Russian Leader Warns of Political Instability
Dmitry Medvedev's relaxed bearing belied his bracing message about the risks he sees for Europe's common currency, oil giant BP PLC and global security from the Middle East to Central Asia.
"Centrifugal" forces could threaten the European Union, while the Gulf of Mexico oil spill might "annihilate" BP, the Russian president said in a wide-ranging interview with The Wall Street Journal. If Iran were to acquire nuclear weapons, "a wave" of other nations in the region would race to follow suit, he said. And in the strategic but strife-torn Central Asian state of Kyrgyzstan, he said signs of stabilization remain extremely fragile.
Between meetings with visiting regional leaders at the Konstantinovsky Palace, his official residence here overlooking the Gulf of Finland, the president sat down in a hall painted with satyrs to survey the world.
Two years after Vladimir Putin plucked the former lawyer and Kremlin aide to succeed him as president, Mr. Medvedev, now 43 years old, has acquired the outward assurance of a president. He easily brushed off a question about his relations with his patron—now prime minister and a man viewed by many here as wielding true power. "I'm the president, he's the prime minister."
Mr. Medvedev lamented that he has little time to watch soccer matches, including his hometown St. Petersburg team Zenit. When he did make time for a game—the World Cup qualifying match with Slovenia last fall—Russia lost. "There were unpleasant emotions, and even the subsequent conversation with the president of Slovenia didn't lift my mood," he said.
From the city Peter the Great founded three centuries ago to open Russia to Europe, Mr. Medvedev expressed worry about the sovereign-debt crisis now sweeping the Continent. "We very much hope the measures to support the euro and support the economy bring results," he said. "We're very interested in stability in Europe."
The issue was the subject of "hours" of talks at a recent meeting with German Chancellor Angela Merkel and will be a top item on the agenda in a meeting in St. Petersburg Saturday with French President Nicolas Sarkozy.
"The whole discussion revolved around the question of 'what are you for—stability or solidarity?' That's the division in a series of European countries," he said of the talks with Ms. Merkel.
Though he said Europe didn't need his advice, he advised a "pragmatic" course between the two—not cutting budgets so harshly that it shook economies but also not pumping up spending to destabilizing levels.
"Implementing the recommendations of other countries or the European Commission, even the smartest ones, is very difficult, especially if thousands of people are out in the streets demanding the dissolution of parliament or the ouster of the government," he said. Continent-wide efforts to revive growth depends on how "consistent" the countries with struggling economies are in implementing these austerity policies, Mr. Medvedev said.
Just over a year ago, Russia itself looked at risk of major economic troubles. But the Kremlin's massive $200 billion stimulus program—and the recovery in oil and commodity prices—has helped shore up Russia's economy and narrow its budget deficit.
Asked if the crisis in Europe could worsen and threaten the Continent's common currency, he answered, "Not yet, but that danger can't be excluded."
He pointed to rising calls in some European countries to give up the euro as alarming signs of political pressure on the common European idea.
The Russian president voiced support for BP, the largest foreign investor in the Russian oil sector, but said it's too early to assess the damage the company will suffer from the oil spill in the Gulf of Mexico. He laughed nervously when asked what the crisis could mean for Russia's view of BP as a partner.
"What I know is that BP will have to pay a lot of money this year," he said. "Whether the company can digest those expenditures, whether they will lead to the annihilation of the company or its breakup into pieces is a matter of expediency."
He called for international efforts to reduce the risks and potentially insure the risks from such accidents, which he said could conceivably be so large as to overwhelm not just individual companies but also countries.
With his first state visit to the U.S. set for next week, Mr. Medvedev said he hoped to complement the progress reached in recent months with Washington on security issues like nuclear-arms reduction with new steps to boost languishing economic ties.
He spoke excitedly of the first leg of his trip, which will take him on his first visit to California, he said. There, he said he will seek lessons from Silicon Valley for his own efforts to set up a special high-technology enclave outside Moscow. He singled out the many Russian-born specialists now in Silicon Valley. Among the most prominent is Google Inc. founder Sergei Brin.
Mr. Medvedev took a more jaded tone about the Washington stop. He welcomed U.S. support for Russia's bid to join the World Trade Organization but added tartly that "the ball is in the U.S. court.
"We've been led around by the nose for a long time," he said, referring to Russia's 16-year bid to join the trade bloc. Other countries "whose economies couldn't be called market-based" have already been admitted, he added.
On foreign policy, too, there were signs of tension. Mr. Medvedev complained that the U.S. military base in Kyrgyzstan—a key transit point for supplies for the Afghan war—shouldn't be viewed as a permanent installation. "That's a question for discussion," he said.
Mr. Medvedev said he couldn't predict how events would unfold in North Korea. He said Russian specialists are doing their own investigation of the sinking of a South Korean naval boat, which killed 46 soldiers.
He praised his "Chinese partners" for continuing to maintain ties with the reclusive regime. "Despite the difficulties of communicating with North Korea, they can't be backed into a corner and make the situation so tense that it prompts some kind of inappropriate action," said Mr. Medvedev.
Source: The Wall Street Journal