Russia Repays Debt to Germany Early Tue Sep 3,12:29 PM ET By BURT HERMAN, Associated Press Writer
MOSCOW (AP) - Russia made this year's payment on its Soviet-era debt to Germany early to help pay for billions of dollars in damage from summer floods, President Vladimir Putin ( news - web sites) said Tuesday.
Moscow had already paid $172.1 million earlier this year, and owed another $172.1 million by Dec. 31, but Putin said the latter sum was transferred to Germany late last month.
The money "will be needed in Germany to help ease the consequences of the floods," Putin said during a meeting with German President Johannes Rau in the Kremlin as part of a state visit. "We didn't want to wait until the end of the year."
Putin also said he hoped the early payment would bolster Russia's credit rating.
Russia was able to pay the money because of an unexpectedly good harvest that resulted from the long, hot summer, German officials said.
Putin expressed his condolences to Rau for the damage caused by flooding this summer in Germany and thanked him for the Germans' sympathy for Russia's own flood losses in its Black Sea region, where 59 people were killed.
The good-faith payment underscores the friendly relationship between Russia and Germany, which has grown closer under Putin because of his knowledge of the country and its language. Putin was a KGB agent in the former East Germany.
Germany is Russia's top trade partner, and Putin said trade between the two countries has grown 80 percent in the past two years to $25 billion. He said there is still room for improvement, citing Germany's No. 5 ranking in direct investment in Russia.
One issue the two didn't discuss was the allowance of free travel for residents of Russia's Kaliningrad exclave once its neighbors — Poland and Lithuania — join the European Union ( news - web sites).
Russia is worried that residents of Kaliningrad will need visas to travel to Russia. The European Union has said it would expedite visa procedures for Kaliningrad residents, but Russia is pushing for visa-free transit corridors — comparable to those used for travel between enclosed West Berlin and the rest of Germany during the Cold War.
Rau, who is not involved in those talks, said he hoped a solution could be reached by the end of the month that meets "European interests and recognizes Russian rights."
In Berlin, the two countries' interior ministers met Tuesday and also talked about Kaliningrad. Germany's Otto Schily said a solution could rely on high-tech means of identifying Russian citizens who would be allowed move through EU territory.
Rau also raised the issue of the Kyoto climate change accords. Russia is a key holdout on ratifying the agreement. Putin said "we intend to sign it," but gave no timeline and said experts were still reviewing the documents.
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