Russia's Putin arrives in Austria for trade talks

VIENNA, May 23 (Reuters) Russian President Vladimir Putin arrived in Austria today for a visit focused on trade talks which are likely to prove a respite to recent problems between Moscow and other European Union members.

Putin visits Austria less than a week after an EU-Russia summit ended in disagreement over Russian democracy, and Moscow's tetchy relations with Estonia, Lithuania and Poland. A strategic partnership pact between Russia and the EU is stalled.

Talks with Austrian President Heinz Fischer and Chancellor Alfred Gusenbauer, mainly focused on economic issues, are likely to be a good deal smoother.

''The sides will discuss a wide range of issues concerning bilateral relations, which are developing positively in the spirit of partnership typical for them,'' the Kremlin said in an upbeat statement issued ahead of the visit.

Russia's gas monopoly Gazprom supplies most of Austria's gas and seeks deeper access to distribution.

While Austria also leads the Nabucco pipeline project intended to bypass Russia and create alternative gas supply routes, Vienna toned down earlier warnings about Gazprom's outreach and played down the pipeline rivalry.

''Austria sees Russia as a reliable supplier, while Russia sees Austria as a reliable buyer of gas,'' Gusenbauer told Russia's Moskovskiye Novosti newspaper ahead of Putin's visit.

Fischer said Nabucco, designed to deliver gas from the Caspian Sea to southern Europe via Turkey, Bulgaria and Greece, could co-exist with Gazprom's rival plan to expand its Blue Stream pipeline to Turkey along a similar route.

''Gazprom could use Nabucco to deliver additional volumes to the European Union,'' he told Russia's Interfax news agency. ''I don't think the question is Nabucco or the Blue Stream. It could be both Nabucco and the Blue Stream.'' In an interview with Reuters last month, Gusenbauer had struck a different tone. ''If we really want a diversification of energy supplies, Nabucco is the only way'', he had said.

BUSINESS DEALS The Kremlin said Putin also intended to discuss prospects of mutual investment at a meeting with Austrian business leaders.

Austria's Raiffeisen International is now the biggest foreign bank in Russia. Steelmaker Voestalpine, brickmaker Wienerberger and packaging maker Mayr Melnhof are among other Russia investors.

On the other hand, Russian tycoon Oleg Deripaska has agreed to buy a 30-per cent stake in Austrian builder Strabag.

Protests against Putin today were limited to a small crowd demonstrating against Russia's 12-year war against insurgents in the province of Chechnya.

Putin will lay a wreath tomorrow at the monument to Soviet soldiers who died liberating Vienna from Nazi troops in 1945.

The ceremony at the site carefully preserved by local authorities is also set to become a symbolic gesture.

Earlier this month, Moscow lashed out at ex-Soviet Estonia of removing a similar monument from the centre of capital Tallinn and blamed the European Union for failing to react to what it described as ''attempts to review history''.

REUTERS RJ HS1841