France and Russia agree 'terms' on warship contract

France and Russia have all-but reached agreement to terminate a contract for two warships.

French president Francois Hollande i and Russian leader Vladimir Putin i discussed the delivery, or not, of the “Mistral” vessels at a meeting in the margins of genocide solemnities in Yerevan on Friday (24 April).

Coming out of the meeting, Hollande told press that if the ships aren’t delivered, then he has reached agreement on the “terms” of a “repayment” to Moscow.

He also urged Russia to implement the “Minsk 2” peace accord, amid ongoing EU and US concern that Russia and its proxies are preparing a fresh offensive in south-east Ukraine.

His spokeswoman added, in comments to EUobserver i, that the Yerevan meeting “changed nothing” vis-a-vis Hollande’s statement, earlier this week, that the delivery is impossible so long as the Ukraine conflict continues.

Putin mentioned his “regret” that Franco-Russian relations are “not in the best condition”, in a situation which has caused “reduced turnover” in bilateral trade.

“I think we should look for ways to restore our relationship.”

Meanwhile, a Russian state mouthpiece, the Tass news agency, cited a Russian official in the Yerevan delegation as saying that an “acceptable option” is if France pays Russia €1.5 billion in reimbursements and penalties for the original Russian payment of €1.12 billion.

The cancellation of the Mistral deal, if it takes place, will please the EU’s Russia hawks.

But it doesn’t mean that leading EU states aren’t ready to make concessions to Putin in other areas.

Steinmeier letter

EU sources on Friday told this website that German Frank-Walter Steinmeier wrote a letter, on 2 April, to European Commission president Jean-Claude Juncker urging him to adapt the EU-Ukraine free trade treaty.

The letter said the commission should show “maximum flexibility” on the implementation of the pact in order to accommodate “Russian concerns”.

It was followed up by an unpublicised meeting of EU, Russian, and Ukrainian technical experts in Brussels on 20 and 21 April.

The trade pact, or “DCFTA”, is the jewel in the crown of EU-Ukraine relations and its rejection by the former Ukrainian regime prompted the pro-Western revolution last year.

It is designed, in recent words by Ukraine’s economy minister, “to totally reorient our trade [from Russia] to the EU. We want to be part of this community, not the other community”.

A diplomat from one hawkish EU state told this website also on Friday that “some game” is afoot.

“My colleagues and I were worried, from the beginning, that the EU’s decision [last year] to delay the entry into life of the DCFTA is a sop to Moscow to start serious talks with Berlin,” he added.

“Steinmeier couldn’t have sent this letter without [German chancellor] Merkel’s say-so”.

Crocodile diplomacy

Putin, in separate remarks at the Armenian genocide memorial on Friday, also said “the fraternal peoples of Russia and Armenia have always been characterised by particular spiritual closeness and mutual support”.

He also spoke of “the horrors that arise from religious enmity, aggressive nationalism, and xenophobia”.

“Sadly, we see that neo-fascism is once again rearing its head in many parts of the world, radical nationalists are seeking power, and anti-Semitism is on the rise”.

His remarks on “aggressive nationalism” and “neo-fascism” elsewhere come despite the aggressive nationalism in Russia’s own propaganda and its support for neo-fascist parties in the EU.

His claim to “fraternal” Armenian-Russian relations is also open to question.

Russia, in late 2013, “blackmailed” Armenia, in the words of one Armenian official, into ditching a Ukraine-type DCFTA.

It sold billions of dollars of offensive weapons to Armenia's enemy, Azerbaijan, and threatened to impose an economic blockade.

Armenia instead joined Putin’s “Eurasian Union”.

A second Armenian source told EUobserver the Russian-led union is seen in Yerevan as “a mess, a hollow entity, a bit like the CIS [Commonwealth of Independent States, an older Russian bloc] … nothing is being done to implement it”.

He noted that, given Russia’s assault on Ukraine, “perhaps our decision to abandon the DCFTA was not too high a price to pay to prevent something similar happening here”.

He added that Yerevan is waiting for the Eurasian Union to fall by the wayside and for conditions inside Russia to improve before resuming EU integration.