At St. Petersburg International Economic Forum – Part II: Putin: 'Europe Depends On The U.S. In Terms Of Security – But There Is No Need To Worry, We Can Help With Security'; Macron: 'We Really Need To Build A Useful World Order'

The honorary guests of the 2018 St. Petersburg International Economic Forum included French President Emmanuel Macron and Japanese Prime Minister Shinzo Abe.[1] However, Macron was the guest who made the news.

Macron visited Russia, at a moment when France is in strong disagreement with the Trump administration over the U.S.'s withdrawal from the JCPOA. France, which supports the nuclear deal, wants to show its "national independence" from Washington. Macron believes that by standing up against Trump's decision and sanctions, he can assert a "European sovereignty,"[2] which has become his leitmotif, and thereby bolster his claims to leadership in Europe.[3]

Seizing the opening, Putin told Macron that Russia could ensure France and Europe's security, in order for Europe to be independent from the U.S. Putin said: "Emmanuel said that Europe and the United States have mutual obligations. Europe depends on the U.S. in terms of security. But there is no need to worry, we can help with security. At any rate, we will do everything we can to prevent any new threats. I think we need to take this road. This is the first thing."

Macron answered Putin, underlining France's military independence and hinting that France is also independent from Washington. Macron stated: "I would like to assure Vladimir that I am not at all afraid, because France has an army that alone can defend the country. However, I have certain obligations with regard to other European allies. I think that the European security architecture I just spoke about is our responsibility. But in any case, we will not turn our backs, and this should not be done to the detriment of other European states. I think we can act this way, so I am not afraid and I want to fulfill my responsibility."

He also added: "I want to put an end to this insufficient sovereignty, which, perhaps, was the case in Europe before."

Macron also tackled NATO-Russia relations, stating that that NATO countries had made mistakes, causing Russia reasonable fears. Macron said: "I think that the mistake that was made in the last 20 years was that we in NATO failed to fully comply with all the obligations we had taken on, and this caused certain fears, quite reasonable ones. And we did not have the trust that Russia rightfully expected."

He then stressed that France would nevertheless not turn its back on partnership with the U.S. Macron stated: "If so, as far as NATO is concerned, should we turn our backs on the U.S. in this partnership? No. Otherwise I would have lied." However, Macron concluded, leaving a door open for Putin: "As for collective defense and security, indeed the European Union, France and Russia should try and build a new architecture that would allow us to move forward in an atmosphere of trust."

Below are excerpts of Q&As at the 22nd St Petersburg International Economic Forum:

Russian President Vladimir Putin and French President Emmanuel Macron took part in the Russia-France Business Dialogue panel discussion at the St. Petersburg International Economic Forum. (Source: Kremlin.ru)

Moderator John Micklethwait (editor-in-chief of Bloomberg News): "… We have the Iranian nuclear accord, which broke up, we have North Korea where there has been news about Donald Trump, and we have the U.S.-China trade war. And then we will go look at Russia's relationship with the rest of the world.

"Mr. Putin, as the host, will you take the first question? I hope that you will set the fashion for making a direct answer.

"There was a nuclear deal signed with Iran in 2015. Donald Trump as we all know has unilaterally withdrawn from it. You have condemned this, Mr. Macron has condemned this. We all know you want to keep the deal. You say you are a man of action. What actions will you take to keep the Iranian nuclear deal alive now?"

Vladimir Putin: "The Iran nuclear deal has been formalized by an appropriate UN Security Council Resolution. It is a multilateral international document. If we want our actions to be predictable, we must comply with common rules.

"Unilateral actions lead to a dead-end and are always counterproductive. This is why everyone, all parties to this process must talk with each other openly and look for solutions. An idea occurred to us yesterday when President Macron and I discussed this problem.

"The United States holds presidential elections every four years. If international legal documents are reconsidered every three or four years at the most, we will have a zero planning horizon. This would create a nervous atmosphere and mistrust. On the contrary, if we respect our agreements, this would lead to stability and initiate the search for mutually acceptable solutions."

John Micklethwait: "Can I push you on a particular thing? If during the previous sanctions regimes Russia supported the sanctions against Iran, and you followed the rules, this time you disagree with what has happened. If the Americans impose sanctions on Iran selling oil, will you buy the oil, perhaps in exchange for wheat, or something like that, and allow Iran to get round the deal?"

Vladimir Putin: "This is a simple question, because we do not buy oil, we produce and sell it. Russia is a major oil supplier in the international market.

"As for sanctions, Russia supported the sanctions against Iran that were adopted by the UN Security Council, but we never supported anything that is enforced by anyone unilaterally. I always said so and always considered such actions to be harmful and counterproductive.

