Rights concerns overshadow trade ties on Putin's European trip

By Steve Gutterman and Alexandra Hudson

MOSCOW/BERLIN (Reuters) - Growing Western concerns about Vladimir Putin's record on human rights and democracy could mean a chilly reception for the Russian president on a trip to Germany and the Netherlands, Moscow's biggest trade partners in Europe.

The nations need Russia for energy and as a market for exports ranging from Volkswagen Touaregs to tulips, but are uneasy about the influence its oil and gas give it and about Putin's treatment of opponents and activists in his new Kremlin term.

A wave of state inspections of foreign-funded non-governmental organizations (NGOs) in Russia, including two German think-tanks, has drawn warnings from Berlin and sharp criticism from the European Union.

The inspections - along with Russian criticism of the German-orchestrated financial bailout of Cyprus and persistent differences over Syria's civil war - are likely to undermine upbeat messages on a trip meant to be mainly about trade.

Putin, who began his six-year third term as president last May, is to attend an industrial trade fair in Hanover with German Chancellor Angela Merkel on Sunday and Monday, then head to Amsterdam.

Germany gets 30 percent of its oil and 40 percent of its gas from Russia, making it one of state-controlled gas export monopoly Gazprom's largest energy buyers. German investment in Russia is worth some $30 billion.

But Merkel is under pressure to criticize Putin over the NGO inspections and other steps Kremlin opponents say are designed to silence dissent.

"The situation in Russia has nothing to do with democracy any more. What you are experiencing there is the despot Putin," Claudia Roth, joint leader of the German Greens party, told Die Welt newspaper.

Andreas Schockenhoff, a lawmaker from Merkel's Christian Democrats (CDU), said Putin's policies were destroying Russia's hopes of becoming a modern, competitive economic power.

"Intimidation of NGOs and civil society is fatal to Russia's future and its competitiveness," he told Reuters.

Putin, in an interview with German broadcaster ARD, dismissed criticism of the NGO inspections and said they would not cast a shadow over the visit, echoing his repeated rejection of Western worries about his domestic policies.

"It is you that is scaring the German public," he said, adding there was nothing unusual about a law he signed last year requiring foreign-funded NGOs to register as "foreign agents" - a term that to many evokes Soviet-era oppression and espionage.

GAS DIPLOMACY

Putin - a former Soviet KGB officer who was stationed in East Germany, where Merkel grew up - has accused Western states of using NGOs to spy on Russia and influence politics.

He said in the interview that Russians have a right to know which NGOs are foreign-funded "and for what purposes".

He sent warmer signals on economic issues, expressing confidence in the euro and toning down criticism of the Cyprus bailout by saying he hoped more money would flow into Russia as a result.

Putin courted the Netherlands in an article for Dutch paper De Telegraaf, mentioning Tsar Peter the Great's close ties with the country 300 years ago and ending with a reference to "this beautiful land of tulips".

The Netherlands is Russia's biggest bilateral trade partner after China.

Dutch investment in Russia is double that of Germany -- but largely because many foreign companies register holdings in the Netherlands due to favorable tax rules.

The Netherlands is important to Russia's drive to expand gas supplies and - echoing Peter the Great's use of Dutch expertise to wrench Russia into modernity - as a source of the know-how it needs to tap hard-to-recover energy reserves.

The Kremlin said on Thursday that Gazprom Neft and Royal Dutch Shell would agree during the visit to drill for shale oil in Siberia and explore Russia's Arctic shelf.

It confirmed plans for an agreement with Dutch firm Gasunie to expand Gazprom's supply network to western Europe.

Putin is to meet Dutch Queen Beatrix and Prime Minister Mark Rutte, who told journalists on Friday that he plans to discuss issues including NGO inspections, gay rights and the posthumous trial of whistleblower Sergei Magnitsky, which has deepened Western concerns about justice and the rule of law in Russia.

"I will again point out that for a country such as Russia, which is growing, which has big ambitions economically ... it is of great importance to have a stable legal system because that is in the interest of stable investments," Rutte said.

(Additional reporting by Alexei Anishcuk and Lidia Kelly in Moscow, and Sara Webb and Gilbert Kreijger in Amsterdam; edited by Richard Meares)

Source: http://news.yahoo.com/rights-concerns-overshadow-trade-ties-putins-european-trip-040744411.html

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