Merkel says Russia ties stronger than `controversies'

17:30, 10 September 2008
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``Russia needs customers and we need deliveries..."

Chancellor Angela Merkel said that Germany and Russia are bound by common ties stronger than any ``controversies`` that may divide them, a reference to Russia`s military incursion into Georgia last month which she condemned, according to Bloomberg.

Merkel, addressing an event in the eastern German city of Leipzig today marking 50 years of the natural gas company VNG Group, said that ``long-term gas contracts are based on mutual interests`` and not a one-sided relationship.

``Russia needs customers and we need deliveries, and that goes also for the European Union,`` Merkel said. ``I see many future opportunities. Of course we have controversies, yet we have shared interests, and we should cement these links and make them more binding.``

Merkel`s comments reflect Germany`s political and economic engagement with Russia that began in the 1960s and reached its zenith under her predecessor Gerhard Schroeder. The former chancellor is now co-head of a joint venture with Russian state- owned gas monopoly OAO Gazprom that`s building a Baltic Sea gas pipeline connecting Russia and Germany.

German exports to Russia rose 20 percent in 2007 to $42 billion, making it Russia`s No.1 EU trading partner. Germany in turn relies on Russia for 40 percent of its gas imports and about 35 percent of its oil.

Gazprom Chief Executive Officer Alexei Miller, addressing the same event, said that Russian gas supplies to Europe will continue without interruption.

`Reliable` Gazprom

``Our deliveries have always been reliable, I want to assure you that this will remain so in the future,`` Miller said in remarks translated from the Russian. ``We take our responsibilities very seriously, right along the line from upstream to delivery.``

Russia has cut natural gas exports to Ukraine over pricing disputes twice in the last three years. Gazprom halted shipments of natural gas to Belarus for about a day in February 2004, also during a disagreement over pricing.

Russia stopped shipping oil by pipeline to EU member Lithuania through the Druzhba pipeline after a spill in July 2006. Lithuania called the closure politically motivated, a charge rejected by Russia`s oil pipeline monopoly OAO Transneft, which said it stopped supplies because of pipeline defects.

Russian oil shipments to the Czech Republic dropped in July after the Czech government agreed to host a radar site for the U.S. missile defense system. Russian officials said the reasons for the drop were commercial.


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