18 February EU-Russia summit

Date: 25/02/1999

EU LEADERS failed to make any major breakthroughs on Russia's huge debt repayment problems at a summit meeting with President Boris Yeltsin. Instead they concentrated on a range of bilateral issues, stressing their intention to intensify relations, with the long-term aim of setting up a free trade area between Russia and the EU.

THE summit also cleared the way for the EU to implement its €440-million food aid package for Russia by removing a number of final obstacles. The first shipment of aid, consisting of nearly 400,000 tonnes of EU cereals, rice, beef and milk powder, is now expected to reach Russia in mid-March.

GERMAN Chancellor Gerhard Schröder stressed that Russia was one of the EU's “most important partners”, a view which was echoed by Yeltsin, who emphasised Russia's Partnership and Cooperation Agreement (PCA) with the EU.

PRESSURE from Moscow for closer relations with the EU resulted in both sides stressing that one of the aims of the PCA was to expand two-way trade and investment with the ultimate objective of setting up a bilateral free trade area.

YELTSIN gave an account of Moscow's attempts to stabilise Russia's financial situation and pledged that the country would fully respect its external financial commitments. Moscow is expected to struggle to make repayments on a range of foreign loans which fall due this year. Schröder said that Europe would not be giving any new money to Russia this year to ease its economic problems.

ON THE conflict in the Serbian province of Kosovo, Yeltsin repeated his opposition to NATO bombing in Serbia or to a NATO peacekeeping force being deployed on the ground. Referring to the ongoing peace talks in the Parisian suburb of Rambouillet, both sides agreed on the “urgent need” for an interim solution to the crisis.

THE EU also briefed the Russians on preparations for a 'common strategy' for Russia due to be approved at the Cologne summit in June.

ON EXISTING trade relations, the EU expressed its concern at the sharp drop in exports to Russia and raised problems about market access caused by differences in common standards. The Russians agreed to step up efforts to prepare for World Trade Organisation membership as a way of easing trade and investment flows which would, in turn, help the economic situation.