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Nuclear News - 05/22/01
RANSAC Nuclear News, May 22, 2001
Compiled by Kelly Turner

A. Plutonium Disposition
    1. Change in Plutonium Disposal Plan Draws Complaints, Matthew L. Wald, New York Times (05/20/01)
B. Nuclear Waste
    1. Radioactive Corner of Russia Could Grow More So Under Plan, David Filipov, Boston Globe (05/2101)
C. Russian - Iranian Cooperation
    1. State Department Daily Briefing - Excerpt (05/21/01)
D. Russian - Indian Cooperation
    1. Indian Defence Minister to Visit Russia, Itar-Tass (05/22/01)
    2. Feasibility Study of Russia-India Atomic Power Plant Drawn Up, Stanislav Bychkov, Itar-Tass (05/22/01)
E. HEU Enrichment Deal
    1. Letter from Congressman Ted Strickland to Vice President Richard Cheney (05/15/01)
F. U.S. - Russian Relations
    1. Schroeder, Bush Oppose Aid to Russia Now -Magazine, Erik Kirschbaum, Reuters (05/19/01)
    2. Putin Calls Report of German-U.S. Snub 'Provocation', Peter Graff, Reuters (05/22/01)

A. Plutonium Disposition

Change In Plutonium Disposal Plan Draws Complaints
Matthew L. Wald
New York Times
May 20, 2001
(for personal use only)

The Bush administration has postponed a major part of the Energy Department's plan to dispose of plutonium left over from nuclear weapons production, because of budget constraints and technical problems.

But two states, South Carolina and Colorado, are complaining that the decision violates the federal government's agreements with them to clean up nuclear wastes.

Five years ago, the Energy Department, which manages the nuclear stockpile, set out to get rid of 52.5 tons of weapons plutonium as part of a deal with Russia, which agreed to remove the same amount from its stockpile. The plan was to convert some of the plutonium from warhead form into fuel for civilian power reactors.

But much of the plutonium is in forms not suited for fuel, including a large quantity at the Rocky Flats plant, in the suburbs of Denver.

The plan was to bake that plutonium into a ceramic to stabilize it and then to embed it in highly radioactive glass, to protect it from being stolen for weapons use.

The first part of that plan is moving ahead, although the costs of making reactor fuel are uncertain. But instead of immobilizing the rest of the plutonium in glass, the Energy Department now plans to ship it to the Savannah River Site, near Aiken, S.C., and seal it in storage containers.

Gov. Jim Hodges of South Carolina said this violated an agreement with his state.

"They committed that they would not send it to us unless there was a clear exit strategy for the plutonium," Mr. Hodges said.

Recalling that Cecil D. Andrus, then governor of Idaho, threatened to call out the state police in the late 1980's to block a shipment of nuclear waste to the Idaho National Engineering Laboratory, Mr. Hodges said, "We have troopers in South Carolina, too."

In December 1996, when the Energy Department announced its "dual track" approach of conversion to fuel and immobilization, officials said that they were not sure which approach would prove the fastest, easiest or most economical, but that the prudent step was to do both.

That policy has changed. Two top officials of the agency, speaking on the condition that they not be named, said that getting anything done required concentrating all efforts on one approach.

Conversion to fuel requires two factories, they said: one to take apart the plutonium at the heart of the warheads and another to turn it from metal to oxide and process it into the proper shape. Immobilizing plutonium would require a third factory.

"We're not so sure Congress can support pursuing three significant facilities simultaneously," one of the officials said.

The department estimates that the immobilization work being put off would cost between $500 million and $1 billion.

At a hearing last month, John A. Gordon, the under secretary of energy for nuclear security, noted that the budget request for the Energy Department's weapons program next year was $100 million less than in the current year.

The Energy Department's plans also trouble some officials in Colorado, who are eager to have the department meet its target of shipping all the plutonium at the Rocky Flats factory out of the state by 2006.

Groups that focus on nuclear proliferation are even more concerned. Tom Clements, the executive director of the Nuclear Control Institute, a nonprofit group in Washington, said technical problems could arise with the plan to use plutonium in civilian power reactors; for example, the reactors might have problems being relicensed for the fuel. But, he said, "immobilization could perform the entire mission, and do it cheaper."

