France and Russia Close Book on Mistral Warship Deal Gone Bad

By Gregory Viscusi

(Bloomberg) — France and Russia have agreed to terminate a contract for 2 helicopter carriers that France constructed after which refused at hand over due to the battle in Ukraine.

France has reimbursed the cash Russia superior for the Mistral-class warships and can return Russian gear that had been put in, leaving France free to make use of or promote the vessels because it sees match, in keeping with a joint assertion from each nations on Wednesday.

“This matter is now closed,” they mentioned within the joint assertion.

See Also: France the Clear Loser in Failed Warship Deal

No cash quantities had been revealed, and the worth of the ships has by no means been formally introduced. French newspapers reminiscent of Le Monde have reported it was a 1.2 billion-euro ($1.3 billion) contract.

The sale, signed by former President Nicolas Sarkozy in 2011 throughout a interval of warming relations with Russia, turned a coverage dilemma for President Francois Hollande after France and its allies imposed sanctions on Russia in early 2014 for its actions in Ukraine.

Hollande initially introduced France was merely delaying supply of the primary ship, due on the finish of final 12 months, later saying he was searching for to terminate the contract. The ships are sitting in a naval dockyard in Saint-Nazaire on France’s Atlantic coast.

Hollande and Russian President Vladimir Putin spoke by phone on Wednesday to seal the settlement, the French chief’s workplace mentioned. Putin mentioned on April 16 that Russia wouldn’t demand fee of penalties for non-fulfillment of the contract.

The 199-meter (653-foot) warships are famous for his or her versatility, and may be shortly transformed from helicopter carriers to hospital ships to control-and-command vessels. The ships constructed for Russia had been named Vladivostok and Sevastopol.

About 400 Russian sailors skilled on one of many ships late final 12 months.

–With help from Olga Tanas and Scott Rose in Moscow.