VZCZCXRO6145
RR RUEHAG RUEHROV RUEHSL RUEHSR
DE RUEHHE #0402/01 3021111
ZNY CCCCC ZZH
R 291111Z OCT 09
FM AMEMBASSY HELSINKI
TO RUEHC/SECSTATE WASHDC 5233
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 5015
RHEHNSC/NSC WASHDC
RHEFDIA/DIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 HELSINKI 000402 
 
SIPDIS 
 
NSC FOR J.HOVENIER 
 
E.O. 12958: DECL: 10/28/2019 
TAGS: FI PREL EPET ETRD WTO RS
SUBJECT: FINLAND: PUTIN WARMS UP IN LATEST MEETING WITH 
VANHANEN 
 
REF: 09 HELSINKI 211 
 
HELSINKI 00000402  001.2 OF 002 
 
 
Classified By: DCM Michael A. Butler for reasons 1.4(b) and (d) 
 
¶1. (C) SUMMARY.  In a dramatic departure from their meeting 
last June, on October 25 Russian Prime Minister Putin warmly 
greeted Finnish Prime Minister Vanhanen in St. Petersburg. 
Describing Finland as a good partner, a smiling Putin put a 
positive face on Finnish-Russian relations.  Putin pointed to 
progress on several bilateral matters, and announced the 
extension of Russia's suspension of an export duty on 
roundwood, important to Finland's paper industry.  Putin 
thanked Vanhanen for its decision regarding the Nord Stream 
project even though the Finnish government has not completed 
its environmental review. Putin also raised some topics on 
his own, unusual for his meetings with Vanhanen, including 
Russia's WTO membership and the environmental health of the 
Baltic Sea.  He spoke positively about the South Stream 
pipeline project, and about decreased demand for natural gas 
possibly impacting Russian plans related to liquified natural 
gas. The Finns found few concrete matters issuing from the 
meeting, but they welcomed the change in tone.  END SUMMARY. 
 
¶2. (C) In an October 28 meeting with Pol/Econ chief, Prime 
Minister Vanhanen's Senior Advisor Esko Hamilo described a 
much warmer meeting between PM Vanhanen and Russian PM Putin 
in St. Petersburg on October 25 than occurred last June 
(reftel).  Hamilo spoke of an "excellent" atmosphere, a 
distinct departure from the "bitter and unpleasant" 
atmosphere in the June meeting; a "smiling Mr. Putin" was 
very "forthcoming and understanding" and raised some 
unexpected topics on his own, like Baltic Sea and 
environmental issues (see below).  As an example of Putin's 
changed attitude, Hamilo noted that a cross-border child 
custody case proved to be a source of obvious irritation for 
Putin last June, but when a Finnish journalist raised it on 
October 25 Putin dismissed the case as having no impact on 
bilateral relations. (NOTE: Hamilo said Finnish officials 
have observed a similar warming in meetings with other 
Russian officials, in particular on the topic of energy.  He 
speculated that the global downturn has forced a lighter and 
less high-handed approach.  END NOTE.) 
 
¶3. (C) At the start of the meeting Putin praised Finland as a 
good partner of - and good investor in - Russia before 
launching into an extended monologue that addressed several 
matters: 
 
- NORD STREAM:  As with the last 3-4 bilateral meetings, Nord 
Stream started the discussion though this time Putin only 
devoted approximately five minutes to the pipeline project. 
Oddly, Putin thanked Vanhanen for the government's (GOF) 
decision, even though the GOF has not completed its 
environmental review.  Putin clearly had the impression that 
the GOF would render a positive decision.  (NOTE: Vanhanen 
has stated publicly that the GOF likely would conclude its 
environmental review in October.  END NOTE.)  Putin then 
spoke briefly about the South Stream pipeline and 
negotiations with the government of Turkey.  Hamilo took this 
reference as a signal that as the South Stream project was 
progressing, Nord Stream was becoming less important. 
 
- BILATERAL PROGRESS: Putin highlighted progress on smaller 
bilateral matters like a fast train connection.  He also said 
that Russia would extend for another year its 2008 decision 
to suspend its roundwood export duty, and indicated that 
another extension would follow for 2011.  According to 
Hamilo, the Finns feel the Russian government realized its 
mistake in raising the duty, as Finnish companies froze plans 
to invest in the Russian forestry industry and the industry 
has collapsed in the Karelia region of western Russia; the 
Russians might be looking for a way to climb down from their 
position. 
 
- BALTIC ENVIRONMENT: Putin expressed interest in the 
Helsinki Commission's (HELCOM) Baltic Sea Action Summit in 
¶2010.  He promised to look into problems surrounding plans to 
construct a water treatment plant in Kaliningrad (a concern 
to the Finns due untreated sewage entering the Baltic). 
 
- WTO: Putin was very forceful in stating Russia's intention 
to join the WTO.  This surprised Hamilo, as he has found 
other Russian officials to be more dismissive of Russia's 
membership.  Putin said Russia could not neglect its customs 
union with Belarus and Kazakhstan, but said that the union 
should not pose an insurmountable obstacle under WTO rules 
(Hamilo described this as a "where there's a will there's a 
 
HELSINKI 00000402  002.2 OF 002 
 
 
way" argument). 
 
- CLIMATE CHANGE: Putin assured Vanhanen of Russia's 
intention to attend and to play a constructive role at the 
Copenhagen Summit, and afterwards.  He spoke broadly of the 
need for "balance" between developing and developed 
countries, and said that "greater polluters bear greater 
responsibility."  He also asserted that Russia has done more 
than would be required under Kyoto. 
 
¶4. (C) Following Putin's monologue, Vanhanen ran through his 
points.  He explained - again - the GOF's ongoing 
environmental review of the Nord Stream project.  He voiced 
his satisfaction that Russia would extend the wood duty and 
that it would participate in the Copenhagen Summit.  He also 
expressed Finland's hope that Russia would join the WTO. 
 
¶5. (C) Vanhanen asked about Russia's intentions regarding the 
Shtokman gas field in the Barents Sea.  Putin said Russia had 
not changed plans regarding the field, then quickly turned to 
the status of South Stream again.  He later commented on how 
overall demand for natural gas had decreased, which might 
impact Russian plans related to liquified natural gas. (LNG). 
 Hamilo speculated to Pol/Econ chief that Putin actually 
might have been signaling a re-thinking of their plans for 
Shtokman: to the extent the Russians considered the field as 
a source of LNG for the US market, their interest might be 
waning following identification of gas fields in the US 
(though Hamilo also thought the Russians currently are  more 
interested in the Yamal fields). 
 
¶6. (C)  Hamilo concluded that other than the rollover of the 
suspension of the roundwood duty the Vanhanen-Putin meeting 
offered nothing concrete.  He stressed that the change in 
tone was a huge advance over the prior meeting.  Between now 
and the next bilateral meeting - tentatively scheduled for 
May 2010 - the Finns will see whether a warmer atmosphere 
translates into positive action. 
 
ORECK