France, Russia Mistral Talks Fail, Negotiations to Resume

French-Russian talks on the amount of money that France has to return to Moscow for reneging on the Mistral helicopter carrier deal failed in May but are likely to resume later this month.

A French delegation had arrived on May 28 and held talks with a Russian team. The sticking point seems to be the amount of money to be refunded for non-delivery.

France earlier in May had offered to refund about 785 million euros ($865 million) besides re-export rights for cancelling the Mistral amphibious assault ship deal with Russia but the latter has demanded 1.163 billion euros ($1.32 billion).

"Talks on Mistral ships will surely continue. The exact date for the next meeting of the delegations is not yet set, given the fruitlessness of previous talks. The parties need to prepare," RIA Novosti quoted an unnamed source familiar with the situation as saying, adding that consultations are expected in June.

Various Russian media reported that Paris had handed its proposals to Russia on ‘ways’ to terminate the contract for two Mistral-class helicopter carriers to the Russian Navy.

Moscow does not intend to issue a re-export permit before its full money is returned, the reports said. France and Russia had signed a $1.3 billion deal for the two ships and Russia has paid up $1.1 billion so far.

"It's now a matter of fact that Russia is not taking them (the Mistral ships), and now there is only one discussion; the amount of money which should be returned to Russia," the deputy chairman of Russia's Military-Industrial Commission, Oleg Bochkarev said May 26 in a Ria Novosti report said.