Medvedev in Berlin

On his first visit to western Europe since succeeding Vladimir Putin as head of state last month, Medvedev said on Thursday, June 5, that a a string of rows had created rifts between Russia and the West and said his main concern was his country's deteriorating relationship with the West in general.

The new president admitted he was "worried" by a lack of "mutual understanding" in relations between Moscow and the West on security issues.

"Tendencies towards a weakening of mutual understanding worry us ... first and foremost in questions of global and European security, including US missile shield plans in Europe, the CFE (Treaty on Conventional Armed Forces in Europe) and NATO enlargement," Medvedev said.

Moscow froze the CFE treaty -- which sets limits on troops, tanks and other military hardware across the continent -- in December and is locked in a stand-off with Washington over US plans for a missile defense shield in Eastern Europe.

"The European perspective is very important to Russia," Medvedev told a press conference after meeting German Chancellor Angela Merkel. "The EU is our most important trading partner."

Both leaders said a significant step forward to a new agreement had been made. Talks on a new partnership deal begin in earnest at the EU-Russia summit to be held in Khanty-Mansiisk in Siberia at the end of June after Poland, which had a dispute with Russia over meat imports, and Lithuania which wants better relations between Russia and its smaller neighbors, lifted their objections to the proposed deal.

"I spoke out in favor of the partnership agreement between the European Union and Russia being negotiated swiftly," Merkel added.

Merkel called for more frequent meetings to be held between Russia and the NATO military alliance to try and repair the damage in relations and reopen the lines of communication between the powers involved.

Khodorkovsky and justice system discussed

The two leaders also discussed Russia's legal system, with Medvedev acknowledging deficiencies. "Our legal system is in a phase of development," he said, stressing that reform was a "key task."

But Medvedev also warned after talks with Merkel that the West had no business meddling in Russian affairs such as the high-profile case of jailed Kremlin critic and former oil tycoon Mikhail Khodorkovsky.

"Issues related to the serving of sentences should not become the subject of inter-state negotiations," he said, adding that jailed billionaire Khodorkovsky should not receive special treatment.

Khodorkovsky was found guilty of fraud in May 2005 and sentenced to 10 years in a Siberian jail, but many foreign observers have seen a political motive behind the sentence, as Khodorkovsky had backed opposition political movements. The German government has been pressing for his case to be reconsidered.

Before Medvedev was due to arrive in Berlin, Yury Schmidt, a lawyer for Khodorkovsky called on Merkel and German Foreign Minister Frank-Walter Steinmeier to raise her client's case with the new Russian president during his one-day visit to Berlin. Schmidt had previously held talks with Steinmeier during the German minister's visit to Russia in mid-May.

Unsurprisingly, considering the EU and Germany's heavy reliance on Russian gas and oil imports, Merkel and Medvedev discussed energy, along with their trade relations.

Europe's thirst for Russian energy prompts pipeline talk

To drive their cars, heat their homes and fire their businesses, German consumers and businesses burned their way through 20 billion euros ($31 billion) worth of Russian hydrocarbons last year.

Oil and gas made up almost 70 percent of Russian imports into Germany in 2007, with much of the remainder made up of metals and semi-finished goods needed by German manufacturers.

And with the German economy expanding at a respectable rate -- 1.5 percent in the first quarter -- and the government pressing ahead with plans to abandon nuclear power, Berlin's hunger for Russian hydrocarbons is set to grow.

All of which could be the reason for Merkel's desire to get Germany's neighbors onside in regard to the planned gas pipeline under the Baltic Sea which would pipe Russian gas directly to Germany.

Merkel stressed that the Nord Stream pipeline was not intended to harm anyone, despite the growing number of opposition voices. Poland, in particular, has expressed concern at being bypassed, fearing for its future energy security.

Medvedev said the pipeline, in which Russia's Gazprom has a controlling 51-percent stake, would facilitate gas supplies to "the whole European continent."

There have also been objections to the 1,200-kilometre pipeline, from Vyborg in Russia to Greifswald in Germany, on environmental grounds from Sweden and other countries.

But Medvedev, a former Gazprom chairman, assured Merkel and the rest of Europe that the pipeline was on schedule to begin pumping gas by 2011.

Two-way trade street sees Russia relying on Germany

Despite Moscow's perceived upper hand, the economic ties between Moscow and Berlin are no one-way street.

Medvedev's big-spending government badly needs hard currency from its oil and gas imports, and with inflation soaring Russia's booming economy is in dire need of German investment and goods like machines for new factories.

The German exporters' sector has not been sluggish in stepping up to the plate.

The country's firms delivered 28.2 billion euros worth of goods to Russia in 2007, a jump of 20 percent from 2006, only a whisker behind China, figures from the German statistics office showed on Wednesday.

Twenty-five percent of these "Made in Germany" products were machine goods, 17 percent were cars like Volkswagens or BMWs or auto parts from manufacturers like Bosch, and 11 percent were chemicals from German giants like BASF.

Adidas, the three-striped German sportswear behemoth, even says that by the year after next Russia could become its biggest European market, shifting even more trainers, tennis rackets and footballs there than at home.

Investment by German firms in Russia is also booming, totaling $14 billion in 2007, according to the BDI German industry association. VW for example is building a huge assembly plant south-west of Moscow.

Germans hoping for a less confrontational Russian leader

But German firms are also wary of investing in Russia, and companies will be listening keenly for comments from Medvedev suggesting Russia will become more business-friendly than it was under his predecessor and current Prime Minister Vladimir Putin.

German politicians are also hoping for an end to the kind of rhetoric Putin used on global security. At the 2007 Munich Security Conference Putin reawakened memories of the Cold War by accusing the United States of seeking to lead a "unipolar world" and of adopting a "very dangerous" foreign policy.

With that in mind, Medvedev's speech on foreign policy to the German-Russian Forum later Thursday, where he would address major international themes for the first time since he took office, was being keenly awaited for signs he may take a less confrontational course than that of his predecessor.