France and Russia forge alliance with gas, warship deals

The agreement between GDF Suez and Gazprom, the majority shareholder in Nord Stream, is to see the French firm take a nine percent stake in the pipeline and Russia to increase gas deliveries to France by 1.5 billion cubic metres a year from 2015.

"By entering into Nord Stream and increasing its gas purchase from Russia, GDF Suez aims at contributing to the security of supply of Europe," the French company's CEO, Gerard Mestrallet, said in a statement.

The energy pact was signed in the presence of the French and Russian leaders at a press event in the Elysee Palace.

French President Nicolas Sarkozy at the same time confirmed that France is in "exclusive talks" to sell four Mistral-class amphibious assault ships to Russia.

Two of the vessels are to be built in France and two in Russia and will be sold without their weapons systems.

"How can we say to our Russian partners we need you for peace, we need you to resolve a number of crises in the world, particularly the Iranian crisis ... but we don't trust you, we can't work with you on Mistral?" Mr Sarkozy said at the press event.

"We wish to put the Cold War behind us. The time has come to turn the page and look to a new era."

Mr Medvedev called the defence deal "a symbol of trust between our two countries."

The gas and the warship developments are unpopular among France's EU and Nato allies in eastern Europe.

Nord Stream is seen by Poland and the Baltic countries as giving Russia a free hand to bully its former vassals by switching off their gas while keeping it flowing to Germany, France and the Netherlands.

The Latvian and Lithuanian defence ministers at an EU gathering in Majorca last week complained to their French counterpart over the Mistral sale, with Estonian analysts saying the vessels would "change the balance of power" in Russia's favour in the Baltic and Black Seas.

Poland is equally concerned by what it calls the "highly sensitive" issue and is exploring opportunities for a meeting at foreign minister level with France on the topic.

Mr Sarkozy on Monday also promised to urge EU countries to simplify demands for a visa-free travel pact with Russia, in remarks likely to irk Georgia and Ukraine.

A quick EU-Russia travel deal would see people in rebel strongholds Abkhazia and South Ossetia, the vast majority of whom illegally hold Russian passports, enter the EU more easily than people in Georgia proper. Ukraine has been battling with Brussels for the past three years for a "roadmap" for visa-free travel to no avail.