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By Timothy Heritage
STOCKHOLM (Reuters) - The European Union and Russia hope to lay the foundations of a new economic and political partnership at a summit on Wednesday despite differences over energy, trade, human rights and climate change.
Russian President Dmitry Medvedev and the EU's Swedish presidency will seek to rebuild trust shattered during Russia's war with Georgia last year but boosted by a deal this week on an "early warning" mechanism to shield Europe from supply cuts.
They are setting their sights low for now, especially as the EU fears gas supplies from Russia are threatened by a dispute between Moscow and Ukraine, but hope at least to avoid new quarrels and start a gradual improvement in ties.
"We need to work closely with Russia. There is a level of mutual dependence -- we depend on them for energy supplies and we are energy consumers for them," Finnish Foreign Minister Alexander Stubb said on Monday as the EU prepared for the talks.
The EU, which represents almost 500 million people, is Russia's biggest trading partner, accounting for about half its overall trade turnover in the first nine months of this year.
Russia, a country with vast natural resources and a population of about 142 million, hopes to win more foreign investment from the EU following the global economic crisis.
EU officials are encouraged by Medvedev's calls for reform and modernisation of Russia's economy. Moscow sees positive signs from Sweden under Prime Minister Fredrik Reinfeldt, who hosts the one-day summit because Stockholm holds the EU's six-month presidency until the end of this year.
"We see signs of pragmatism ... in the Swedish leadership which we hope will lead to productive meetings," said Sergei Prikhodko, Medvedev's chief foreign policy adviser.
TALKS ON NEW PARTNERSHIP AGREEMENT
The EU and Russia are negotiating a new Partnership and Cooperation Agreement to provide the framework for their relationship, but it will not be completed on Wednesday.
Relations are improving only slowly after the Georgia war in August 2008, which prompted Swedish Foreign Minister Carl Bildt to compare Russia's military intervention to Nazi leader Adolf Hitler's invasion of parts of central Europe.
"Certainly I'm looking forward to a constructive discussion rather than a heated exchange of criticism," Vladimir Chizhov, Russia's envoy to the EU, told reporters on Friday.
Hopes of ties improving were lifted by the signing on Monday of a memorandum requiring both sides to notify the other of any likely disruption to energy supplies and to work together to resolve the problem.
Russian gas supplies to Europe via Ukraine, a route that supplies a fifth of Europe's gas, were halted for more than two weeks in January because of a quarrel between Moscow and Kiev.
Fears are growing of a new dispute next January, when Ukraine holds a presidential election. But the EU hopes the summit will help build trust on energy issues, even though it is seeking to diversify its supply routes.
"The EU should reiterate that it sees Russia as its key energy partner. The summit will serve as an opportunity for the EU to underline the need to rebuild confidence and ensure predictability in EU-Russia energy relations," the EU said in a document setting out its position for the summit.
The EU hopes to persuade Moscow to do more in the fight against global warming and wants clarity from Russia over its plans to join the World Trade Organisation after Prime Minister Vladimir Putin said it would join only as part of a customs union with Belarus and Kazakhstan.
Regional security and issues such as conflict in Afghanistan and Iran's nuclear programme are also expected to be discussed.
(Additional reporting by David Brunnstrom in Brussels and Oleg Shchedrov in Moscow; Editing by Louise Ireland)