"Experts in Russia and the West recall the speech I made in Munich in 2005, when I spoke about the unacceptability of the exterritorial use of national legislation, or more precisely, US legislation. Many people in the United States and Europe were angry with me. But this is exactly what I warned everyone about. And now we see this in full bloom. 'Dinner is served, enjoy.' (Applause.)

"If we look carefully at what is happening and react in good time, there will be fewer such problems. We supported everything that was proposed by the international community to convince our Iranian partners to accept these arrangements.

"It should be noted that our Iranian partners made many compromises and are honoring their obligations now. I have recently met with the IAEA Director General – he is a respected person and the head of a respected organization that is trusted universally. He told me once again that according to IAEA data, Iran is fully honoring its commitments. Why should it be punished then? I do not understand this. This is the first part.

"The second part concerns what will happen if this deal is destroyed. Would this benefit anyone? Would this benefit the international community and the region? Will the regional countries, including Israel, with which we have very good ties, feel safer? Mr. Netanyahu has recently been in Moscow. Moreover, he attended the events we held to mark the victory over Nazism, and he marched on Red Square with a photograph of a WWII hero. It was a unique gesture and evidence of the good trust-based relations between us.

"But will Israel be better off if Iran withdrew, is forced to withdraw from or is pushed out of this deal? In this event, Iran's nuclear activities will be hidden from everyone, and we will not know what is happening there. What risks will this create? Look, we are still grappling with North Korea. There are many problems there, and none of them has been settled.

"Do we want to create one more problem of this kind, or even a bigger problem, considering the explosiveness of the region? I do not think so. Therefore, I believe we must not get worked up.

"We should conduct a dialogue calmly in a considerate and professional manner, and we must find a solution.

"As for sanctions, I have said that we always supported legitimate actions approved by the UN Security Council, and we never supported anything that was enforced unilaterally."

France-U.S. Relations – Putin: "I Want To Put An End To This Insufficient Sovereignty, Which, Perhaps, Was The Case In Europe Before"

John Micklethwait: "Mr. Putin, I will come straight to Mme Lagarde in a second, but do you have any advice for the world in terms of how to deal with President Trump, because you were somebody who was associated with the election of President Trump. And yet you can look and see what happened, there are many here who are under sanctions. He has just withdrawn from the Iran deal; there are doubts about the North Korean deal. What do you think you have got from the relationship with him? This is the same question that I asked Mr. Macron."

Vladimir Putin: "Provocateur. I was not related to Mr. Trump's election campaign. (Laughter.)

"But of course, we cannot be satisfied with the level and nature of Russia-U.S. relations. We are ready for this dialogue. Mr. Trump suggested having a meeting specifically on the issue but we have not had a chance to have it yet, there have been too many issues to address. However, we are ready to have a substantive dialogue on a great number of issues. I think it is high time we did this. Donald has expressed concern over a potential new arms race and I fully agree with him.

"The steps we are discussing now, both on the North Korean problem and Iran, they are not bringing us closer, that is for sure. And this is also a reason to discuss them.

"Emmanuel said that Europe and the United States have mutual obligations. Europe depends on the U.S. in terms of security. But there is no need to worry, we can help with security. At any rate, we will do everything we can to prevent any new threats. I think we need to take this road. This is the first thing.

"Second, as concerns the United States and the U.S. President losing by withdrawing from the Iran nuclear deal, I will talk this over with the French President. I do not think so. I do not think that President Trump lost. First of all, because he is fulfilling his election obligations. And in that, he has won in his domestic policy, to a certain extent. However, if the deal gets completely ruined after all, many will indeed lose. We must do everything we can to prevent this from happening.

"Of course, this requires working with all participants, first and foremost, with the United States. Why? Because – let me take you behind the scenes of this deal – the main dialogue took place between the U.S. and Iran. The other participants in the talks only adjusted the process slightly, including Russia. I am not going to hide this, we often did it to protect Iran's interests. Eventually, after rather extensive bilateral talks between Iran and the U.S., everybody reached a compromise. This means that, despite all the difficulties, the two countries managed to agree.

"Even now, the U.S. President is not closing the door on talks. He is saying that he is not happy about many of the terms of the deal. But in general, he is not ruling out an agreement with Iran. But it can only be a two-way street. Therefore, there is no need for unnecessary pressure if we want to preserve something. Doors must be left open for negotiation and for the final outcome. I think there are still grounds for hope."

[...]

President of France Emmanuel Macron: "I just wanted to say that I am not saying the Iranian agreement was Trump's defeat; I was talking about the climate agreements. I said that he cannot threaten this agreement with Iran at the international level. I am just explaining what the consequences might be, but these are agreements between us.

"As for security, I would like to assure Vladimir that I am not at all afraid, because France has an army that alone can defend the country. However, I have certain obligations with regard to other European allies. I think that the European security architecture I just spoke about is our responsibility. But in any case, we will not turn our backs, and this should not be done to the detriment of other European states. I think we can act this way, so I am not afraid and I want to fulfill my responsibility."

