents them from coming to the fore? What do they complain about? Do you communicate their complaints to Prime Minister Putin? If you don’t, go ahead, do it now. 

And a question to you, Mr Putin. At the recent Economic Forum in St Petersburg, President Medvedev made a rather libertarian speech, calling for smaller government, broader privatisation, drastic judiciary reform, and so forth. Is that your programme as well as his? Thanks you.

Vladimir Putin: If you just look at my recent or not-so-recent speeches, you’ll see similar ideas. I’ve repeatedly pointed out that state capitalism is not what we seek.

We’ve been facing that allegation ever since we set up several state-run corporations. But, as I said more than once before, the idea behind that move was not to augment property in state ownership, but to consolidate separate assets through their integration and increased market value.

During the recent economic crisis, which hit Russia as badly as other countries, many of our large private companies offered their assets to the government to buy out. But instead of nationalising those assets, we found some alternative measures to help the private sector. And we’re determined to stick to that line in the future.

As for Russia’s development programme through the year 2020, it’s a programme  on which President Medvedev and I agree. Mr Medvedev was absolutely right in bringing this fact to the attention of the public and the business community in Russia and abroad.

Remark: (What about) the judiciary reform?

Vladimir Putin: Reform of Russia’s judicial system is part of that programme. In reforming our court system, though, we should be extremely cautious. It does need to be improved, but that’s true of almost any country’s court system, as well as of the penitentiary system.

If you look at reports of international human rights organisations, you may be surprised to find quite a few European countries among those criticised for not doing enough to improve their respective penitentiary systems.

It’s highly important to improve the situation with the courts of arbitration, I think. Unfortunately, we have a lot of overlapping between the courts of arbitration and those of general jurisdiction. We should find a way to eliminate this from our court practices.

Admittedly, in today’s Russia many of the court decisions are not executed or are executed in a distorted way.

There are lots of problems to be resolved in this area, and we’ll be working to fix them.

François Fillon: I’d like to add that we’ve seen progress in Russia’s business climate in the last four years. This arises from French companies’ growing presence in the Russian market and their real-life cooperation with Russian partners.

Peugeot and Citroen are building an automotive plant in Russia, Renault and AvtoVAZ are expanding joint operations, Total and EDF are raising their profile in the Russian market, and Alstom is gaining a foothold.

We have collaborative projects in the aerospace industry and elsewhere. Moving step by step, we’ll make headway.

France and Russia are two powers. France should also enhance its competitiveness, and Ms Lagarde and I have been working toward that goal for four years now. When we met Mr Putin for the first time, there were quite a few controversies between French and Russian companies. During our conversation today, we didn’t find any such issue.

Question (via interpreter): In an interview with the British press, Mr Medvedev said he wouldn’t challenge you, Mr Putin, in the next presidential elections. Will you run in 2012? When will you make a final decision on that? Why’s there so much uncertainty?

Vladimir Putin: We’ll have parliamentary elections in December this year and a presidential election next March. Let me assure you that both votes will be held in strict compliance with the Russian Constitution.

In both instances, the public will be the main protagonist, not the candidates. It is Russian voters who will choose a head of state and legislators (to govern the country for the next few years).

But whatever the new lineup, our country’s leadership will continue efforts for the advancement of the country’s relations with France as all of Russia’s political forces are keen to see Russian-French relations develop further.