Russia and EU try to rebuild confidence

BBC NEWS. By Oana Lungescu. BBC News, Nice

For 200 years, the French Riviera has been the playground of Russia's rich and famous.

In the footsteps of Chekhov and Lenin, tsars and oligarchs, President Dmitry Medvedev arrived in Nice for talks with his French counterpart, Nicolas Sarkozy, and European Commission President Jose Manuel Barroso under a cloud - his August war with Georgia.

But in the sumptuous surroundings of the 16th Century Palais de la Prefecture, Mr Medvedev and his hosts will try to restore a relationship riven by suspicion.

Ahead of the meeting on Friday, the Russian leader went further than expected, telling a business conference in Cannes that Russia and Europe would "speak with one voice" at this weekend's G20 finance summit in Washington.

That could help President Sarkozy push for rapid reforms of a free-market regulatory system. But it is also a signal that Russia wants to push the row over Georgia into the background and focus instead on joint economic interests.

Trade rows

Mr Medvedev said he hoped for a fresh impetus to talks on a partnership and co-operation agreement, postponed by EU member states after the war in the Caucasus.

But EU officials insist that the resumption of the talks, agreed earlier this week despite concerns from Lithuania, should not be seen as business as usual.

EU External Relations Commissioner Benita Ferrero-Waldner told the BBC it was important to "build confidence again, because naturally confidence has suffered because of the Georgia crisis".

The bloc says the continuing violation of Georgia's territorial integrity remains unacceptable and is pressing Russia to allow international monitors into the breakaway regions of South Ossetia and Abkhazia.

But Russia's permanent representative to the EU, Vladimir Chizhov, appears confident the crisis is over.

Relations, he told the BBC, "should not be business as usual - they should be better than usual because there is a lot of untapped potential in developing Russia-EU relations on all fronts".

Indeed, despite political uncertainties, business continues to boom.

Russia remains a vital energy supplier and the EU's third largest trading partner, while Europe is the biggest foreign investor in Russia.

Offering a concession ahead of the summit, Moscow said it would delay for up to a year a huge increase on timber taxes, which could cost jobs in Europe.

But EU officials complain that a long list of other trade rows remain unresolved.

And, in another significant move on the eve of the summit, the European Commission's president outlined a major overhaul of its energy policy to reduce its dependency on Russia.

Mr Barroso said he wanted to send Moscow a "positive message of inter-dependency".

The plan, he said, was "not against any country, but a fundamental matter of prudence".

Straight after the talks in Nice, the Russian and French presidents will fly to Washington for the G20 summit. But whatever degree of co-ordination they achieve here, they will be taking different planes.