* France may suspend naval contracts in next sanction phase
* Suspending Mistral contract a tough political decision
* France backtracks on comments Russia suspended from G8
By Vladimir Soldatkin and John Irish
MOSCOW/PARIS, March 18 Russian Deputy Prime
Minister Dmitry Rogozin criticised France on Tuesday for saying
it may cancel a 1.2 billion euro ($1.67 billion)
helicopter-carrier contract with Moscow over the Ukraine crisis,
and France seemed to back down on the issue.
French Foreign Minister Laurent Fabius raised the
possibility on Monday of scrapping the deal depending on further
sanctions against Moscow over its seizure of Ukraine's Crimea
region, but later said he was only considering delaying it.
"France is starting to undermine confidence in it as a
reliable provider in the very sensitive sector of military and
technical cooperation," Rogozin, who oversees Russia's defence
industry, said on Twitter.
French officials have shied away from discussing whether the
2011 contract for two Mistral helicopter carriers with an option
for two more with Russia could be suspended, a potentially
politically awkward sacrifice, to show French resolve.
Fabius had said that if Putin pressed ahead, France would
"consider cancelling the sales", but on Tuesday he said, "What's
being considered is the suspension of these contracts."
"On the one hand we understand that we can't deliver
military hardware given (Russia's) behaviour, but on the other
hand there is the reality of jobs and the economy," he told
Europe 1 radio.
The long-discussed purchase was Moscow's first major foreign
arms purchase in the two decades since the fall of the Soviet
Union and the carriers can hold up to 16 helicopters, such as
Russia's Mistral purchase would give it access to advanced
technology, alarming some of France's NATO allies, especially in
the aftermath of Russia's 2008 war with Georgia.
Former President Nicolas Sarkozy had hailed the signing of
the Mistral contract as evidence the Cold War was over. The
contract has created about 1,000 jobs in France.
The first carrier, the Vladivostok, is due to be delivered
by the last quarter of 2014. The second one, named Sebastopol
after Crimea's crucial seaport and illustrating its importance
to Moscow, is supposed to be delivered by 2016.
Fabius insisted that no decision had been made and that it
would only happen in a third round of European Union sanctions.
"It can only be envisaged in the framework of general
sanctions. It cannot just simply be France," he said.
French officials privately looked to play down the possible
suspension saying the idea was to avoid this at all costs.
"We are in the second phase (of sanctions) and we want to
stay in that phase because our objective is a political
solution," one government source said.
France's foreign ministry also backed down on comments made
earlier by Fabius saying Russia had been suspended from the G8.
"We are suspending our work and our participation in the G8
as has already been announced," spokesman Romain Nadal told
reporters, referring to the scheduled G8 Summit in Sochi in
June. "That's what the minister meant."