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France will pay compensation worth €1.2 billion to Russia for cancelled Mistral deal

August 06, 2015, 9:58 UTC+3 PARIS

The two warships will become property of France after the compensation is paid

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© ITAR-TASS/Vadim Zhernov

PARIS, August 6. /TASS/. France will pay full compensation to Russia for two Mistral helicopter carriers, French Defense Minister Jean-Yves Le Drian told RTL radio station on Thursday.

The sum of compensation stands at around €1.2 billion, he said confirming that the two warships will become property of France after the compensation is paid. "France and Russia do not have any more disagreements on this issue with ships," Le Drian stressed.

"I am confident that others will want to buy these helicopter carriers. Several countries have already expressed their interest," he noted.

The initial deal with Russia was cancelled because "the situation has changed since 2011, when the contract was signed," the defense minister said. "It is undesirable to create additional risks to an already existing threat," he noted, talking about the situation around the Ukrainian conflict.

Russia-France Mistral deal

Russia and France signed a contract for construction of two Mistral ships for the Russian Navy in June 2011. The first ship that was christened The Vladivostok was made waterborne in October 2013 and its handover to the Russian Navy was scheduled for November 2014 but Paris took an eleventh-hour decision to suspend the transition of the helicopter carriers under the pretext of the situation in Ukraine.

The second ship of the Mistral class, The Sevastopol, was to be turned over to Russia in the first half of 2015.

On August 5, the Kremlin press service reported that Presidents Vladimir Putin of Russia and Francois Hollande of France have taken a joint decision to sever the agreement on construction and supplies to the Russian Navy of two amphibious helicopter carriers of the Mistral class that was signed in June 2011. "Moscow believes that the problem of the Mistral ships has been fully settled," it said in a report.

"In the course of expert negotiations that were held in the friendly key typical of Russian-French relations, the sides managed to reach a mutually acceptable agreement on reimbursement of the monies the Russian government had paid under the contract, as well as on a return of the equipment and materiel supplied by Russian manufacturers," the report said.

"France has remitted the above-said monies and it will reacquire the right of ownership over the ships and will be able to dispose of them after the return of equipment," the press service said.

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