France cancels sale of warships to Russia, pays Moscow back

6 Aug 2015 | Author: | No comments yet »

France says ‘several’ nations interested in Mistral warships.

Paris: France’s defence minister said on Thursday that “several” countries had expressed an interest in buying its Mistral-class warships, after Paris refused to deliver them to Russia because of the Ukraine crisis. Late Wednesday, French President Francois Hollande announced he had clinched a deal with his Russian counterpart Vladimir Putin to withhold the warships in exchange for compensation. Le Drian said on radio RTL the initial price for the two Mistral helicopter carrier warships had been 1.2 billion euros, but France will have to pay less than that because the ships were not been finished and the contract was suspended. In a deal worth around €1.2 billion (Dh4.8 billion), France had promised to deliver the two vessels to Moscow but the agreement hit the rocks over Russia’s perceived aggression in eastern Ukraine.

He added that the discussions had been held in an amiable way and that there were no further penalties to pay over the contract, which was cancelled because of Russia’s role in the Ukraine conflict. “Russia will be reimbursed euro for euro for the financial commitments taken for these ships,” he said, adding that the ships are now fully owned by the French state. But with Russia and the West still locked in their worst standoff since the Cold War, France’s Western partners said any delivery of ships would undermine their efforts to isolate Moscow over its 2014 annexation of the Crimea peninsula from Ukraine and its support for separatists in Ukraine’s east. In April, in a sign that the deal was on rocky ground, Putin had downplayed the importance of the ships but insisted that the French side reimburse Moscow “all expenses” if the contract were to be terminated.

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