Germany backs France on Russia warship contract

BRUSSELS - Germany has defended France’s plan to deliver a warship to Russia in October despite US criticism of the move.

Chancellor Angela Merkel i said on Wednesday (4 June) in Brussels that interruption of delivery might only come if the EU adopts “stage three” sanctions - economic sanctions - against Russia.

But she said the EU is not launching stage three because Russia did not stop Ukraine’s 25 May presidential elections from going ahead.

“The question of exports to Russia falls under stage three. About when to trigger stage three, if there is more destabilisation we have agreed, also myself bilaterally with the US President, that if elections take place we won't trigger stage three. We see elections have taken place successfully, but that there were also negative elements of destabilisation [in east Ukraine],” she noted.

“If there is further destabilisation, yes, stage three - we've always said it,” she added.

She also commended French diplomacy for inviting Ukraine’s pro-Western president-elect, Petro Poroshenko, as well as Russian leader Vladimir Putin i to a D-Day anniversary event on Friday in the hope of brokering a first meeting.

She spoke after the leaders of the G7 i group of wealthy nations met in the EU capital without Putin in a snub prompted by his attack on Ukraine.

Hollande also defended the warship contract.

He told media that none of the G7 leaders mentioned the deal. “The contract was signed in 2011 and is in the process of being completed. It will be fulfilled in October and the [first] ship will be delivered,” he said.

“Today we are executing the contract in full legal compliance because we’re not at that level of sanctions.”

The US state department recently criticised the arms sale as “unhelpful” in terms of signals on Western unity.

Franco-US relations have also hit a stumbling block over a US decision to fine French bank BNP Paribas billions of dollars for non-compliance with US sanctions on Cuba and Iran.

But Hollande said the fine has nothing to do with the warships.

He noted that he “respects” the independence of US regulators on BNP Paribas and that US leader Barack Obama i recently gave him a warm welcome in Washington.

He also said the G7 is united on Russia after leaders on Thursday published a communique threatening “significant additional restrictive measures ... on Russia should events so require.”

The Wall Street Journal reports that more than 400 Russian sailors will on 22 June begin training in the French port of Saint-Nazaire on how to use the “Mistral” amphibious assault vessels.

The €1.2 billion contract for two ships has created around 1,000 jobs in French shipyards and France would face steep fines for contractual non-compliance if it halts delivery.

One EU diplomat noted that even hawkish EU countries on Russia sympathise with Hollande.

“It’s easy for the US to say this deal is ‘unhelpful’ because they do not have to pay the price that France would have to pay,” the contact said.

“France also sees what other EU countries are doing. Why should it stick its neck out on the Mistrals, when [British firm] BP has just signed a major new deal with [Russian company] Rosneft when it didn’t have to?” the source added, referring to a May contract on oil exploration.

For his part, Putin in an interview with French TV ahead of his D-Day visit confirmed he would seek financial redress if he does not get his ship on time.

"It wouldn't contribute positively to the future development of our relations in the domain of technological and military co-operation," he told the France 1 broadcaster.

"But in principle, we are open to co-operation, eventually to place new orders [for military hardware] if our French partners wish to continue the co-operation", he said.