MOSCOW (AP) - Russian President Vladimir Putin won a key victory at a summit with European Union leaders Wednesday with a promise that the EU will at last formally recognize Russia as a market economy.
The pledge by European Commission President Romano Prodi came after Putin launched their summit by saying talks with the EU have been "going around in circles," and that a key hang-up in relations has been the EU's refusal to acknowledge Russia's markets as free more than decade after the Soviet command economy collapsed.
Putin's tough stance at the summit with Russia's largest trading partner contrasted with the smile-filled ceremonies during a summit with U.S. President George W. Bush last week and the signing of a new pact with NATO on Tuesday.
Saying the "Cold War's funeral" is finally over, Putin also insisted that Russian residents and goods be allowed freer travel in and out of Russia's Baltic enclave of Kaliningrad when its neighbors Poland and Lithuania join the EU.
"Without exaggeration, one can say that how our relations with the European Union develop depends on" how this dispute is settled, he said at the start of talks in the Kremlin with Prodi and Spanish Prime Minister Jose Maria Aznar, whose country holds the rotating presidency of the European Union.
Prodi announced no concessions on Kaliningrad. At the end of the talks, he and Putin signed an agreement saying they would "continue to seek mutually acceptable solutions" to the issue.
"We are fully aware of the specific situation that this region finds itself in," Aznar said after the summit's conclusion. Prodi added: "We believe that we will resolve this problem."
Russia and the EU leaders also signed documents on energy cooperation, cooperation in fighting international terrorism, and on the conflicts in the Middle East and between India and Pakistan.
Prodi said he was "delighted to announce to you today that we are going to grant full market economy status to Russia." The EU will also "take steps" so that Russia's 7-year-old bid to join the World Trade Organization can be realized as soon as possible, Aznar said.
Putin pressed for a similar recognition of Russia's market economy from Bush, but failed to win to win any pledges. But U.S. Commerce Secretary Don Evans, who was with Bush during his visit to Russia, has said that his department is on track to rule by June 14 on Russia's request for market economy status.
Russia and the EU do a vast amount of business together. The EU takes in 35 percent of Russian exports, and that figure is expected to climb to 50 percent as the EU welcomes new member states from the former Soviet Union and eastern Europe over the next several years.
But there are some irritants. EU countries are highly dependent on supplies of Russian natural gas, and complain that the Russian government's economic policies, and the lack of reform at Russian gas monopoly Gazprom, have made export prices artificially high.
"Common rules of behavior are needed" in the energy sphere, Prodi said.
Kaliningrad poses another problem. For centuries the enclave was ruled by Germany and known as Koenigsburg - until the Soviet Union acquired it from the defeated Nazis at the end of World War II. The 1991 Soviet collapse gave neighboring Lithuania independence, cutting Kaliningrad off from the rest of Russia.
For Moscow, the enclave remains important more strategically than historically. It is home to a million Russians and retains a key Baltic Sea military base.
Kaliningrad residents have enjoyed visa-free travel through Poland and Lithuania until now, but when those nations join the EU in 2004, that will come to an end, making transit to and from Russia a much more complicated affair.
Just ahead of Wednesday's summit, Prodi officially opened the new EU office in Moscow, on a choice piece of real estate across the Moscow River from the Kremlin. Moscow police have beefed up security for the summit, particularly around the Kremlin and major tourist attractions.
Also Wednesday, Russian Defense Minister Sergei Ivanov met with the chairman of the EU's military committee, Gustav Hagglund. The two discussed possible use of Russian transport planes for EU humanitarian missions, and announced that Russia would open a military liaison office at the EU command center in Brussels.