Russian President Dmitry Medvedev and German Chancellor Angela Merkel on Thursday were at odds over the Caucasus but in agreement over the US financial crisis, during meetings in Russia's Baltic Sea port of St Petersburg, according to DPA. Merkel, in her opening remarks at a conference called "The Petersburg Dialogue," called for increased understanding between Europe and the Kremlin, but at the same time criticized Medvedev and his government for Russia's hard line policies in Georgia. "The Russian reaction in this conflict (the Russo-Georgian war) we consider to be disproportionate and we said (to the Russians), that we now need to build trust," Merkel said. A key first step would be withdrawal of all Russian troops from Georgian territory by October 10 per an European Union-brokered ceasefire between Moscow and Tbilisi, she said. Medvedev, in his opening remarks at the conference, defended his country's actions, calling Georgia's August attempt to overrun its renegade province South Ossetia "aggressive nationalism," and international claims Russia was the attacker in the conflict "dishonest propaganda." The world despite worsening relations between Moscow and NATO nations over Georgia would nonetheless never see a new Cold War, Medvedev claimed, "Because there are no reasons for it." Russia and Germany have "differing views on this matter (the Caucasus situation)," Merkel conceded. Western nations and Russia need to engage each other in a series of "preventative talks" to forestall future conflicts, and to prepare the ground for cooperation, she said. Russo-European coordination over the role of military observers deployed to Georgia from the Organization of Security and Cooperation in Europe (OSCE) is one of first topics requiring greater mutual understanding, Merkel said.
