Opening speech for Minister Roche at the 22nd Russian Bankers Conference on 'Transition to the Market Economy: (1)

I am delighted to have been invited to address this distinguished gathering this morning at the opening session of your Conference. On behalf of the Government, I am honoured to welcome you to Ireland. I hope that the results of your discussions here in Dublin will be beneficial and that the new friends you are sure to make over the next few days will last long into the future.

I was very glad to hear from Ambassador Harman, who represents Ireland in Moscow, that the Russian Bankers Conference chose to come back a second time to Dublin for your important annual meeting.

As Minister for European Affairs, I am particularly glad also that you have chosen to hold this second meeting in Ireland during our six month term as Presidency of the European Union. As you may know, the theme we have chosen for our EU Presidency is "Europeans working together". It's a very good theme and is anchored in a commitment to friendship and practical co-operation throughout the European continent. We have taken that theme very much to heart in the approach we have taken to co-operation between the European Union and Russia in our Presidency.

We start from the conviction that as Europeans, Russia and the 25 EU Member States and Acceding Countries are united not just by history and geography, but above all by our shared values, common interests and important and pressing common challenges.

We are keen in our Presidency of the European Union to do what we can to move the partnership between the EU and Russia to a new level of trust and co-operation across the board.

This conference is a great example of the sort of practical co-operation we need to see more of in EU-Russia relations. Hopefully we will see just that once the heavy diplomatic spade work and economic issues related to Russia's WTO accession are completed. I know that Irish business certainly looks forward to that day.

As a close neighbour of the European Union - and an even closer neighbour after EU enlargement takes place in less than two weeks' time - Russia is a major partner for the Union. There are a multitude of important trade, energy, economic and political links between the EU and Russia. The EU is determined to build a genuine strategic partnership with Russia based on common interests and common values, equal rights and obligations, mutual trust and an open and frank dialogue. This partnership is essential to the future peace and stability of Europe. European leaders have re-affirmed this objective again and again, and are deeply committed to it.

The EU and Russia should work together to make best use of the opportunities which EU enlargement brings to develop and strengthen our strategic partnership. The EU-Russia economic relationship is one which can only continue to grow in importance. Enlargement of the EU will not only bring the borders of the EU and Russia closer to each other but also create a larger EU market which will form greater potential for both trade and investment.

The EU-Russia Partnership and Co-operation Agreement, the PCA is the cornerstone of the EU-Russia relationship. It provides a solid legal foundation on which this strategic partnership can be built. As EU enlargement approaches, the PCA will naturally have to be extended to cover the EU's new Member States. Discussions between the EU and Russia in Dublin and Brussels over the last week have focused on resolving the few outstanding issues, particularly relating to Russia's legitimate technical concerns, including in the trade area. The Presidency looks forward to this issue being solved, and to the way being cleared for the two sides to sign the Protocol extending the PCA at the next meeting between the EU Troika and the Russian Foreign Minister, on 27 April in Luxembourg.

A speedy resolution to the PCA issue is particularly important for business. Certainty about the legal basis of trade is necessary to ensure stable markets. There is some evidence that the current uncertainties over the timing of PCA extension is having a negative impact on trade flows, particularly as regards trade between Russia and the acceding member states. The extension of the PCA will allow all concerned to operate in a stable and predictable trade environment, and to take full advantage of the economic benefits which enlargement offers. The creation of a single market of well over 300 million consumers, governed by one set of trade laws and product standards and one uniform set of tariffs will make it easier Russian businesspeople to trade with, and invest in, the EU.

Once PCA extension issue is resolved, both sides can move ahead to preparing for the next EU-Russia Summit. We envisage that the Summit will advance work on developing the 'four common spaces' which were agreed by the St. Petersburg Summit last year. These spaces cover co-operation on economic issues, internal security and human rights, external security and research, education and culture.The Presidency intends to work with the Commission and the High Representative, Javier Solana, to bring forward proposals on how we can develop the 'four common spaces'.

The first of these spaces, the 'common economic space', will be of particular interest to this audience. In pursuing economic integration and regulatory convergence, the common economic space is expected to put in place the conditions for increased and diversified trade between the EU and Russia and to create new investment opportunities. It is also expected to provide a frame work for reinforced cooperation on networks (transport, telecommunications, energy) and on agricultural and environmental issues.

The EU is and has been for sometime Russia's most important trading partner accounting for about 37% of the overall trade, a figure which is due to run above 50% following enlargement. The EU is also the main source of technology, know-how and investment in Russia. As the EU and Russian economies are very complementary there are great advantages of deeper economic integration for both sides. This is already evident by the high level of interdependence in the field of energy, including increased opening of the Russian energy sector to European investments. Top