Vladimir Putin: "It is a pity. You do not need to be afraid, of course, but the practice is already accumulating. Look, we all are focusing on Iran now. After all, European economic operators have already faced U.S. sanctions – 9 billion for Paribas, a French bank, and Deutshe Bank – just for violating unilateral sanctions. So what? They paid. And a Japanese bank went through the same thing. It is necessary to end this, as it is unacceptable. That is what this is about.

"What if this continues? What good will it do? It is destroying the existing world order. We must certainly agree with our American partners about some common rules of conduct. This is extremely important, because it is precisely what is at the heart of our discussion today – trust. Either there is trust, or there is not.

"If there is no trust, nothing good will ever come about. Then really, as I said in my remarks, force will remain the only element that is left in international affairs, and this can simply lead to tragedy in the end."

Emmanuel Macron: "I share your point of view. I fully share your point of view, all your economic and financial reasoning. Indeed, there is no doubt. I have also spoken about this. We really need to build a useful world order, and a stable one. Indeed, this depends on sovereignty, and on a multilateral approach to cooperation.

"Sovereignty means respect for the interests of citizens and companies that depend on their government. From this point of view, we have full agreement. We need to have the appropriate means, and we must agree on this with the United States of America.

"To be clear, I want to put an end to this insufficient sovereignty, which, perhaps, was the case in Europe before. The first decision I took with respect to France was precisely this. I completely agree. I think that there should be no uncertainty about security. We have a common history, so we need to find the right line of action in this regard. There is a collective security system and defense. This is very important for the European part and for the United States.

"I think that the mistake that was made in the last 20 years was that we in NATO failed to fully comply with all the obligations we had taken on, and this caused certain fears, quite reasonable ones. And we did not have the trust that Russia rightfully expected. If so, as far as NATO is concerned, should we turn our backs on the U.S. in this partnership? No. Otherwise I would have lied.

"I came here to tell you the truth. Yes, indeed, as regards economic and financial sovereignty, I agree, but as for collective defense and security, indeed the European Union, France and Russia should try and build a new architecture that would allow us to move forward in an atmosphere of trust.

"This is something else. I think that we should not confuse these two topics, but I completely agree with the first point."

Sanctions – Putin: We Are Headed Towards Chaos

John Micklethwait: "Before I come to Mr. Abe, and Ms. Lagarde, can I just ask President Putin something? President Putin, if you look around this room, you would seem to see evidence that sanctions do not work. Virtually everyone I meet here has been sanctioned in some way, and yet Russian business continues to thrive. Do sanctions still have any effect at all?"

Vladimir Putin: "You see, today we already mentioned sports, and my good friend, Mr. Prime Minister imagined Russia and Japan playing in the World Cup final. This is not a good idea. What if we lose? It would be an unimaginable disaster.

"But that is beside the point. The point is we are seeing in the world today a situation where everyone pretends to be playing football, while actually following the rules of judo. What an interesting game that is: not at all football, and not judo either, just chaos. This is where we are headed, and it causes us concern.

"This is not just about the so-called sanctions or restrictions. There are people here who feel and understand what this means, and have first-hand experience in this matter. This applies to a vast majority of those present here, since the sanctions truncheon, as has been mentioned here already, is increasingly used against many, not only Russia. Is it good or bad? Can this be overcome or not?

"It is clear that the Russian economy has now gained a more stable footing despite the double and triple blows that came with the drop in prices of our traditional exports – energy, metals and chemical products, exacerbated by the pressure of sanctions. We had to face all this at the same time.

"However, we were able to find a way through, and have even gone further by strengthening our economy somewhat. I am very grateful to Christine [Lagarde] who said today that she sees positive developments on the macroeconomic side of Russia's economy. But the losses are still felt by everyone, and development is held back.

"In any case, these restrictions hold back the development of Russian businesses, which are unable to fully refinance their loans on international markets, and so forth. At a certain stage, this creates constraints, but once solutions are found, a breakthrough still happens, and everything goes back to normal. For this reason, this policy ultimately makes no economic, political or military sense.

"As for the military aspect, I have already mentioned this. One of the reasons behind the attempts to contain Russia is to prevent the development of defense technology. We have shown recently that Russia is now ahead of many of our partners in defense technology despite the sanctions. Therefore, it is pointless, but still pernicious."

Malaysia Airlines Plane MH17

John Micklethwait: "Mr. Putin, the theme of this conference is 'Building trust.' As you know in the rest of Europe, the newspapers over the past couple of days have looked at one particular issue to do with Russia. Yesterday, the Dutch investigation team into the destruction of Malaysia Airlines plane MH17 came forward and said it had proof that the Buk missile that hit the plane came from the 53rd Anti-Aircraft Missile Brigade of the Russian Army based in Kirkuk. When you were asked about this yesterday, you said you did not have an explanation. I wondered now, what is the explanation? Have they made this up? Or was the missile allowed to cross into Ukraine? What happened to the chain of command on this particular issue?"

