On the same day that the EU renews sanctions against Russia for another year, President Vladimir Putin tells an audience at the St Petersburg International Economic Forum that the EU is Russia's closest neighbour and a key economic partner. David Pollard reports.
If the thaw's begun, then it's one drop at a time. This handshake on Thursday between the Russian and the European Commission presidents raising hopes. Friday's EU renewal of sanctions against Russia lowering them again. Though not it appears, for Putin himself. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "Despite all the well-known problems in our relations, the European Union remains Russia's key trade and economic partner. It is our closest neighbour and we are not indifferent towards what's happening with our neigbours." But Putin also offering a caution. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "Russia did not initiate today's breakdown, discord and problems, or the introduction of sanctions. All our actions were, and still are, carried out only as a response. We are ready to move towards our European partners. But it certainly cannot be a one-way process." And for investors, the signs are there of a slow rapprochement. Russia's economy has been badly hit by international sanctions. Now might be the time to think about ending them, say economists - and not just for Russia's sake. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "The EU economy is stalling, looking soft. Russia is an important trade partner and it's just not in anybody's interest to keep Russia at arm's length for a prolonged period of time. Particularly, as oil prices recover, Russia gains a bit more strength - they're able to withstand the sanctions against them." Putin also criticised NATO expansion - while at the same time saying he did not want a new Cold War with the West.