European Union and Russia seek to ease disputes at summit

EU and Russian leaders met yesterday for a summit clouded by the eurozone's troubles but striving to iron out habitual disputes on issues ranging from visas to human rights.

Russia, whose economy went into near meltdown in 1998 but has so far avoided the worst effects of the financial crisis, is looking with interest at Europe's economic woes triggered by the budget problems of Spain and Greece.

The summit in the southern city of Rostov-on-Don is the first between Russian President Dmitry Medvedev and EU President Herman Van Rompuy, leading the EU after the Lisbon Treaty took effect last year.

They were joined for an informal dinner by EU foreign policy chief Catherine Ashton and European Commission chief José Manuel Barroso, at what is the 25th EU-Russia summit.

The Moscow-EU partnership has rarely been smooth but the two-day summit is set to gloss over geopolitical disputes and focus on easing bumps in ties over trade, visas and EU concerns about its reliance on Russian energy supplies.

A priority is that of "continuing dialogue on the chances of abolishing visa restrictions, the presence of which has a destructive effect on all spheres of Russia-EU cooperation," the Kremlin said in a statement. Talks should aim to move to a "concrete draft agreement on cancelling visa requirements", it said.

Russia, which has long sought to have visa-free travel for its citizens to Europe, has voiced increasing irritation over visa barriers while insisting the EU's immigration problems are at its southern, not eastern borders.

The Kremlin is also eager for EU investment and technology know-how in modernising Russia's economy after the crisis showed up its dependence on oil and gas exports.

But the summit comes as the EU faces deep internal divisions over the Greek debt crisis and a sagging euro - developments that have not gone unnoticed by Russia, which holds near half of it massive reserves in euros.

"The EU is living a critical moment in its history," Russian Deputy Foreign Minister Alexander Grushko told reporters on Friday.

"We are closely watching how it strives to deal with the financial crises that have assailed several member states."

Energy security will also be a key issue, the Kremlin said, as Russia's role as the EU's dominant supplier comes in doubt due to Europe's potential for shale gas exploration and its worries over the reliability of Russian supplies.

The EU and Russia are championing two competing pipeline projects - Nabucco and South Stream - to pump gas to Europe in the future. Both want to avoid a repeat of disruptions caused by gas-pricing disputes between Moscow and Kiev.

Russia now supplies a quarter of the gas consumed in the European Union, with most of it transiting Ukraine.

Nevertheless, experts said the atmosphere of this EU-Russia summit would be less contentious than in recent years, following Mr Medvedev's statement in an April interview that Russia must show a "smiling" face to the world.

Past summits were marred by spats over issues such as human rights abuses in Russia, gas deliveries, the August 2008 war in Georgia and Moscow's ire at perceived EU encroachment into its former Soviet fiefdom.

Not least in dispelling tensions are Moscow's warmer ties with Kiev since a pro-Russian President came to power in recent polls.

At the summit the EU is looking to make headway on trade disputes with its biggest energy partner, including anti-EU tariffs on timber exports and fees for trans-Siberian overflights.

Brussels is also expected to push Moscow on its efforts to join the World Trade Organisation.