Putin's Christmas Gift to Schröder

At the end of their talks on Tuesday, Gerhard Schröder and Vladimir Putin witnessed the signing of a number of bilateral agreements to promote cooperation in the fields of economics, science and health. The icing on the cake for Schröder was Putin's announcement that Russia is willing to pay back a considerable amount of the foreign debt it owes the 18 creditor nations of the Paris Club, including Germany, ahead of the actual deadline.

"Russia is ready to solve this issue," Putin said after the talks in Schleswig, northern Germany on Tuesday.

Observers at the meeting reported that Germany could reckon with €2 billion ($2.7 billion) in Russian debt-servicing reimbursement annually from 2005, but the details would still have to be sorted out with other members of the group.

Not Germany's concern?

Apart from economic issues, Schröder and Putin also debated a number of foreign policy issues, but they largely avoided the controversial weekend sale of Russian oil giant Yukos' largest production unit, Yuganskneftegaz. Both described the issue as an internal Russian problem.

At the same time, German media reported that the German government had been putting pressure on energy concern E.ON to expand its 6.5 percent stake in Russian utility giant to help strengthen bilateral relations between the two countries.

Schröder and Putin did, however, discuss the presidential election re-run in Ukraine set for Sunday at length, Schröder said.

"We’re both of the opinion that no one has the right to interfere in any way when the Ukrainian people elect a new president on Dec. 26," Schröder said. "In our talks, Putin has left no doubt whatsoever that he'll accept the outcome of the election re-run without any strings attached."

Putin told the media in Schleswig he was banking on German help to modernize Russia's domestic energy and transport sectors, lauding the agreement for German engineering giant Siemens to deliver 60 high-speed trains to the Russian railway as "a new example of our long-term strategic partnership in the economic field."

Held his tongue

Without touching directly on the human rights situation in Chechnya, Putin did make clear he was willing to accept a special European dialogue forum as a mediating instrument in the ongoing conflict in the Caucasus region. German opposition leaders had criticized Schröder for not buttonholing Putin over human rights issues.

But Alexander Rahr, a German expert on Russia, backed the chancellor's cautious approach, saying that Putin can also look back on major achievements.

"There's no denying that Putin has stabilized the country in a considerable way and brought fresh impetus to German-Russian relations," Rahr said, pointing to Russia's willingness to repay debt. "Berlin is delighted to see Russia come to its rescue and help plug the huge holes in the federal budget."

Faced with the prospect of such a financial windfall as they grapple with the effects of three years of economic stagnation, it was clear that Schröder and his cabinet members would not make tricky human rights issues a priority.