The office of French President Francois Hollande said Wednesday that he had reached an agreement with Russian President Vladimir Putin on compensation terms for a canceled deal to deliver two Mistral warships to Russia, Agence France-Presse reported. The deal was shelved after Russia annexed Crimea in March 2014, spurring sanctions from West.
The $1.2 billion deal for the helicopter carrier ships has been in limbo for more than a year amid continued tensions concerning Russia's alleged backing of pro-Russia separatists in eastern Ukraine. Russia would be "fully reimbursed" for the two undelivered ships, Hollande's office said in a statement, AFP reported. Any Russian equipment installed on the ships would be removed and returned to Russia, the statement said.
As recently as last week, France had denied any deal had been struck concerning the fully built ships. While Hollande admitted that talks had taken place, he did not confirm that compensation terms had been reached. "Discussions are underway. I will make a decision in the coming weeks," Hollande said at a news conference, the BBC reported. But Russian media reported that the deal had been finalized prior to Hollande's denial.
"The talks have been completed, everything is settled,” Vladimir Kozhin, Putin's aide on military-technical cooperation, said last Thursday to Russian outlet Sputnik News. “The schedule and the amount, which Paris will repay to Moscow, [is decided]. I hope that an agreement on the termination of the contract will be signed very soon, and we will be able to announce the sum that France will pay us.”
Russian media then reported Friday that France would reimburse Russia $1.27 billion for the canceled deal. While the exact payout isn't yet known, Russia has confirmed that it has received payment and considers the situation resolved.
"The president of Russia and the president of France took a joint decision to annul the contract," the Kremlin said in a statement, via AFP. "Moscow considers the Mistral issue to be completely settled."
France originally agreed to deliver the ships in 2010, but the deal fell apart amid pressure from European leaders concerning Russia's alleged involvement in the conflict in Ukraine that has killed at least 6,400. France, in turn, missed a contractual deadline, entitling Russia to compensation.