• Merkel: 'The question of exports to Russia falls under stage three' (Photo: consilium.europa.au)

Germany backs France on Russia warship contract

05.06.14 @ 09:48

  1. By Andrew Rettman
  2. Andrew email

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

Chancellor Angela Merkel 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 adopting them because Russia did not stop Ukraine’s 25 May 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 commended French diplomacy for inviting Ukraine’s pro-Western president-elect, Petro Poroshenko, and Russian leader Vladimir Putin to a D-Day anniversary in France on Friday in the hope of brokering a meeting.

She spoke after the leaders of the G7 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.

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 recently gave him a warm welcome in Washington.

He also said the G7 is united on Russia, after leaders on Thursday published a communique which threatened “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 some 1,000 jobs in French shipyards and France would face big fines for contractual non-compliance if it halts delivery.

One EU diplomat said 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 noted.

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

For his part, Putin in an interview ahead of his D-Day visit said he would seek financial redress if he doesn't 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.