WHEN: Today, Friday, May 23rd
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Russian President Vladimir Putin. Video from the interview is available on CNBC.com.
All references must be sourced to CNBC.
GEOFF CUTMORE: Mr President, thank you very much for your address and I think there was a lot in there that we can come back to on the economy, but I think it would be useful at this point for me to ask you a few questions about Ukraine. Obviously Ukraine is going into presidential elections at the weekend. An awful lot has been written, and an awful lot has been said, about your position on Ukraine, but let's be honest, most of it not by you. A lot of those who have written have said you are nostalgic for a Russia of the past. President Obama said you are "on the wrong side of history." Those who have written and spoken widely talk about you rebuilding the past and wanting to create a buffer state between NATO and the EU and yourself. Can I ask you what has motivated your actions through this crisis?
VLADIMIR PUTIN: Well I was planning to talk more about economy, but if that is what you desire, let us talk about this topic. Look, what happened. Let us make a general overview of what happened. Ukraine was supposed to sign an association agreement with the European Union. And we using diplomatic ways tried to prove that the document on the table was contrary to our interests here in Russia. We're referring to the close cooperation and economic ties we have with Ukraine. Look at the defence industry, only 245 Ukrainian enterprises supply their products to Russia. What happens if we stop procuring from them? Well, they will have to stop production because we will not be procuring agents for the aid or our marine ships because no-one else in the world needs them. And it's so difficult to enter the global market military components. And we proved using very specific data that this agreement would be detrimental to the economy. And I want you to understand, I want you to hear me, we suggested that they engage in a very civilised and open discussion with us to try and find some solution. We were told, "It is not about business." I'm not trying to offend anyone, but I haven't seen such a snobbish attitude in years. (audience applause) They just refused to talk. Full stop, saying it's not about business. Well if it is indeed not about business, and we tried to prove to the Ukrainian partners that we had the point. We asked them to try and calculate implication consequences, I tried to convince President Yanukovych to postpone deciding, what happened later was coup d'état. Name it what you may, but force was used, rebels were used, who is on what side now? Who is in the past? Who is in the future? What tools are we using to attain our goals? One needs to be very careful and cautious when dealing with constitutions and any changes or transformations in newly-born states. What happened in Ukraine now is chaos, the country is sliding into chaos. Yanukovych agreed to do anything, whatever, had it all been done legally, we'd continue subsidising them, we'd keep gas prices low, we'd allocate the 15 billion we'd promised. Let us be frank, we're all grownups in the room, we're all smart and educated people. The West supported anti-constitutional coup d'état, not just by giving away cookies, but by giving political support, support in the media, using all sorts of tools. And are you blaming us? What we suggested was dialogue. We were denied. When I last came to Brussels we agreed that dialogue would continue but that was before the coup d'état. And now Mr Ulyukaev, who sits opposite me, he is a well-respected man, speaks decent English, by the way. He's got market economy way of thinking, he's one of our top economic experts. So Mr Ulyukaev came to Kiev for (unclear) consultations, well ask him, no real discussion ever took place, they were just spitting out mottos. And now what happens next? Coup d'état took place, they refused to talk to us, so we think the next step Ukraine is going to take, it's going to become NATO member for the past two decades, they've refused to engage in any dialogue. We're saying military, NATO military infrastructure is approaching our borders, they say not to worry it has nothing to do with you. But tomorrow Ukraine might become a NATO member, and the day after tomorrow missile defence units of NATO could be deployed in this country. And again they would say we refuse to talk to you, it's none of your business. We're sick and tired of discussing, because it's not a real discussion. Look, we have concerns, both economic and security concerns for that matter, what are we supposed to do? People in the southeast of Ukraine, in Crimea in particular were frightened by the development and people of the Crimea opted for a referendum on accession to Russia. All we did, we guaranteed freedom of, expression of their will and I'm sure you'll all agree, and the majority of people in this room, and most people in the world, they understand because no one's stupid. Had we not done that in Crimea, the situation in Crimea would have been even worse than the situation in Odessa, where people were burned alive. No one's trying to give any explanation or condemn those who are to blame for the Odessa tragedy. Now you tell me who is stuck in the past, and who is acting, taking into account the realities of today's world.
