beyondbrics

It could have been an opportunity to crow about the eurozone crisis. But Vladimir Putin was in a friendly mood when he met François Fillon, his French counterpart, on Friday for talks aimed at expanding Russia’s business ties with Europe’s second biggest economy.

France has made deep inroads in the Russian economy, investing in energy, banking, the railways and high tech. Alstom the French engineering group, clinched a deal with RusHydro, the Russian hydroelectricity producer, to modernise a power plant in Russia’s far east.

The deal adds to the French company’s large portfolio of projects in Russia where it is building railway locomotives and introducing a smart grid.

Putin appeared open to more French investment, giving his blessing for Total, the French oil group, to participate in the giant Shtokman gas development with Gazprom and Statoil. He agreed with Fillon that a long delayed investment decision should be taken at Shtokman by the end of the year.

There was one catch. While French companies have landed huge contracts in Russia, Russian companies have made little headway in France and should be given a chance to catch up.

“The investment potential of Russian companies is growing, it amounts to hundreds of billions of dollars, we are ready for this work, – we only need extra work at government level from both sides,” Putin told Fillon.

Meanwhile, the usually mild-mannered Dmitry Medvedev, took a swipe at the European Union while meeting with the presidents of Kazakhstan and Belarus, to sign a declaration founding the new Eurasian Union.

Putin announced plans last month to create the Eurasian Union to revive Soviet era economic ties and serve as a counterbalance to the EU.

In an outspoken statement, Medvedev implied the EU was a shambles compared to the Eurasian Union that brought together “three countries with a common history and a common past” to create a “new economy.”

“The Eurasian Union is not like the European Union a conglomerate of uncoordinated countries that use the Euro as a payment method.”

Kazakhstan gave up its bid to host the headquarters of the Eurasian Union on Friday, saying Moscow was a more worthy location.

So while it is too soon to say what benefits the Eurasian Union will bring to its members, it is clear Moscow will be firmly in charge. As Fyodor Dosteovsky once wrote about Russia, “In Europe we are toadies and slaves but in Asia we will be Europeans.”

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