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| France Reimburses Russia for Warships as Deal Collapses Under Sanctions | |
| (about 1 hour later) | |
| MOSCOW — France has reimbursed Russia for two warships that were never delivered after economic sanctions imposed against Russia last year blocked the deal. | MOSCOW — France has reimbursed Russia for two warships that were never delivered after economic sanctions imposed against Russia last year blocked the deal. |
| Russia annexed Crimea, a peninsula in Ukraine last year, an act that drew international condemnation and prompted economic sanctions from the United States and Europe. The two Mistral warships, built to carry helicopters and sold to Russia in 2011, were casualties. | Russia annexed Crimea, a peninsula in Ukraine last year, an act that drew international condemnation and prompted economic sanctions from the United States and Europe. The two Mistral warships, built to carry helicopters and sold to Russia in 2011, were casualties. |
| On Wednesday, President Vladimir V. Putin of Russia spoke with his French counterpart, François Hollande, by phone and they later released statements acknowledging that the deal had collapsed and that Russia had been fully reimbursed. They did not say how much money Russia received. Previous reports in the Russian news media put the sum at about $1.3 billion. | On Wednesday, President Vladimir V. Putin of Russia spoke with his French counterpart, François Hollande, by phone and they later released statements acknowledging that the deal had collapsed and that Russia had been fully reimbursed. They did not say how much money Russia received. Previous reports in the Russian news media put the sum at about $1.3 billion. |
| “France has already transferred these funds,” the Kremlin news service said in a statement on its website. “Moscow considers the Mistral question completely resolved.” | “France has already transferred these funds,” the Kremlin news service said in a statement on its website. “Moscow considers the Mistral question completely resolved.” |
| The ships were the biggest purchase of military equipment by Russia from a Western country since the fall of the Soviet Union, said Ruslan Pukhov, the director of the Center for Analysis of Strategies and Technologies in Moscow. The failure of the deal is symbolic of the profound break with the West over the conflict in Ukraine. | The ships were the biggest purchase of military equipment by Russia from a Western country since the fall of the Soviet Union, said Ruslan Pukhov, the director of the Center for Analysis of Strategies and Technologies in Moscow. The failure of the deal is symbolic of the profound break with the West over the conflict in Ukraine. |
| The outcome had been long expected, and Russian news reports had noted that the sticking points were mainly about how much money would be returned. | The outcome had been long expected, and Russian news reports had noted that the sticking points were mainly about how much money would be returned. |
| Recently, Russia’s economy has been declining along with the price of oil, and Mr. Pukhov pointed out that the reimbursement might actually be welcomed in the Russian government. The ruble has fallen significantly in value against the euro since the purchase, a pattern that would have made the ships more expensive for Russia, he said. | Recently, Russia’s economy has been declining along with the price of oil, and Mr. Pukhov pointed out that the reimbursement might actually be welcomed in the Russian government. The ruble has fallen significantly in value against the euro since the purchase, a pattern that would have made the ships more expensive for Russia, he said. |
| “Under the current circumstances, this is almost a happy ending for Russia,” Mr. Pukhov said, adding that even if they had been delivered before the sanctions, maintaining the ships without help in servicing them from France would have been difficult. | “Under the current circumstances, this is almost a happy ending for Russia,” Mr. Pukhov said, adding that even if they had been delivered before the sanctions, maintaining the ships without help in servicing them from France would have been difficult. |
| “Imagine you bought two Bentleys but you don’t have Bentley technicians to keep them up,” he said. “In a rather short time they would rot.” | “Imagine you bought two Bentleys but you don’t have Bentley technicians to keep them up,” he said. “In a rather short time they would rot.” |
| The sale agreement was signed by Mr. Hollande’s predecessor, Nicolas Sarkozy, and was touted as a major advance in trade and foreign relations between France and Russia. But the sale later became a problem for Mr. Hollande, who came under intense pressure from the United States and other European countries to cancel it. | The sale agreement was signed by Mr. Hollande’s predecessor, Nicolas Sarkozy, and was touted as a major advance in trade and foreign relations between France and Russia. But the sale later became a problem for Mr. Hollande, who came under intense pressure from the United States and other European countries to cancel it. |
| The ships are currently in France. Russian news accounts have said that the first was supposed to have been delivered last year and the second in 2016. | The ships are currently in France. Russian news accounts have said that the first was supposed to have been delivered last year and the second in 2016. |
| The ships are valued for their versatility and agility, defense experts said. Mr. Pukhov said that the French had conducted training for Russian sailors. | The ships are valued for their versatility and agility, defense experts said. Mr. Pukhov said that the French had conducted training for Russian sailors. |
| The Russian news agency Itar-Tass reported that the Russian equipment installed on the ships would be removed this fall, at which point France would take back full ownership. | The Russian news agency Itar-Tass reported that the Russian equipment installed on the ships would be removed this fall, at which point France would take back full ownership. |