Transcript of the beginning of the meeting:

Dmitry Medvedev: Mr Dačić, colleagues. Please accept my warm welcome to Moscow, Russia.

We are indeed special and privileged partners. However, partnership implies not only phone conversations or written communication but also meeting in person. We have prepared a substantial package of documents to sign in order to strengthen the partnership between our countries. This partnership is based on a long history of relations and mutual understanding between our peoples. However, it should also be an efficient, mutually beneficial and modern partnership.

I’m glad to see you and your delegation here.

Ivica Dačić (via interpreter):  Mr Medvedev, I’m glad that after more than five years the Serbian Prime Minister is once again visiting his Russian counterpart.

Our peoples are friends. The Serbian people are very grateful for the support your country has given us. The Serbian government, senior officials and the President of Serbia are striving to strengthen our relationship, bring our countries closer and promote our mutual interests.

I’m glad to have an opportunity to sign a number of joint agreements, including an agreement on issuing a $500-million loan to replenish the Serbian budget.

I can also confirm that our efforts to implement all the previous agreements, in particular energy deals related to the development of the oil industry in Serbia and preparations for the construction of the South Stream, have had a positive impact on the Serbian economy.

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Joint press conference by Dmitry Medvedev and Ivica Dacic

Transcript:

Dmitry Medvedev: Colleagues, media representatives… First of all, I would like to report that our delegations and, of course, my colleague, Mr. Ivica Dacic, and I have had sound discussions on all issues concerning Russian-Serbian relations. I will not mention obvious facts as regards our historical and cultural ties, although, of course, the friendship between our two peoples always has been and will be important for the development of relations between our countries.

We have just signed important documents in all areas of cooperation, ranging from trade and economic to financial and humanitarian issues. We have signed a loan agreement. Serbia has always been one of Russia’s key partners. Despite differences in economic trends, we must make our best efforts to bring our trade cooperation back to pre-crisis levels. This is quite feasible, and the prerequisites for this are all in place. Our trade volumes are already up this year. Most importantly, we should make the proper decisions to consolidate existing trends.

In addition to trade, it is extremely important to expand our investment ties and to increase the number of our joint investment projects – that is what we covered today as well. With regard to investment projects, energy projects are of paramount importance, at least for now, including the flagship South Stream project.

We’ll soon get down to work. Serbia is adopting the required regulations to this end. For us this project is instrumental in diversifying gas transportation routes to Europe.

We’ll work in other areas as well. Today we’ve discussed the prospects of cooperation in industry and other areas that are of interest to our countries.

It is difficult to single out a particular contract out of what we’ve signed today. I’ll merely say that we continue humanitarian cooperation. Thus, we’ve just signed a joint action plan to 2015 on the centre in the city of Nis.

To sum up, we have very good potential for developing our ties in all areas. Now we must focus on practical work because for those who deal with practical policy the main goal is to implement the agreements that are produced by large inter-governmental or inter-state meetings. We have all the conditions needed to do this and I’d like to thank our Serbian friends for their hard work. Now I’ll give the floor to my Serbian counterpart. Go ahead, please.

Ivica Dacic (via interpreter): Thank you very much. I’ll speak Serbian. To start with, I’m happy to be here as the Prime Minister of Serbia for the first time. This is the first visit of a Serbian prime minister to Moscow in more than five years. Despite our friendly relations, we don’t meet as often as we’d like to meet in the future. I’d like our relations to be closer because we consider Russia one of our most important friends.

I’d like to emphasise once again that our centuries-long friendship should facilitate practical cooperation in the political, economic and all other spheres.

I’d like to thank the Russian Federation for its consistent support for Serbia on the issue of Kosovo and Metohija and for its principled position in the United Nations – probably the last organisation where Serbia has not yet lost its battle for Kosovo and can still win it. We’ll continue coordinating our actions with Russia’s representatives. We are still having a hard time and our accession to the European Union continues to be tied up to the issue of Kosovo and Metohija.

We are developing joint economic projects. I’m very pleased that we’ve launched them in the oil industry. Construction of South Stream will start in December – the section of it that will pass through Serbia and cost 1.7 billion Euros.

Russia made one proposal that I consider very helpful – Serbia’s proportional investment in the construction of its South Stream section… it has been proposed that Russia should fully fund this construction, and that Serbia should reimburse it from the tariffs that it would receive for gas transit via its territory. This proposal is very appropriate. It takes into account the fact that for Serbia this is a huge sum and will guarantee unhindered implementation of the project.

We are interested in more intensive economic relations. We think we should expand our trade from its current two billion euros a year. We believe there is large potential for expanding trade in agricultural products and some other areas. Naturally, Serbian apples must be pesticide-free. We were persuading our minister of agriculture to eat a Serbian apple.

Dmitry Medvedev: That’s right.

Ivica Dacic (via interpreter): So, I think the problems are resolved.

I think that apart from developing political and historical ties, we can significantly upgrade our economic cooperation and not only in energy supplies but also in agriculture, infrastructure, telecommunications, and the banking and financial sphere. We encourage your banks to work on our market, primarily the Central Bank, and the eventual formation of investment funds with VTB.

