France to pay Russia under 1.2 bln euros over warships

The total cost to France of reimbursing Russia for cancelling two warship contracts will be less than 1.2 billion euros, French Defence Minister Jean-Yves Le Drian said on Aug. 6. 

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. 

"Talks between President Putin and President Francois Hollande have concluded yesterday [Aug. 5]. There is no further dispute on the matter," he said. 

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. 

In exchange for the reimbursements, France will have full freedom to do whatever it wants with the two undelivered vessels, which contain some Russian technology, according to statements from Hollande's office and Russian President Vladimir Putin on Aug. 5. 

Le Drian said that France, whose navy already has three Mistral warships, would look for other buyers for the two ships. 

"I am convinced there will be other buyers. Already a number of countries have expressed an interest for these two ships," he said. 

Canada and Singapore have been mentioned as potential buyers. So has Egypt, which has just bought French fighter jets and naval frigates. 

The ships' builder, state-backed DCNS, said last month it was spending at least 1 million euros ($1.1 million) a month to...