CUTMORE: President Putin, I think we've all been astonished at how quickly relations between apparent former friends have broken down as this crisis has escalated. There is an opportunity here for statesmanship. There is an opportunity for you to step up and say something. Is there something you can do at this stage, or at this point, to encourage pro-Russian groups in Ukraine now to reduce the level of tension and the violence to allow the democratic process to go ahead on Sunday and perhaps come back to a settlement or a resolution that would be acceptable to you?
PUTIN: We believe and we always believed, I was and remain committed to the idea. We've been repeating this mantra over and over again. Any clashes end up in negotiations, eventually, inevitably. So the sooner the better. We always tried to push opposing parties to engage in direct contact. The first contact already took place through our mediation and unfortunately the situation is aggravated by the fact that Kiev authorities continue punitive operations in southeast of Ukraine. Military action continues. They're using artillery, heavy equipment, armoured vehicles, tanks. They shell presidential buildings, civilians die, unarmed people die. We do hope, and very sincerely so, that these direct contacts that were initiated will eventually yield some positive results. This is my true desire but a condition for such positive outcome would be putting an end to violence no matter from which side it originates.
CUTMORE: You've said we're a room full of adults, so let's have an adult conversation. President Obama has accused you as you know of untruths when it comes to supporting some of the separatist groups in the Ukraine.
PUTIN: Who is he to judge? Who is he to judge, seriously? If he wants to judge people, why doesn't he get a job in court somewhere? I don't think he accused me, it's his point of view. And I have my point of view when it comes to certain things you know. What is it that interested you about what he said?
CUTMORE: President Putin you appear to now accept that the election will take place on Sunday. At least this is what I read, but as I said to you at the beginning, I read an awful lot about what you think but I don't hear it from you necessarily directly. Can I ask you just to put this on the record for our audience here, do you accept the legitimacy of the election that is going to take place on Sunday in Ukraine?
PUTIN: Oh come on, really. He's a difficult man to deal with, where did you get the guy? We all understand and we all see that people in Ukraine want to see their country emerge from this protracted crisis. And we will have respect for the choice that the Ukrainian people will make. We will watch very closely what will happen but it would be wiser to do what President Yanukovch and opposition agreed in Kiev back on February 21st. And they agreed to hold the referendum and adopt a new constitution, and then in accordance with this new constitution, elect parliament and president. Imagine election, presidential election takes place in Ukraine today. I don't know if you know that, but in accordance with today's constitution, that would not be legitimate, because Yanukovch remains president. He hasn't been withdrawn from power legitimately, so there only four grounds. Either death, although some might have wanted him dead. Illness, impeachment, and no impeachment took place under constitution. And fourth, resignation. And president is supposed to ask resignation from parliament, so none of that happened. So according to the constitution he remains president. So why create new problems that would question the legitimacy of election? Wouldn't that be so much easier to hold referendum first? Make sure rights of people in the south and the east are protected. Explain, give them guarantees of the protection of their legitimate rights. And after that stage elections and that proper mandate and national support to rule the country. But those that are in power in Kiev today chose to do it differently. But I want to stress we want to see some appeasement of the situation, and we will have every respect for the choice the Ukrainian people will make.
CUTMORE: The frontrunner at the moment in the voting I'm told, is Mr Poroshenko. He's told CNBC that he would happily engage with Russia if elected. Is he a man that you could do business with despite his desire for stronger ties to western Europe?
PUTIN: Where is the money? Where is the money you know? It's a business forum. Let us be very specific. They owe us 3.5 billion. Give us our money back. You know that would create a very good environment for further discussions.
CUTMORE: You'll forgive me Mr President, if I have one more go on this before I move you on. But I'm not quite clear whether I heard you say that you will accept and work with the outcome of the election.
