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Cutting losses
Kremlin: Money or Mistrals Will Do

After Vladimir Putin’s meeting with French President François Hollande, the Kremlin said that Russia would accept its money back as a resolution to the dispute with France over non-delivery of two Mistral-class warships. When France initially punted, the Kremlin had insisted on either delivery or repayment plus damages, but it has apparently now dropped the latter condition.

The deal for the two ships built in France is worth some $1.7 billion, and if all had gone according to plan it would have been followed by another to build two more ships in Russia. But after Russia’s annexation of Crimea and subsequent destabilization of eastern Ukraine, EU leaders raised concerns. Paris eventually suspended delivery of the powerful ships, which carry helicopters and troops and are designed to enable the kind of rapid amphibious assaults that Russia does not now have the equipment to carry out effectively.

When Hollande finally blocked the deal, he conditioned the indefinite suspension on Russia’s acting in accordance to the terms of the Minsk Protocol ceasefire agreement for eastern Ukraine. It’s not unreasonable to conclude, then, that if Russia is willing to cash out permanently it doesn’t plan on behaving well in eastern Ukraine for quite a while.

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  • Michael Williams

    What if the Ukraine Crimea affair was just a smoke screen to hide larger issues. If they didn’t do it and there weren’t sanctions and they just couldn’t come up with the cash what would the markets think? The sequence of events sure is a handy way of blaming a slowing EU on Russian bad behavior. It leaves us to believe they have the purchasing power and will come back to buy again after they play nice. As we now know the bottom falling out of the barrel is leaving Russia and others hurting, a good time for a smoke screen.

  • Fat_Man

    Message to Vlad: Molon Labe.

  • Jojo Jobxyzone

    Given the price of a barrel – they’d rather have the money. Tough economic times ahead.

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