We’ve signed today a three-year agreement on further developing the humanitarian relief centre for dealing with emergencies in the city of Nis. I think this is very important. The initiative came from former Emergencies Minister Sergei Shoigu and from me. Today Mr Shoigu and I discussed military and military-technical bilateral cooperation, in particular, certain military industrial projects. We want to upgrade our army and it should be able to purchase modern equipment without creating any threat to anyone.

It is vital for Russia and Serbia to keep their relations open and friendly. The members of our Government, including myself as Prime Minister, will do all we can to develop them further. I think Serbia will continue to strive to join the EU but we should never forget that Russia and Russian people are our best friends. Thank you (in Russian).

Question: Mr Medvedev, you have noted the importance of investment cooperation with Serbia and the growing potential here. Could the European economic recession affect this cooperation? How do you rate the investment potential of Serbia and the Balkan region?

And one more question. Much has been said on the South Stream. What do you think about the Serbian proposals that we have just heard?

Dmitry Medvedev: So far neither Serbia, nor Russia are EU members, therefore this recession does not affect us. However, it puts a strain on global finance and the global economy. Our friends in Serbia are growing at over 2% a year, which they don’t like very much. We hope for over 3%, which we won’t like either. And still this is growth and not recession as in the European Union – the situation is bad there. Therefore, given the conditions it is necessary to create new investment projects and seek out new sources of growth. South Stream is exactly this kind of investment project and energy engine. It is very good that we have agreed on everything. Serbia has passed a relevant law. Today we discussed legal nuances, including with regard to the so-called third energy package, because this is a sensitive component for us. Yet I hope that we will find a way out of this situation. In summary – new investment projects are necessary in this period of economic shocks. This is what we are doing with our Serbian partners.   

Regarding Serbia’s proposals, we will closely study them and work on them in the framework of existing intergovernmental procedures.

Question:  A question for the Russian Prime Minister. Currently Serbia is under strong pressure from the West regarding talks on Kosovo. I’d like to ask a question, a sensitive question for all Serbs who have always had great expectations on the position of Moscow and Russia: what support can Serbians get regarding future decisions on Kosovo? In this regard, I’d like to ask our Prime Minister too: how can you comment on the possibility of continuing a dialogue with Pristina?

Dmitry Medvedev: We understand the importance of the issue of Kosovo and Metohija for our friends in Serbia and for the Serbs in general. Of course, this problem is always raised during talks. Today I told my colleague what position we have always held and will hold on this issue. It is simple. We will support our Serbian friends, we will always support the position formulated by Serbian leaders. We believe that the position itself, the level of its intensity, political nuances, separate negotiating aspects, and the main interest – this is the interest of the Serbian side. In other words, it is not up to us to promote this process but Serbia itself, and you have to want to see the right outcome. I say this because some time ago, when we were in talks with Serbian partners, I had a feeling that they expected from Russia more than from Serbia itself. This is no good. You should decide what position you will support in the United Nations too, although they have dropped this issue, and in terms of talks with the European Union. I want everybody to hear this.   

Ivica Dacic (via interpreter): Regarding the continuation of the dialogue with Pristina. We want to continue dialogue and achieve a durable resolution of the Kosovo issue. Of course, we will never agree with the unilateral declaration of Kosovo’s independence. We believe that this is a new precedent that had not existed previously in international law, and we believe that this would legalise relations that violate international law. On the other hand, we want and must defend our people – the Serbs who live in Kosovo. And we want to continue this dialogue. Of course, we do not want to simply agree to everything proposed to us – what has just been on the table, we could not agree with it. But we are ready to continue talks and ensure that the outcome is the correct one.  

If we want Russia to more actively participate in this process, we should have consultations on each step that we make on this issue and not make unilateral movements which it is difficult to correct afterwards, as was, for example, the case with the proposal to the UN General Assembly to negotiate the issue under the  European Union that had been made without consultations. And currently they are at the level of the European Union. And currently Serbia is asking Russia to help return these talks into the UN. International law is not a plaything. We should give thought to what steps should be taken; we should consider our strength and capabilities, and resolve this issue in the future.

Question: What are the conditions of the loan for 500 million that Russia is extending to Serbia. Can Russia extend one more loan? Initially, Serbia requested one billion.

Dmitry Medvedev: These are good terms, almost no one gets such terms.

Ivica Dacic (via interpreter): Had they been different, our minister of finance would not have taken the loan.

Dmitry Medvedev: Yes, the terms are good indeed, they are lower than market terms. Last week we discussed this issue at the Government meeting and decided to extend this loan on certain conditions to the Serbian partners, primarily considering our special relationship and the economic situation. 

Regarding the future, you should first take this loan and use it; it is divided into two tranches. Later we will discuss what we will do next. I recall that some time ago, back in 2010, we decided to extend a $1 billion loan including $200 million as a financial loan, and $800 million as an infrastructure loan; so we are continuing down the same road. 

That’s all. Thank you.