PUTIN: Like I said, and I'm not kidding and I'm not being ironic, what we want for Ukraine is peace and calm. We want this country to recover from crisis and conditions are to be created for that. We, and I'm again not being ironic. It's a sister nation and we want it to enjoy peace, order and we already cooperate with people that are in power and after the election of course we will cooperate with the newly-elected head of state. But just to make it clear I hope that after the election all military action will stop and national dialogue will begin. Imagine, just imagine, how can one engage in peaceful discussions while there are tanks shelling peaceful civilians or journalists being seized? Our journalists were detained and for three days now they've been kept somewhere, we don't know where, we're refused access to them. How can you call that proper environment for the election? We all see that this is not up to the modern democratic standards. Well, go help them. At least election happens.
CUTMORE: Can I move you on to the international reaction? I think 2009 we were all very excited to see the reset in relations with the United States. Today that reset lies in tatters. What went wrong?
PUTIN: Well, it's the result of unilateral action. There are some US allies whom you can act (?) to the principle of "if you're not with us, you're against us". You can create coalitions to justify certain actions but this is not what we do in Russia. We believe that countries need to agree on certain rules and act in accordance with international law, take on board each other's interests. And in that sense we always were and will always remain a reliable partner.
CUTMORE: So given the level of hostility at least that seems to be played out in the international media. Is there a road back in the relationship with President Obama and his current administration?
PUTIN: We never did anything to ruin our relationship and despite very rushed rhetoric and opposing approaches to some very topical matters, our cooperation continues. Our American partners announced that they were… they refused to cooperate in military domain. But look, they do really have any military cooperation. Well, we countered piracy. And we're prepared to continue to do so. And our help is needed. And Americans are interested in military transit to Afghanistan. Still are. They say we are suspending military to military cooperation. But they're not suspending transit of military cargo to Afghanistan because this is something they need and we don't refuse. We continue cooperation on the Iranian nuclear programme. I just met the Iranian President in Beijing on the sidelines of an international forum and we spoke about further joint action involving Iran, and taking onboard US position on the Iranian nuclear issue. Syria remains an important issue. And although our views diverge sometimes we still hope we will come to some agreement. Then we have common agenda confronting terrorism. This effort also continues. So we have many points of convergence that of interest to both Russia and US. We are not trying to fence ourselves out from the rest of the world. But you can't force people to like you, as we say in Russia. But we hope that common sense, good sense, and national interest will push our European and American partners to continue cooperation with United States.
CUTMORE: If I could just ask one more question on this situation now with Washington. Did President Obama misunderstand the depth of feeling in Russia about Ukraine and the situation there or was the relationship already breaking down over things like the Snowden affair?
PUTIN: Well you know, with regards to Mr. Snowden I said many times we do not have any direct relations to this problem. He turned up on our territory because of non-professional actions of the Americans themselves who tried to catch him. You know I used to work in special services why should… why did they scare the entire world? They… downed the planes with Presidents onboard and the plane with Snowden onboard. They could down anywhere. So he arrives in our transit zone and then it turned out that nobody is going to accept him. That's the problem. If they didn't scare anyone, I mean the American special services, he would fly to some other country, he would be downed in some other countries. And he would be sitting in jail some place. But they scared everyone. He stayed in our transit zone and what are we to do in that situation? Russia is not a country that is… ready to extradite fighters for human rights. And… but in reality, our reaction… well thank you for this reaction on the part of the auditorium… Mr. Snowden considers that he is a champion of human rights. He built his life around it. He is a young man. I don't know how he is going to live further. I am not trying to joke. How is he going to live further? He is sitting in Russia now. But he has chosen his fate himself. We given… we gave him a refugee. He is not our agent. He didn't give us any secrets. We gave him a refuge, but he didn't tell us anything. He tells us something when he wants to publish something – as far as … is concerned, this is of vital importance for us. While for the US, these issues relate to Ukraine were solved at a technical level and I was involved personally. As many people sitting in this room. Because for us it is vital importance, for the US it is different. But you know, the general style should be such that we should have a direct dialogue, trusting each other. Taking into account each other's interests. We are experts and following international relations. And it is everyday in the press, every day, we express concern about the expansion of NATO to the East. But nobody listen to us at all. They told us any country can choose the way of ensuring its security. Yes it is, but why do they deprive us of the opportunity to evaluate this or that set of actions from the point of view of our security? There are many ways to ensure your security. United States may enter into bilateral agreements and friendships and assistance including military assistance. What is the difference between such an agreement and entering NATO? No difference. Of course you can make members of the alliance to contribute to the general budget of the alliance but they don't do those contributions anyway. Americans are trying to push them but they… it doesn't work well. The same happens with anti-missile defense. They are telling us all the time, this is not against you. President Medvedev who did a law to not to streamline the relations with the United States. It was his initiative. Let us sign a legal paper which is worth nothing that it is not against us, just confirm what you say orally. But they disagree entirely. What kind of dialogue this is, just general words and hot air. If we find our, you know, force to take into account our military interest… but I am an optimist, I'm not losing hope. And I'm not losing confidence that the situation with Ukraine will calm sooner or later and we will find forces to streamline our relations.
