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EU trade deficit with Russia grows to 70 bln euros
POSTED: 10:45 a.m. EDT, May 16,2007

The European Union last year recorded a trade deficit of nearly 70 billion euros with Russia owing to large energy bill, the EU's statistics bureau Eurostat said on Tuesday, three days ahead of a EU-Russia summit.

Accounting for over 6 percent of EU exports and 10 percent of EU imports, Russia became the third largest trading partner of the 27-nation bloc last year, tailing after the United States and China.

Between 2000 and 2006, EU exports of goods to Russia more than tripled in value, from 22.7 billion euros to 72.4 billion euros, while EU imports from Russia more than doubled, from 63.8 billion euros to 140.6 billion euros.

As a result the EU deficit in trade with Russia increased from 41.0 billion euros in 2000 to 68.2 billion euros in 2006.

The increased deficit was primarily due to an increase in the deficit for energy, only partially offset by an increase in the surplus for machinery and vehicles.

Two thirds of EU imports from Russia were energy last year, resulting in a deficit of nearly 94 billion euros, while machinery and vehicles accounted for almost half of EU exports to Russia, contributing a surplus of more than 32 billion euros.

Among the 27 member states of the EU, Germany was both the largest exporter and importer for Russia, accounting for 32 percent and 21 percent of the respective EU total.

The updated figures were released ahead of a EU-Russia summit, which was set to kick off Friday in Samara, Russia as their relations were going through a difficult period.

Energy issue has become a routine topic when EU and Russian leaders met in recent years. The EU wanted to seek assurance from Russia to relieve its concern over the security of energy supply after it suffered from Russia's energy disputes with Belarus and Ukraine.

German foreign minister Frank-Walter Steinmeier said he hoped that progress on energy security could be made at the summit.

However, it was out of the question to start negotiations on a new EU-Russian partnership agreement at the summit since Poland refused to lift a veto against the mandate in retaliation to Russia 's embargo on Polish farm exports.

Furthermore, the EU-Russia relations became increasingly restrained recently due to the controversial relocation in Estoniaof a Soviet-era statue.

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