MR. PUTIN GOES TO BAVARIA

UNCLAS SECTION 01 OF 02 MUNICH 000767 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PGOV PREL GM RS SUBJECT: MR. PUTIN GOES TO BAVARIA REF: MUNICH 715 -------------- SUMMARY -------------- ¶1. The Bavarian government warmly welcomed Russian President Vladimir Putin during his visit to Munich October 11. Shortly after Putin's visit, the so-called "Days of Moscow" were opened in the Bavarian capital marking the visit of Moscow Mayor Yuri Luzhkov, to whom Minister-President Stoiber awarded the Bavarian Order of Merit. Bavaria was the first German state to open an office in Moscow (in 1991),and values its relationship with Russia. A State Chancery contact told us that while Stoiber desires to strengthen Russian-Bavarian relations and create a free trade zone between the EU and Russia, Stoiber still considers strengthening the transatlantic partnership to be a priority. End summary. -------------- PUTIN CHOSES MUNICH -------------- ¶2. Bavarian Minister-President Stoiber extended an invitation to President Putin to visit Bavaria when he traveled to Russia in 2002 as a chancellor candidate. The Bavarian government was pleasantly surprised when Putin decided not to go to Berlin, Frankfurt or Duesseldorf during his recent visit to Germany, but to come to Munich, following his visit with Chancellor Merkel in Dresden. Michael Hoehenberger, Stoiber's chief of staff at the State Chancery, said Stoiber had planned a joint meeting with leading Bavarian businessmen and scientists. Putin's advance team, led by deputy protocol chief Markov, then decided Putin was mainly interested in scientific innovation and wanted businessmen disinvited, but in the end there were two separate meetings with both groups. ¶3. Hoehenberger said hundreds of businessmen were invited to a dinner hosted by the Munich Chamber of Commerce. In his dinner speech, Putin offered cooperation on many fields. Currently, about 4,500 German companies invest in Russia, with one third of them Bavarian. Putin stressed the time was right for Russian investment in Germany and the rest of Europe -- nobody should be afraid of Russian dominance or German dependence on Russian oil and gas. Putin said he did not understand German nervousness, as Russian partners were no less capitalist than their Western counterparts. Hoehenberger told us that the businessmen in Putin's delegation represented billions of dollars in potential investment. The Russian gas company Gazprom alone had 300 billion dollars in cash and could buy not only one German soccer club, but the whole soccer league should they want to. -------------- SKEPTICISM OVER RUSSIA'S INTENSIONS -------------- ¶4. According to Hoehenberger, however, Stoiber is skeptical about a substantial expansion of Russian interests in Europe. Stoiber dampened Putin's expectations with regard to a larger share in the aerospace company EADS (reftel). At the same time, Bavaria preferred reliance on nuclear power to a disproportionate reliance on Russian oil and gas supplies. Hoehenberger said Stoiber was pleased when Putin told him that while many Russians felt the country should economically orient itself more toward countries like China and India, he personally believed that a revival of Russian-European relations was preferable. -------------- EU-RUSSIA FREE TRADE ZONE? -------------- ¶5. Stoiber's suggestion of a free trade zone between the European Union and Russia acknowledged the special German-Russian relationship, and was in no way intended to counter a potential free trade zone between the EU and the U.S, Hoehenberger emphasized. Bavarian politicians were of the opinion that economic ties would strengthen Russian democracy, just as economic ties contributed to the downfall of Communism. Hoehenberger also said that with regard to German-Russian relations, Stoiber and Merkel were on the same page; if there was dissonance over Russia within the grand coalition, it would be due to the SPD. -------------- HUMAN RIGHTS -------------- ¶6. Hoehenberger said human rights had also been a topic of discussion between Stoiber and Putin. However, Putin described the murdered journalist Anna Politkovskaya as a person of little influence. At the same time, he denied allegations that the Russian government had anything to do with the murder. In fact, such events MUNICH 00000767 002 OF 002 only damaged the reputation of his government, Putin said -- he would dedicate all necessary resources to solve this crime. In contrast to Putin, Hoehenberger said Moscow Mayor Luzhkov did acknowledge Politkovskaya's influence in Russia. ¶7. Hoehenberger described Vladimir Putin as a man who came across as an intelligent and focused conversation partner with a good sense of humor. Putin also seemed to enjoy the relaxed atmosphere of a local brewery later in the evening, as he stayed two hours longer than planed - delaying his departure until well after midnight. -------------- "DAYS OF MOSCOW" -------------- ¶8. Shortly after Putin's delegation departed, another delegation arrived in Munich, headed by Moscow Mayor Yuri Luzhkov. Bavaria has maintained an office in Moscow, the first representation there by a German federal state, since 1991. Half of all German enterprises in Moscow are Bavarian, with Bavarian companies investing Euro 1.5 billion in Russia last year alone. On October 20, Stoiber and Luzhkov signed a memorandum on an extension of their cooperation. The so-called "Days of Moscow" included a series of economic and cultural events and continued through October 27. ¶9. Previous reporting from Munich is available on our SIPRNET website at www.state.sgov.gov/p/eur/munich/ . NELSON