There is a technical problem, however, with the process for embedding the plutonium in highly radioactive glass. The Energy Department built a $2 billion factory at the Savannah River Site to mix radioactive sludge from its aging underground tanks with molten glass, solidifying the sludge and storing it, perhaps eventually in a proposed repository at Yucca Mountain, Nev.

But the glass is not as radioactive as it is supposed to be to prevent anyone from recovering the embedded plutonium. The recipe the agency wanted to use created benzene, a gas that can burn or explode. Until it can solve this problem, the department has changed the recipe, resulting in finished glass that is not radioactive enough.
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B. Nuclear Waste

Radioactive Corner Of Russia Could Grow More So Under Plan
David Filipov
Boston Globe
May 21, 2001
(for personal use only)

MUSLYUMOVO, Russia - The Techa River, the main source of water for this Ural Mountains farming community, flows through ground zero of one of the most contaminated places in the world. It is a living reminder of a legacy of devastating nuclear accidents, careless handling of highly toxic radioactive waste, and official coverups that have earned the Chelyabinsk Region the epithet "the blackest spot on earth."

Now, Russia is moving toward a scheme to raise cash by accepting other countries' spent nuclear fuel for storage and reprocessing here, and people are worried that their already badly contaminated homeland will be transformed into a nuclear dump for the rest of the world.

Under the plan, which won preliminary approval from Parliament last month, Russia would earn up to $20 billion over 10 years by importing 22,000 tons of spent nuclear fuel. Part of the income would be used to improve the safety of Russian nuclear facilities and clean up contaminated sites such as Muslyumovo.

Shipments may already have started. Greenpeace activists in St. Petersburg said this month that up to 20 trainloads emitting large amounts of radiation had passed through the city since January. The environmentalist organization alleged that the trains were carrying spent nuclear fuel from Germany. Russian atomic energy officials declined to comment.

Government officials and scientists from Russia's nuclear energy industry say they have the technology to safely store and dispose of the spent nuclear fuel rods that Russia would import under the plan. But people here fear the plan will only make their plight worse. It is easy to see why.

Because the Chelyabinsk region is home to Mayak, the only functioning plant in Russia that can reprocess nuclear fuel, and one of only three storage facilities, people here assume that their region will receive at least some of the waste.

Radioactive rivers, lakes, forests, and fields bear silent witness to the mess left over from the Mayak nuclear plant's five decades of producing weapons-grade plutonium for the Soviet nuclear arsenal. For years, the Mayak plant dumped its nuclear waste into the Techa River. In 1957, an explosion at the plant's storage facilities spread deadly waste over hundreds of villages. In 1967, a windstorm carried radioactive dust from a dried-out lake over more towns and villages.

Because Mayak made nuclear weapons, the Soviet government classified all the plant's activities, and accidents, as state secrets. Even as they evacuated tens of thousands of villagers and killed herds of livestock, authorities for decades hid the true nature of the health risk from the people who live here.

Now, environmentalists say, the contamination is eight times greater in the area around Chelyabinsk than the radioactive fallout that spread across Europe from the 1986 explosion at the Chernobyl nuclear power plant in Ukraine.

Mayak, unable to afford a safe disposal system, continues to dump radioactive waste into a nearby lake even as it tries to clean up from previous accidents, said Yevgeny Ryzhkov, the plant's spokesman. Ryzhkov said that Mayak could start implementing safer disposal practices as soon as money starts coming in from reprocessing nuclear waste from elsewhere.

"As soon as we get more spent nuclear fuel to reprocess, we will thrive," Ryzhkov said.

Mayak and government officials no longer cover up the extent of the pollution. They are happy to talk about it, because they are certain that with money from reprocessing, they can fix the problem.

The public is not exactly convinced.

"Since there were accidents before, people are not at all sure" that accidents will not recur, said Alexander Akleyev, head doctor at the Chelyabinsk-based Ural Research Center for Radiation Medicine, which monitors radiation-related illness. "No one explained why the people were evacuated and the cattle killed. No one believes anyone would explain if something went wrong again."

