St Petersburg International Economic Forum

President Putin extends olive branch to European Union

Russian President Vladimir Putin extended an olive branch on Friday to the European Union (EU), whose sanctions on Moscow are up for renewal in July.

"The European Union … remains the key trading partner of Russia. It is our closest neighbor … and of course we do care about what is happening in our neighboring states," Putin said in a conference at the St. Petersburg International Economic Forum (SPIEF) in Russia.

Relations between Russia and the West have deteriorated since the EU and U.S. imposed sanctions on Moscow after its incursion in Crimea in 2014 and its alleged role in the pro-Russian uprising in eastern Ukraine. Russia responded with counter-sanctions on European and U.S. food imports.

"Russia did not initiate the … downturn in relations … We do not hold a grudge against anybody," Putin said.

Italian Prime Minister Matteo Renzi shared the stage with Putin on Friday, in a move that was criticized by some EU countries – typically those on Russia's border – that strike a hard line on Moscow.

"It is obvious there are problems in the relation between Europe and Russia ... and each has their own opinion of where it stemmed from," Renzi said in his own speech on Friday.

Come July, EU diplomats say sanctions may be softened but extended by a further six months, according to media reports. There are signs of disagreement among EU members, with Baltic countries on Russia's borders typically keener on maintaining tough sanctions, while countries like Greece have flagged the possibility of tailing them off. Consensus between all 28 EU member states is necessary to extend sanctions before they expire in July.

Vladimir Putin
Ivan Sekretarev | Pool | CNBC

The U.S. is seen as unlikely to lift sanctions on Russia soon, as it is adamant Moscow must first take measures to bring about peace in eastern Ukraine.

On Friday, Putin said the U.S. was pushing the EU to continue with sanctions, although Renzi insisted EU countries had decided this for themselves.

"The U.S. has not suffered from the sanctions in anyway… but the Americans persuade their partners to continue their sanctions," Putin said.

He attributed geopolitical tensions to economic uncertainty and slower growth in the aftermath of the global financial crisis of 2008.

"To relaunch growth is not yet an achievement … It is our common interest to find a way out of this situation," he said.

Also speaking alongside Putin was Kazakhstan President Nursultan Nazarbayev. SPIEF is sometimes referred to as "Russia's Davos" and is attended by the country's political and corporate elite. Foreign visitors this year included Alibaba Chairman Jack Ma, who attended Putin's conference.