Russia says deal reached with France on warship compensation

Russia has reached a compensation deal with France for the non-delivery of two Mistral warships, a Kremlin aide has said, but Paris on Friday refused to confirm an agreement.

AFP| Updated: Jul 31, 2015, 16:50 PM IST

Moscow: Russia has reached a compensation deal with France for the non-delivery of two Mistral warships, a Kremlin aide has said, but Paris on Friday refused to confirm an agreement.

"The negotiations are completely finished, everything has already been decided, both the time-frame and the amount," President Vladimir Putin's adviser for military and technical cooperation, Vladimir Kozhin, told state news agency RIA Novosti yesterday.

"I hope we will sign the agreement on the termination of the contract as soon as possible," he added.

The fate of the two Mistral helicopter carriers has plagued France-Russia ties for more than a year, following Paris' decision in November to put the 1.2-billion-euro (USD 1.3-billion) deal on ice as the West slapped sanctions on Moscow over its annexation of Crimea and alleged backing for separatist rebels in Ukraine.

French President Francois Hollande said on Monday that he would decide "in the coming weeks" whether or not to scrap the contentious contract to supply the two warships to Russia.

A French presidency source on Friday refused to confirm that any agreement had been reached.

Hollande had said earlier this year that the conditions for the delivery were "still not right" and suggested that only the full implementation of a tenuous ceasefire in eastern Ukraine could make Paris revisit the situation.

The first ship was due for delivery in 2014, while the second was to be delivered this year.

The compensation could amount to some 1.16 billion euros (USD 1.27 billion) and a deal definitively inked in the first ten days of August, Russia's business daily Kommersant reported, citing unnamed sources.

In April, Russian President Vladimir Putin downplayed the importance of the ships but insisted that the French side reimburse Moscow "all expenses" if the contract were to be terminated.

A spokesperson of Dmitry Rogozin, Russia's deputy prime minister who oversees the defence industry, refused to comment on the deal today, as did the country's state-owned military exporter.

France's training last summer of Russian sailors aboard the first Mistral ship in the French port city of Saint-Nazaire angered its Western partners, who claimed the delivery of the ships would undermine their joint efforts to isolate Russia and condemn its annexation of foreign territory.

Russia and the West are locked in their worst standoff since the Cold War over the Ukraine crisis, with the EU and US slapping damaging sanctions on Moscow.

Last June, US President Barack Obama had urged Paris to "press the pause button" on its deal with Russia, which had been signed in 2011.