He said reports about the so-called “trade war” between the European Union and Russia were exaggerated. According to Mr. Gref, Russia is in the process of settling its disagreements with the European Union. He said common approaches had been found on all controversial issues, including uranium fuel and agricultural products.

Another round of EU-Russia talks will be held later this month, when EU Trade Commissioner Pascal Lamy will visit Moscow.

In late February, the European Council discussed EU-Russian relations at a meeting in Brussels. It concluded that the Partnership and Cooperation Agreement (PCA), signed in 1997, has to be “applied to the EU-25 without precondition or distinction” by May 1, 2004. If Russia refuses to extend the agreement, the EU threatened tough measures and even economic sanctions against Russia.

As compensation, Russia asked visa-free travel to Europe for Russians, financial aid to the Kaliningrad region (Russia’s enclave on the Baltic Sea), lower customs tariffs and higher quotas for the import of Russian goods. In January, Russia announced its 14 demands on the European Union regarding its trade relations with the EU acceding countries.

But Brussels rejected these demands saying that all EU-Russian agreements should be extended to the new members. EU officials are ready for talks on separate issues, but they insist that Russia sign an additional protocol to the Partnership and Cooperation Agreement, extending it to the Eastern European countries joining the EU on May 1. They also insist that Russia should do it “without precondition”.

Documents prepared by the European Commission for the EU meeting in Brussels on February 23-24, contained 17 demands on Russia. The EU wants Russia to delimit its borders with Estonia and Lithuania, reform the energy sector, ratify the Kyoto Protocol before May 1, raise security standards in the sphere of transport and nuclear energy and stop charging “unjustified” fees on European airline companies for flying over Russia.