An estimated 1.5 million people have been exposed to the radiation. The cost in illness and death is harder to measure. Ecologists say thousands of people have been affected by radiation sickness, and health officials report 40 percent more leukemia cases in the region than in the rest of Russia. But the true human toll will probably remain a secret, owing to the 40-year coverup by Soviet authorities.

All locals can do is to guess at what makes them ill.

Every day, the people of Muslyumovo, a town of 4,500, lead their cows around what is left of a barbed wire fence that runs along the banks of the Techa River to let the animals graze in the seemingly fertile grass at the water's edge. Children play on the riverbank and fish from a bridge.

Everything here emits up to 250 microrems per hour, or four times the maximum radiation that scientists consider safe. Since 1995, villagers have received a monthly pension worth $8 for "living on contaminated territory."

The fence is the only visible sign that something is wrong with the river. It is also a fitting symbol of the belated, futile attempts of Soviet, and later, Russian authorities to protect people from the radiation. Soviet authorities put up the fence in the early 1950s to prevent people from using the water. But it was not until 1989 that they began to tell people that in the late 40s and early 50s, in the early years of the nuclear weapons program, Mayak dumped toxic waste into the Techa, contaminating the riverbed with strontium 90 and cesium 137.

Even as her cattle graze along the Techa, Nurzhigan Galipova, 75, speaks calmly of the three of her 11 children who died - two of leukemia, one of heart failure - "from the river," she said. A 1998 regional government study found that illnesses in school-aged children in the area around the Techa were several times more frequent than in uncontaminated areas. Recognizing the danger, the Soviet government in the 1950s moved people out of 12 other villages along the river. But Muslyumovo was too big to relocate, said Svetlana Kostina, a researcher on radiation and environmental issues for the Chelyabinsk governor's office.

Now there is no place else for Galipova and other local farmers to go. A new government program to relocate them to safer areas is moving slowly; there is no money to build new housing. There is nothing to do but eke out a living selling the milk and dairy products of cows that drink the radioactive water and feed off the radioactive floodplains of the Techa.

"We have to eat, we have to live," said Saifetdin Gainitdinov, another

Muslyumovo resident, who gets a monthly pension of $1.25 as compensation for his exposure to radiation. "We've been living like this for years. Why stop now?"

Gainitdinov said five of his neighbors died of radiation-related illnesses. Akleyev, at the research center, said as many as 31,000 people received large doses of radiation from the river. As they age, the likelihood of cancer increases.

"Even today, a part of the population is getting radiation because of irradiated food products, such as milk from cows who drink the water," Akleyev said. "Strontium 90 moves up the food chain. People get it after drinking the milk, and it goes to their bones."

Locals also acknowledge selling the fish they catch, though regional officials play down that threat.

"Strontium 90 goes to the bones," said Sergei Sofin, a spokesman for the governor's office. "It's not like anyone eats the bones of a fish."

No one knows how many people have been affected by radiation.

Mayak's 1957 explosion sent a toxic cloud billowing over hundreds of miles of farmland, engulfing more than 200 towns and villages and exposing more than 270,000 people to lethal doses of radiation. Over the next two years, authorities relocated about 10,700 residents of the most polluted areas, tore down their houses, and ordered the soil plowed under. Officials never told people why they were being moved, nor did they prepare those who did the cleanup work for the risks of radioactive fallout.

Nurislan Gubaidullin, 62, wore ordinary work clothes when he spent the summer of 1958 plowing the polluted areas with his tractor. He only found out that he was doing something special when authorities set up guard posts in the area. It was only in 1989, after the public debate about Chernobyl made it possible to discuss nuclear accidents, that doctors told him the constant pain he feels in his legs was probably caused by the high dose of radiation he received during the cleanup.

"I have a bouquet of illnesses," Gubaidullin said. "They say that I might lose both my legs."

Gubaidullin said his son and daughter both suffer from heart problems he now attributes to the radiation. His wife died of cancer several years ago. So did her brother, sister, and niece.

