Putin hails EU ties, defends Chechnya campaign

Russian President Mr Vladimir Putin won a promise of European Union loans and support for closer cooperation in talks with EU…

Russian President Mr Vladimir Putin won a promise of European Union loans and support for closer cooperation in talks with EU leaders on today, but was forced again to defend Moscow's military drive in Chechnya.

Mr Putin, a former KGB spy and ex-head of a KGB successor agency, avoided being probed too deeply on his attitude to an espionage row with the United States, but indicated he saw it as unlikely to sour US-Russia ties too much.

"Today's situation in Europe is really unique. All the countries of Europe are united by common democratic principles. We are not divided by ideological walls or political barriers," Mr Putin told a news conference after the meeting.

The summit was the first of its kind as Mr Putin joined the 15 EU chiefs for informal talks at a working lunch. He later left Sweden and headed back to Moscow to prepare for a summit on Sunday with Japanese Prime Minister Mr Yoshiro Mori in Siberia.

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Mr Putin achieved an agreement in principle by the EU to lend Russia up to 100 million euros for pollution clean-up projects.

The EU also announced in Brussels it was dropping some punitive import duties on certain Russian metals, part of anti-dumping steps which Mr Putin had only hours earlier complained about as costing Russia 2.5 billion a year.

Amid all the talk of economic cooperation, Chechnya came back to haunt Mr Putin as the EU leaders questioned him on the military campaign in the region, where large-scale fighting has ended but clashes between Russian forces and rebels continue.

"A genuine (EU-Russian) partnership must be based on common values. The EU wants to engage Russia, not to exclude Russia from the process of European integration," said Swedish Prime Minister Mr Goran Persson told a joint news conference with Mr Putin.

Neither leader went into allegations of continuing human rights abuses by the military in the Chechnya region.

Mr Putin conceded there were problems but said Russia was doing its best to solve issues like the return of tens of thousands of refugees from neighbouring regions to their homes in Chechnya and trying to tackle rampant unemployment.

A row with the United States after Washington said it would expel 50 Russian diplomats had clouded Mr Putin's arrival at the summit, although he played down the issue when questioned.

Asked how he viewed the spy row, he said: "I have no particular opinion about that."

Asked if the dispute would cause serious tension in relations, he replied: "I do not think so."