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. Last Updated: 07/27/2016

Blair's Warning on Investors Dismissed

HEILIGENDAMM, Germany -- Deputy Finance Minister Sergei Storchak on Thursday dismissed as unfounded an "emotional" warning by British Prime Minister Tony Blair that the Kremlin's frosty relations with Europe could scare off foreign investors.

"I doubt that business will react emotionally to what I believe are the emotional words of a person who is, in effect, the ex-prime minister," Storchak said on the sidelines of the Group of Eight summit.

Blair has joined other world leaders here for his last G8 summit. He is to step down at the end of this month.

"Such a statement goes against the grain of the joint work that has been done over the past six months by the G8 sherpas [on harmonizing investment conditions] ... and it was rather unexpected," Storchak told reporters.

Britain has particular concerns about Russia because BP's Russian unit, TNK-BP, faces a threat to its license to operate the vast Kovykta natural gas field.

Storchak said the pace of foreign investment, and economic reforms implemented by the government, showed the investment climate was getting better, not worse.

He said a number of large foreign investment deals would be signed at an economic forum in St. Petersburg later this week.

"I think in fact the St. Petersburg forum will completely refute such pointed statements about the investment climate in Russia," he said.

Blair's spokesman, speaking to reporters traveling to the summit this week, gave a thinly veiled warning that Russia's worsening relations with the European Union would have economic repercussions. "Europe is increasingly saying it can only have a good commercial, economic and political relationship with Russia if Russia reflects the same values [as Europe] in its actions," the spokesman said. "If not, Russia will not attract the direct investment it needs and wants. Companies will only invest in a country where they believe their investments are secure."