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. Last Updated: 07/27/2016

Putin Touts Rising Economic Muscle

Itar-TassPutin and Junker embracing during a meeting in Luxembourg on Thursday.
LUXEMBOURG -- Russia's growing economic power has made it less vulnerable to outside pressure, President Vladimir Putin said Thursday after competing a short European tour in which he signed economic and trade accords with Austria and Luxembourg.

Putin said an annual economic growth rate of 7 percent or more, a healthy inflow of capital into the Russian economy and a ballooning cash reserve mean "there are fewer ways to pressure Russia" these days.

He acknowledged fractious relations with the European Union, laid bare at a chilly Russian-EU summit a week ago near Samara.

"There are problems [in Russian-EU relations] but we will solve them together," said Putin at a press conference after a two-hour meeting with Luxembourg Prime Minister Jean-Claude Juncker.

On a visit to Austria Wednesday, Putin signed energy agreements and played down disagreements with the European Union.

He signed energy, banking and steel agreements, including one for Gazprom to build thermal power plants, with Juncker, who cautioned against exaggerating the downturn in EU-Russia relations.

"We have to see our relations in rational terms instead of focusing on the pleasure that some find in over-dramatizing it," said the Luxembourg leader.

Trade between Russia and Luxembourg has more than tripled over the past three years and totaled 241 million euros ($325 million) last year, Luxembourg officials said. The Grand Duchy has long been a European banking magnet and financial services are an increasingly important link between the two nations.

Russia's increasing business with EU nations come at a time of increasingly awkward political ties between Moscow and the 27-nation bloc, highlighted this week by Russia's refusal to extradite a Andrei Lugovoi, a Russian suspect in the poisoning death last year of Kremlin critic Alexander Litvinenko in London.

Other issues include the complicated trade dispute with Poland over meat imports; energy cutoffs to neighbors during price disputes over the past few years; Russia's threat to veto a Western-backed plan for Kosovo's independence in the United Nations; Western concerns over human rights issues in Russia; and Russia's criticism of U.S. plans for a missile defense system in Eastern Europe.

Relations between the West and Russia have chilled in recent years as Putin has tightened his grip on power at home and grown bolder on the international stage.

Still, Putin has said those issue should not stand in the way of better cooperation.

"I don't think we have particular problems with the EU," Putin said in Vienna, adding most problems still stemmed from the Soviet era.

n Also Wednesday, Gazprom and Austria's OMV signed an agreement to cooperate more closely on natural gas transit and storage projects to increase gas exports from Russia to western Europe, Bloomberg reported.

Gazprom will take a stake in OMV's Central European Gas Hub at Baumgarten near the Austrian-Slovak border, OMV said. The hub handled 7.7 billion cubic meters of gas transports in 2006. Gazprom and OMV will also work on gas storage projects, OMV said in a statement, without giving more details.

"The business ties have reached a new quality," Austrian Chancellor Alfred Gusenbauer said at a business forum at the Austrian Chamber of Commerce Thursday.