"We've got a bad environment here," he said. "That's why we are all ill.
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C. Russian-Iranian Cooperation

State Department Daily Briefing - Excerpt
May 21, 2001

Q: Can I bring us back to Russia?

MR. BOUCHER: You can go anywhere you want.

Q: Okay. I just wanted to know if the issue of Russian arms sales to Iran came up, and was there any progress on this, in the --

MR. BOUCHER: During the course of the Secretary's discussions and of the other discussions that we had with Russian experts, between Under Secretary Bolton and Deputy Foreign Minister Mamedov, the issue of proliferation as part of the overall strategy came up; the issue of sales to Iran came up.

I don't think I can cite any specifics, but certainly we have made the point again and again, and made it last week with the Russian delegations, that careful attention to non-proliferation is an essential part of the strategy for stability, and that we do have serious concerns about some of the sales to Iran.

Q: Can I follow up on that? Is this --

MR. BOUCHER: Some of the potential sales to Iran. I don't think they have actually made them yet.

Q: Is this building -- can you just update us on this building's deliberations regarding possible sanctions that would be triggered by an arms sales to Iran?

MR. BOUCHER: I would have to get an update on the situation. I am not aware that they have actually concluded any sales, and I don't think -- depending on the loss, they may not even kick in until the deliveries are done.

So we are a stage now where we think it is important to talk to the Russian Government, impress upon the Russian Government the concerns that we have and that we think they should share with regard to sales to Iran, including the kinds of sales that we think would be most difficult for us, both under law, but also as a matter of policy.

Q: And finally has there been any contact with Members in Congress right now who are very -- who have expressed in the past concern about the --

MR. BOUCHER: I think it is an ongoing discussion with various Members of Congress. I am not aware of anything particularly new, but I will try to check and see if we have anything on that.

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D. Russian - Indian Cooperation

Indian Defence Minister to Visit Russia
May 22, 2001
(for personal use only)

NEW DELHI, -- Indian Defence Minister Jaswant Singh arrives in Moscow for a visit on June 3. He is going to discuss with Russian officials all aspects of military-technical cooperation between Russia and India. Jaswant Singh and Russian Deputy Prime Minister Ilya Klebanov will chair a regular session of the Russian-Indian joint intergovernmental commission on military-technical cooperation. It was created as a result of an official visit of Russian President Vladimir Putin to New Delhi in October, 2000.

The two countries have developed cooperation in the military sphere for a long time. Russia is a major supplier of armaments and military technologies for all the armed services of India. During the past 40 years India purchased from Russia 30 billion dollars worth of armaments. In December 1998 the two countries signed in New Delhi a programme of military-technical cooperation for a period ending in 2010. It includes, among other things, a delivery and license deal on Su-30MKI fighter planes, similar contracts on the T-90C tanks, an agreement on the modernization of the MiG-21 fighters, adopted by the Indian Air Force, as well as other initiatives. The Indian Defence Ministry is considering a possibility of purchasing from Russia the Admiral Gorshkov aircraft-carrying heavy cruiser on condition that the Russian side will retool it and will provide it with carrier-borne MiG-29K fighter planes.

According to the information from Indian sources, Jaswant Singh, as defence minister, will meet his Russian counterpart Sergei Ivanov and, as foreign minister, will meet Russian Foreign Minister Igor Ivanov.
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Feasibility Study of Russia-India Atomic Power Plant Drawn Up
Stanislav Bychkov
May 22, 2001
(for personal use only)

NEW DELHI - Russia and India are expected to approve already at the end of June a feasibility study of the project to build a nuclear power plant at Kudankulam in the State of Tamil Nadu. It is the largest construction project to be implemented with Russia's participation in several past decades. The plant will have six reactors and the first one is to be commissioned in 2007.

