Putin’s Focus on Europe Is Key to U.S. Talks

WASHINGTON — Despite all the advance signals from Russia’s new leadership that it was not ready for a deal to dismantle the treaty that has banned missile-defense systems since 1972, there was one good reason for President Bill Clinton to feel confident as he went into his first summit meeting with Russian President Vladimir V. Putin.

Thank the little Nordic state of Finland. One of the discreet rules of thumb in dealing with Moscow for most of this century is that Russia’s northern neighbors, the Finns, have the best nonoperational intelligence of Russia. Not secrets about missile bases or new weapons, but informed insights into the politics and power balance around the Kremlin. For the Finns, who won their independence from the czarist empire with the 1917 Bolshevik Revolution and then fought Josef Stalin’s Red Army to a standstill in the 1939-40 “winter war,” understanding Russia has been a matter of national survival.

So in 1991, when a former KGB intelligence man named Putin joined the staff of the liberal new mayor of St. Petersburg, just 60 miles across the Baltic Sea from their capital, Helsinki, the Finns grew interested. Over the years, they have built up the most detailed profile of Putin available. When he replaced Boris N. Yeltsin as president, they shared the results of their assessments with their European partners and the U.S.

“We looked everywhere, into his friends and connections and his work record, and we found not a single trace of corruption. This was so unusual that we looked again. And all we found was Mr. Clean,” says one senior Finnish official who reviewed the Putin file.

“We also found that his nickname among his intimates was ‘Nyemets’: the German. This was not because of his KGB service in East Germany, but because of his manner: cool, controlled and dedicated to efficiency.”

As a KGB veteran and the chosen heir of Yeltsin’s corrupt Kremlin Putin came into office amid clouds of Western suspicion. He rose to popularity by prosecuting the brutal war against Chechnya and making it into a Russian nationalist cause. He seemed dangerously close to the oligarchs, powerful regional governors of the oil-rich provinces and the plutocrats, Moscow’s new megarich who backed Putin with their newspapers and TV stations.

So the Finnish seal of approval ran against the tide of conventional wisdom. Then came Putin’s visit to London to see Prime Minister Tony Blair. While the subsequent press conference and news reports focused on Putin’s angry defense of the Chechen war as “an anti-terrorist campaign,” Blair was impressed by what Putin said in private.

Apart from promising to make life easier for foreign investors (including British oil and gas corporations), Putin told Blair his main priority was to rebuild a state that functions. He was no dictator, Putin said, but he wanted a state machine that could feed its missile troops, pay its nuclear scientists, control crime and command the legitimacy and authority to make the rich pay their taxes and the generals obey the elected civilians.

Since that session at the end of March, Putin launched his plan to bring the virtually autonomous regional governors back under central control and saw the Duma, the national parliament, give it overwhelming support--362 votes in favor and only 34 against--on its first reading last week. Interestingly, Putin pushed it despite outspoken opposition from the biggest media plutocrat, Boris A. Berezovsky.

Putin told Blair he was serious about reforming the chaotic and inefficient tax system and pushing for legal reforms to solidify the right to own land. The Duma is now considering a plan that sounds uncannily like the one congressional Republicans floated: scrapping all tax shelters and sliding scales and complex calculations and replacing them with a simple flat tax of 17%. But before the GOP gets carried away with the thought that Putin is following its ideas, the party should note that his proposal came from a public finance reform project funded by the European Union’s aid funds.

Putin is, after all, from St. Petersburg, since its founding by Czar Peter the Great in the 18th century, the most European of Russian cities. He speaks fluent German. His first official guest was Blair, and his first official visit was to London. Putin’s KGB career was not devoted to “the main enemy,” the United States, but to Europe.

This European orientation is going to continue. Almost a quarter of Russia’s gross domestic product comes from oil and gas, and state finances depend on export earnings, which come overwhelmingly from customers in Europe. Since 1987, the old Soviet Union and now the new Russia have had close to $200 billion in Western aid and credits, two-thirds of it from Europe and about 40% from Germany alone. As market, as financier, as source of aid and technical assistance, Europe looms far larger in Putin’s mind than the nuclear counterpart across the Atlantic.

Clinton’s final presidential visit to Europe looks like a trip down the gloomiest parts of memory lane. He went into a summit meeting to talk about arms control with a highly mysterious boss of a Kremlin that still keeps its political secrets in the age-old way. Putin did not rise through the public political system, as Yeltsin did. He had no track record, few known political positions and Russian insiders don’t know what to make of him.

Putin’s KGB background and the prosecution of the Chechen war made many Russian liberals, intellectuals and former dissidents deeply suspicious. Since such folk tend to have good contacts in the West, and were right in their warnings that Yeltsin would prove a wayward old drunk, they were taken seriously. Putin quickly fulfilled their darkest prophecies about his disdain for press freedoms when armed police raided the offices of the giant Media-Most group. Moreover, an outrageous proposal was brought before the Russian courts this spring, to have Stalin’s terrifying secret-police chief, Lavrenti Beria, rehabilitated, as if he were just one of the millions of hapless victims of the Soviet state. Aha, said the suspicious, with Putin, the KGB is back with a vengeance.

But last week the courts threw out the Beria rehabilitation scheme, and Media-Most’s newspapers, magazines and NTV channel still flourish. There is a problem here. The independent media are almost entirely owned by the very plutocrats, like Berezovsky, whose powers most Russian reformers would like to see curbed. It is an interesting question whether the target of the police raid on Media-Most was the press or the plutocrat Vladimir A. Gusinsky, who owns it, or whether Putin was brusquely displaying his power to intimidate by hitting two birds with one stone.

The key to late Soviet and post-Soviet politics is to understand that the regime was brought down less by the dissidents and liberal intelligentsia than by the vast “loyal opposition” of reformers who remained inside the system, like Mikhail S. Gorbachev and Yeltsin. Appalled by the current enfeeblement of the Russian state and nation, many of them--in the elections, in the Duma and in the media--seem prepared to give Putin the benefit of the doubt.

“Now, as never before, there is a historic chance to carry out systemic reforms in Russia. It would be a great mistake not to try to make use of it,” says Tatyana Tolstaya, a descendant of Russia’s outstanding novelist and something of a benchmark figure for the political instincts of Russia’s thinking classes.

Two things they all seem sure of. The first is that Putin is not dumb enough to hand a lame-duck president a big arms-control deal that would infuriate Russia’s military, outrage nationalists and could spoil his relations with a future President George W. Bush. The second is that the Russian leader, like the American, is attending these summits out of Cold War habit. Beyond arms control, and a frosty agreement to differ on Chechnya, there is not that much to talk about.

For Putin, the important meetings are with Russia’s biggest customers and neighbors, the Europeans, who even agree with him in opposing U.S. plans to build an antimissile-defense system. By contrast, summits with American presidents tend to be politically useful rather than economically lucrative. So whatever Clinton hoped for history’s legacy from his last summit in Russia, he was facing a German-speaking Mr. Clean with his eyes on a post-Clinton future.