Mistral Deal - A Storm Brewing at Sea
By Aiswarya Lakshmi
Monday, May 18, 2015
While France is seeking a way to cancel its contract to deliver two helicopter carriers to the Russian navy, Russia wants 1.163 billion euros ($1.32 billion) from France in compensation for nixing the deal.
President Francois Hollande is under pressure from Western allies to scrap the deal because of Moscow’s role in the Ukraine crisis. France has offered Russia its terms to scrap a contentious contract to supply two warships that was suspended due to the Ukraine crisis, but Moscow judged the sum as unacceptable.
According to the Russian daily, Kommersant, Paris is offering around 785 million euros. The Kremlin says its position is clear: either France stumps up the full compensation, or it hands over the warships.
There are reports that Paris is keen to resell the two Mistrals before paying out compensation. French defence columnist Jean-Dominique Merchet wrote that the delay in the Mistral deal could cost French taxpayers as much as 5 million a month for upkeep and maintenance if they remain in the port of Saint-Nazaire.
The fate of the two Mistral helicopter carriers that has plagued French-Russia ties for over a year has taken a new turn with Chinese media reporting that representatives from the French in Shanghai could propose a deal to sell the warships to China.
But a Russian defence official has said the vessels cannot go to a third country because they’ve been tailor made and it is a matter of state security.
The Mistrals are far more powerful than anything currently in the Russian navy, and Russia had created a special line of helicopters — the Ka-52Ks — to fill them.