Putin pours scorn on defence and fuel fears

Published on 24/09/2006 00:56

RUSSIAN president Vladimir Putin moved yesterday to allay western fears over Russia's intentions towards European aerospace group EADS and offered the prospect of more gas for Europe, saying Russia was a reliable energy partner.

Putin's remarks at a joint news conference with his French counterpart Jacques Chirac and German chancellor Angela Merkel followed a meeting between the three leaders which focused on aviation and Western worries about energy security.

Russia wants to join the core group behind EADS after it acquired a 5% stake in the flagship European aerospace group earlier this month. Flush with oil revenues, Moscow has sought to create industrial champions in energy and other strategic sectors, notably aerospace and defence.

EADS bosses have welcomed technical cooperation but rebuffed talk that Russia might become a core shareholder.

But Putin said the West had nothing to fear. "As far as the 5% stake is concerned, it is not a sign of some sort of aggressive behaviour by the Russian side; it is a play on the share market and the Russian bank saw a favourable deal and took advantage of it," Putin said. "We do not intend to use these shares to change the institutional situation in EADS but we are ready for partnership."

Worries about Moscow using its energy resources as a political weapon resurfaced in a stand-off with Western oil companies over huge oil and gas projects in Russia's remote Sakhalin region.

Russia, which caused alarm in Europe last winter by cutting gas supplies to Ukraine, has put the brakes on energy projects in Russia operated by Royal Dutch Shell and Exxon Mobil. Some in the market see the move as a bid to increase the Kremlin's stake in those projects.

Putin said Russia was a reliable partner and said natural gas giant Gazprom was considering exporting gas to Europe from its Shtokman gas project.