This was disclosed to journalists at Mombai (former Bombay) by Vikas Chaturvedi, chairman and executive director of the Indian Atomic Energy Corporation. He dwelt on the results of his delegation's visit to Moscow. It included representatives from the Indian Finance Ministry and Government Commission for Atomic Energy. Chaturveri said that the cost of the project "is still being agreed". The sides are expected to sign in September an agreement on the construction of the first two reactors of 1,000 megawatt each. Earth-moving jobs and laying of the plant's foundation are to begin at the end of the year.
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E. HEU Enrichment Deal

Letter from Congressman Ted Strickland to Vice President Richard Cheney
May 15, 2001

The Honorable Richard Cheney
Vice President of the United States
The Old Executive Office Building
Washington, DC 20501

Dear Mr. Vice President:

I am disturbed by early reports that the Energy Task Force recommendations fail to recognize the need to include a path forward for assuring that this country is capable of providing a reliable and economic source of nuclear fuel for commercial nuclear reactors. As you know, nuclear power is the second largest supplier of electricity generation in the country. Unfortunately, it is not unreasonable to expect that the U.S. could have an OPEC-like dependency on foreign sources of nuclear fuel supplies in the near future. To prevent such a situation, the U.S. needs to deploy cost competitive uranium enrichment technology or we will rely on foreign supplies to meet nearly one quarter of our electricity needs.

There have been adverse consequences to the nation's energy security as a result of the privatization of the United States Enrichment Corporation (USEC) in July 1998. USEC is the only domestic supplier of uranium enrichment services in the U.S. When it was privatized, USEC operated two gaseous diffusion plants located in Piketon, Ohio and Paducah, Kentucky. However, last June, USEC made the decision to cease operations at the Piketon Gaseous Diffusion Plant (GDP) ignoring the advice of the Departments of Energy and Treasury. The targeted date for turning the key to the "off position" is June 1, 2001.

A Department of Energy report issued on January 19, 2001 describes the need for the U.S. "to be able to reliably meet the continuing demand for approximately 11 million separative work units (SWU) per year." However, the Paducah plant can only produce approximately 4.5 million SWU per year in an economic manner. The balance of requirements comes from 5.5 million SWU derived from blended down weapons grade uranium imported from Russia under the U.S.-Russia HEU Agreement and some European supplies. It is evident that the operation of a single enrichment plant in the country, coupled with a history of five interruptions in the delivery of enriched uranium under the Highly Enriched Uranium Purchase Agreement with Russia, raises questions about the vulnerability of the U.S. to a disruption in the supply of enriched uranium.

This supply mix may change even further to the detriment of energy security. First, an August 2000 Nuclear Regulatory Commission report on USEC's viability suggests that USEC is unlikely to enrich uranium profitably at the Paducah plant beyond 2003. Second, USEC is trying to expand U.S. dependency on Russian nuclear fuel supplies beyond the 5.5 million separative work units (SWU) that it imports each year as Executive Agent under the U.S.- Russia HEU Agreement. USEC has been proposing additional imports of commercial enriched uranium through Tenex, the Russian export agent. One interim solution to maintain insurance against nuclear fuel supply disruptions from Russia is through a cold standby operation for the Piketon, Ohio enrichment plant. I am pleased that Secretary Abraham has taken the steps to provide for cold standby through fiscal year 2002. However, this standby plan must be linked to deployment of cost-competitive technology, such as gas centrifuge technology, and must be extended until the new technology is fully deployed. I fear there has not been adequate attention given to what happens beyond fall 2002 and this is particularly troubling because the Department of Energy's testimony before the Energy and Air Quality Subcommittee on March 27, 2001 indicates that after five or six years of cold standby there would be significant degradation to the Piketon plant.

I am aware that the Europeans have competitive centrifuge technology, and I understand that the Oak Ridge National Laboratories have a plan to develop cost-competitive U.S.-origin centrifuge technology within a three year time period. However, at present, there is virtually no effort toward domestic self-sufficiency in enrichment services, no clear path forward for deployment from the private sector, and no government policy in effect to address the matter. Privatization has failed to deploy the advanced laser enrichment technology (AVLIS) that received nearly $2 billion in federal R&D. Indeed, two years have passed since USEC announced it was terminating the AVLIS Program and nothing has emerged to replace the WW-II era gaseous diffusion plants in the next decade. Indeed, USEC's impaired credit ratings make it unlikely that they could obtain financing to deploy any technology.