Vladimir Putin: "I discussed this issue yesterday, and I can repeat that, unfortunately, we were not allowed to take part in a full-fledged investigation. Therefore, we have no reason to completely trust the results of this investigation. We are not involved in it. The commission conducting this investigation does not heed the arguments we present so that they could be taken into account during the investigation.

"I would like to note once again that this is a terrible tragedy. Yesterday, Emmanuel rightly said that we must always remember the families of the people who perished and the people who died as a result of this terrible disaster. Of course, it goes without saying that we will always remember this. But, for some reason, no one even recalls the fact that Ukraine had failed to fulfill its obligations stipulated by the International Civil Aviation Organization (ICAO) and did not close the air space over the conflict zone.

"There are different versions of what happened in this tragedy, but no one considers them. Therefore, it will be very hard for us to accept the findings of this commission, which is working without us, unless there is a full-fledged investigation. That is it.

"Unfortunately, we have experienced some other tragic incidents linked with Ukraine. Some time ago, they downed a Russian aircraft flying from Israel over the Black Sea and did not admit their guilt. They did later, but did not pay any compensation whatsoever. Unfortunately, we have a negative history.

"Regarding this specific tragic incident, we would like to take a full-fledged part in the investigation."

John Micklethwait: "One last question, are you saying this was not a Russia missile? This was not a Russian army missile?"

Vladimir Putin: "Of course, not.

"I repeat: There are several versions of what happened, including a Ukrainian army missile, an aircraft and so on. But, I repeat, there is nothing that would make us trust these findings. This will not happen, unless we fully participate in the investigation."

Russia-West Relations – Putin: We Will Strive To Attain Our National Interests

John Micklethwait: "President Putin, what is your goal for Russia and West? Where do you want to see Russia and the West? Despite all these misunderstandings, we could have gone through many other ones, where do you actually want to take Russia? Do you want St. Petersburg, this place, which is seen as the symbol of the Western capital of Russia, can you image this again being integrated into Europe in the sort of way that Mr. Macron described?"

Vladimir Putin: "Each country has its own national priorities and its own interests. I spoke about this in my remarks today. We will certainly strive to attain our national interests. What are they, today and in the near future?

"First of all, internal development. We need to ensure the growth of labor productivity in our economy, create an attractive environment for investment, because without investment, it is impossible to meet another important goal – to diversify our economy.

"Ms. Lagarde here told me about it yesterday and hinted again today. But we had a 4.4 percent growth in fixed investment last year, and 11.5 percent economic growth. This is a good sign –accelerated growth in investment, but this is not enough at all. Absolutely not enough!

"To attract capital from friendly companies and countries, we need good relations with Europe, and with the whole world, including the United States. We understand this perfectly and are aware of this.

"But if we are faced with a choice – either to remain a sovereign state or to suffer certain restrictions – then, of course, we choose the first option. Because these are too disparate substances to be thrown into the balance: either existence as an independent state, or investment thrown as a bone.

"We seek only one thing: we want new rules of the game developed, or the old ones returned in the sphere of security and global economic politics with the help of international institutions that have already been established need to be further developed.

"This is the groundwork we need to attain our next goal – to diversify our own economy, and make it innovative. We want to work on artificial intelligence, on robotics, and so on and so forth.

"By the way, Christine has voiced concerns about robotics and job losses. This is not so terrible, actually, although such fears do exist, and so does the danger, to be honest. Still, according to experts, including international experts, only 5 percent of jobs worldwide can be entirely automated and only 10 percent of those have been automated so far. So there are good prospects for both our economy and the world economy.

"Actually, we need this to achieve our main goal: to improve the lives of our people, to reduce the number of people living below the poverty line, and to raise the main indicator of welfare, life expectancy, to 78 years by 2024 and to 80 plus by 2030, as I already said.

"All these tasks are absolutely solvable, but, of course, we need favorable external conditions. We will work for this in every way, not forgetting that it is in our national interest as well, yet we certainly cannot sacrifice our sovereignty and our deep, fundamental interests. I hope that this balance will be found between Russia and our partners."

The World Cup

John Micklethwait: "Can I ask you one final question? Who will win the World Cup?"

Vladimir Putin: "The winners will be the organizers, those who organize this wonderful event at the proper level for the entire international community, for all lovers of this great international game. In any case, this is how we see our mission.

"As for the teams, may the best one win, as they say. I would really like it to be a real celebration for everyone who loves sport: for the footballers and for our guests alike. We will make every effort to ensure that fans, experts and players all feel at home in Russia."