CUTMORE: I'd like to move on to the economy. I'd like to talk a bit about the business conditions in Russia and how some of the sanctions that have been imposed from the West may be having an impact and I'm pleased that we have with us a panel of international business people who work very closely with Russian companies and have their own investments here. So I'd like to involve them and I would like to them to feel comfortable, also asking questions of you, perhaps you can offer some guidance to them, as to how they work here in Russia. Last year, Angela Merkel sat here on stage with you, she appeared to be bulked.. at sanctions, driven mainly from Washington. Yet ultimately, the sanctions are imposed. Today, many companies are wondering how they're going to get funding. What implications it has for the extension of credit from foreign banks. Can I just ask you very briefly just to give us your thoughts are on what the immediate impact has been so far on the sanctions that has taken place on the economy?
PUTIN: You know, I've given you my version of what's happening in Ukraine. What happened there, to a large extent, the responsibility is to be borne by our European and US partners who supported this coup d'etat, submerging this country in chaos. Now they want us to clean up for the mess they created and this is the purpose of sanctions. But now all the sanctions are to pick up… people from my immediate circle, as they say, and punish them. On their.. if I were them I would file a case in court a long time ago because they don't have any relations to the events in Ukraine or Crimea and as always … they choose two Jews and one Ukrainian. Yes, they are my friends, I am proud of having such friends. They are absolutely… patriotic and are feeling people. Their business is orientated towards our country. Yes of course, they felt the impact of those sanctions, we should be frank about that. It damaged them. But they are entrepreneurs with some experience. Before the sanctions, they moved all their money to Russia so don't be worried for them too much. But their businesses of course, sustained certain damages. I think that this is unfair and unlawful. That sanctions can be imposed on a country… that the decision of the Security Counsel of the United Nations and there is no such decision and in that sense, these sanctions are absolutely illegal and unlawful. And of course they, make our relations worse. We are now hearing about a third package of sanctions and I have a question in that regard: why? Ok. They don't like… our partners didn't like something about our… at a certain stage af the development of the crisis about Crimea… the sanctions were imposed. Now they are trying to make us to blame about something else. And they are saying there will be a second package, a third package… I don't understand why. Not long ago there was an earthquake in Thailand and people perished. Maybe we are to blame for that. But in Ukraine, civil war is breaking out. But what does this have to do with us? This is an attempt with useless means. Of course this destabilises the situation in our relations with the US and the EU. But we, in the US we… our trade turnover, we have a turnover of about 28 billion dollars, in Europe it is about 400. The difference is huge. And insisting upon sanctions with regards to Russia, I'm thinking our US, American friends want just to get certain competitive advantages in their relations with Europe. I don't see any other reasons behind that, that would be profound, and serious. But I think that common sense will prevail. And no further damage will be made to our trade relations. But we are fulfilling whatever we need to fulfil. If we take the real damage, well it does exist for the economy as a whole. How is it manifested? The access to resources for our companies has become more difficult but it hasn't done… it hasn't made a significant systemic impact on our economy and I hope it won't be the case.
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