Given the short-term nature of the Administration's cold standby plan and the absence of any long-term strategy to utilize the Piketon facility and deploy next generation enrichment technology, the plan for Piketon presently falls well-short of the commitment made by President Bush during the campaign. In an enclosed October 4, 2001 letter to Ohio Governor Bob Taft, then-Governor Bush expressed his concern about USEC's decision to cease operations at the Piketon plant. He stated, "I am concerned that the closure of the Piketon site, which would leave only one uranium enrichment plant operational in the United States, would compromise our long-term national security interest in a continued safe supply of enriched uranium for our defense and energy needs." He further committed in that letter, "If I am elected President, my Administration will aggressively explore how the workforce and facilities at the Piketon site can continue to serve our national interest. I believe that our nation must continue to pursue research and development of new technologies for use in uranium enrichment." Release of the Energy Task Force report is the best opportunity for the Administration to follow through on its commitment to the Piketon community and our nation's nuclear energy security.

The need for a secure, domestic uranium enrichment supply is underscored by the fact that nuclear power is enjoying improved operating economics and increased average efficiency of reactors. Demand is likely to remain stable or grow, as approximately 40% of the domestic nuclear reactors are currently seeking license renewals. During a hearing on nuclear power before the Energy and Air Quality Subcommittee on March 27, 2001, there was discussion about building the next generation nuclear reactors in the not-so-distant future. These next generation reactors will require 8-10% U-235 enrichment, compared with the 4-5% levels required for the current generation of boiling water reactors. It is troubling that USEC is closing the Piketon facility which is the only U.S. enrichment plant that is licensed to enrich uranium to 10% assay, when there is a trend toward higher assay fuel.

During the March 27, 2001 Energy and Air Quality Subcommittee hearing, testimony was offered which stated:

"USEC utilized only about 29% of its nameplate GDP capacity in 2000, and over the next year will supply a majority of its customers needs from Russian and U.S. HEU blending." (Testimony of John R. Longenecker, former USEC official).

Mr. Longenecker further states:

"USEC is finding it more profitable to operate as a trader of blended HEU rather than as a primary producer. This approach appears to lead inevitably to USEC exiting the market as a primary producer. As a result, constructing replacement enrichment capacity in the U.S. should be the key focus for the decade ahead."

In addition, during a June 8, 2000 hearing before the Commerce Subcommittee on Energy and Power, testimony was submitted stating that the front end of the nuclear fuel cycle is endangered:

"Since 1998, expenditures for uranium exploration and mine development have declined by 59%; three uranium processing facilities have closed during 1999 (two in Texas and one in Louisiana); employment in U.S. uranium exploration, mining, milling and process has decreased by almost 30%. Last year, production at ConverDyn, the sole remaining uranium converter in the U.S. was cut back by 25% and employment was reduced by over 12%." (Testimony of Mr. James Graham, President and CEO of ConverDyn).

If this nation's energy policy is going to place a greater emphasis on nuclear power, it must do so in a comprehensive fashion. An energy policy that ignores the reliability of the front end of the domestic nuclear fuel industry falls short of assuring needed energy security in this country. I urge you to carefully consider the needs of the entire nuclear fuel cycle as you prepare to issue your recommendations for a national energy strategy. I know you will agree that Americans would find it unwise and unacceptable to depend on foreign sources for the second largest supplier of U.S. electricity generation, nuclear power.

Thank you for your attention to this important matter.

Ted Strickland
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F. U.S. - Russian Relations

Schroeder, Bush Oppose Aid to Russia Now -Magazine
Erik Kirschbaum
May 19, 2001
(for personal use only)

BERLIN - German Chancellor Gerhard Schroeder and President Bush agreed to withhold financial aid from Russia as long as vast sums continue to flow out of the country, two German magazines reported on Saturday.

Quoting from a 10-page diplomatic cable on the minutes of confidential talks between Schroeder and Bush, the news weeklies Focus and Der Spiegel said Schroeder also expressed doubts to Bush about whether Russian President Vladimir Putin could push through free market and democratic reforms.

