Taking a tougher approach than during meetings with President Bush or NATO, President Vladimir Putin won a major victory in Moscow yesterday when the EU agreed to recognise Russia as a market economy.
But relations between Russia and its biggest trading partner remain tense as the Kremlin fears EU expansion will infringe on Russia's Baltic enclave Kaliningrad, isolating the lonely outpost even more from the Russian mainland.
The EU is also pressing Russia to use its position straddling Europe and Asia to crack down on illegal immigration, an issue that dominates voter concern throughout western Europe, and to move quicker in reforming its monopolistic gas market.
"At present, we are witnessing only the beginning of real, mutual co-operation," the President of the European Commission, Mr Romano Prodi, said at the end of the Moscow summit.
"We can get closer."
Mr Putin, who has aggressively pursued closer ties with the West since the September 11th attacks, opened the summit by complaining that talks with the EU have been "going around in circles", particularly the EU's refusal to acknowledge Russia's markets as free more than a decade after the Soviet command economy collapsed.
The criticism was in sharp contrast to Mr Putin's friendly talks with a visiting Mr Bush in St Petersburg last weekend, and the harmonious ceremony on Tuesday when Russia became a junior partner in NATO, the military alliance created more than a half century ago to contain Moscow.
But the mood of the EU summit was lightened early on when Mr Prodi announced the EU's intention to grant Russia market status.
The announcement was met with considerable applause, and was followed later by a pledge from the Spanish Prime Minister, Mr Jose Maria Aznar, that the EU will "take steps" to support Russia in its seven-year bid to join the World Trade Organisation.
"It is very clear that Russia's economy is developing as a market economy," said the Spanish prime minister.
Spain currently holds the rotating six-month EU presidency.
Mr Putin pushed for similar pledges from Mr Bush during his summit earlier this week, but came away empty-handed despite the smiles and friendly words.
The Bush administration is expected to consider the issue of granting Russia market economy status next month.
One key area that Russia and EU leaders were not able to agree on was Kaliningrad, an enclave that the Soviet Union acquired from the defeated Nazis at the end of the second World War.
Russia fears that Kaliningrad will be completely shut off from the mainland when its neighbours Poland and Lithuania join the European Union.
Now, residents are allowed visa-free transit through those countries to Russia, but all that will end with the enlargement of the European Union in 2004.
"Without exaggeration, one can say that how our relations with the European Union develop depends on" how this dispute is settled, Mr Putin said.
Mr Prodi and Mr Putin signed an agreement saying they would "continue to seek mutually acceptable solutions" to the issue.
(AP)