After a year of negotiations, French President François Hollande confirmed Friday that his government would refund Russia a sum “under €1.2 billion” for not delivering two Mistral warships.
Exactly how much France must pay has been the subject of much media speculation. Le Figaro reported that the bill would end up being below €1 billion. Russian media says the money has already been wired.
What is clear is France will repay all the money Russia spent for the ships — reportedly €785 million — and the costs that Moscow incurred in training troops to operate them.
Speaking to journalists in Egypt at the inauguration of the new Suez Canal expansion on Friday, Hollande said, “The sum is exactly what Russia has contributed and training costs which have been incurred … France will not have to pay a penalty, and therefore will have no additional costs related to the breach of the contract.”
“The French Parliament has before it a bill to ratify the agreement between the two governments and all data will be provided [in September],” Hollande said. “Less than €1.2 billion will be returned to Russia … You will have the precise figures when it appears [in parliamentary documents].”
The two countries signed a contract for the sale of the warships in 2011, under then-French President Nicolas Sarkozy, long before the escalation of the crisis in Ukraine. The first ship was to be delivered last year, the second this year.
Facing significant pressure from the EU and U.S. over Russia’s role in the Ukrainian conflict, Hollande suspended the deal last year.
Since then, Russia and France have been locked in talks about how much money France would have to pay to terminate the contract and over the ultimate fate of the ships.
While Russia appears to have largely got its way, it has decided not to exercise a penalty clause for non-delivery of the warships, which could have cost France hundreds of millions more.
There had been speculation that the Mistrals would have to be scuttled. Instead, France will be free to find new buyers after a Russian team dismantles all their equipment on board. The Russian press reported this will be done next month.
Hollande is confident that France will find a buyer for the Mistrals, which cost over €1 million a month to maintain.
“I also want to clarify for those who are worried, that these ships generate demand from many countries and France will have no difficulty finding a taker for these ships, without additional cost to our country,” he said.
In an interview on French radio station RTL Thursday, French Defense Minister Jean-Yves Le Drian confirmed the contract was terminated because of Russia’s role in the Ukrainian crisis.
“The crisis is still there,” he said. “It seemed to the President that it was not desirable to add risk to the threat and to deliver these two ships.”
The Kremlin press service did not respond to POLITICO’s requests for comment.