A German government spokeswoman declined to comment. She said the government does not, as a general rule, have anything to say about confidential information obtained illegally.

German media have been reporting this week other details from the leaked secret cable to Berlin from Germany's ambassador in Washington, Juergen Chrobog, who took minutes of Schroeder's meeting with Bush in Washington on March 29.

In the most explosive revelation, Schroeder's foreign policy adviser Michael Steiner was reported to have told Bush that Libyan leader Muammar Gaddafi had told him he had had a role in the Lockerbie bombing. The government has denied Gaddafi or Steiner ever made such comments.

Focus and Der Spiegel both reported new details from the telegram on Saturday, including the two leaders' observations on Putin.

"The chancellor agreed with Bush that there can be no new financial aid as long as vast sums are being spirited abroad," Focus quoted the cable as saying.

"It is an open question whether he (Putin) can really assert himself against the elites shaped during the Soviet era," the cable quoted Schroeder as adding.

Der Spiegel, which published lengthy excerpts of the cable, added that Bush said he did not view Russia as an enemy.

"But before one is ready to make further economic assistance available, one has to know more about Putin's policies and analyze his goals," Bush was quoted as telling Schroeder.

Schroeder, asked by Bush for his opinion of Putin, said the Russian leader "came from the old (Soviet) apparatus but had developed beyond that. He (Putin) believes there have to be close ties between Russia and the 'Christian West'. This includes especially Europe, but also the United States."

Russia owes Germany around 40 percent of its $40 billion debt to Western governments. Germany is Moscow's main trade partner and creditor. Schroeder has met Putin several times in recent years but resisted calls for debt relief.

Focus said Bush also made critical remarks about Putin, according to the minutes recorded by Chrobog.

"First of all his relation with a free press and secondly the continued delivery of weapons to Iran, which defies logic, because Russia is thus supporting Islamic fundamentalists," Bush was quoted as telling Schroeder.

Focus reported the cable as saying Schroeder told Bush that Germany was supplying Israel with special military assistance.

"Germany is doing a lot for the military stabilization of this country without mentioning this in public," Schroeder told Bush, adding that Arab countries would view that as an affront.
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Putin Calls Report of German-U.S. Snub 'Provocation'
Peter Graff
May 22, 2001
(for personal use only)

MOSCOW - Russian President Vladimir Putin said on Tuesday that reports Germany and the United States had agreed to withhold financial aid from Moscow were a "provocation" aimed at wrecking Moscow's ties with Europe.

He was reacting to the publication in Germany of what was described as a leaked diplomatic cable on minutes of confidential talks between German Chancellor Gerhard Schroeder and President Bush.

According to the reports, widely quoted in German press last week, Bush and Schroeder agreed to deny financial aid to Russia because of capital flight.

"It is not official information, and I have no reason to believe it," Putin told a news conference after meeting visiting Spanish Prime Minister Jose Maria Aznar.

"As for the publication itself, this is a provocation aimed at destroying the positive trend in relations between Russia and the EU and between Russia and certain members of the EU," he said.

Putin said Russia and Western lenders all shared the goal of nursing Russia's economy back to health so that it could pay its debts.

"This is a totally objective situation, and all members of the Paris Club are interested in that," he said, referring to the club of creditor nations which lent money to Russia and the Soviet Union.

The leaked cable has made headlines, both for the conversations it contained and for the apparent security breach it represented. Russia was only one of several topics Bush and Schroeder reportedly discussed.

"The chancellor agreed with Bush that there can be no new financial aid as long as vast sums are being spirited abroad," German weekly Focus quoted the cable as saying.

Bush was also quoted as telling Schroeder that it was necessary to know more about Putin's policies and his goals before more aid could be made available.

The West pumped billions of dollars into Russia after the fall of the Soviet Union. Critics have said much of the aid was wasted as it did not promote reforms, but fell into the hands of corrupt officials and wealthy, influential businessmen.

Putin's government has so far not asked for any money from the International Monetary Fund, but faces an increasingly heavy repayments schedule on more than $140 billion of foreign debt.
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