Sarkozy offers to sell 4 warships

French President Nicolas Sarkozy has said France was in talks to sell not one, but four Mistral class warships to Russia, as President Dmitry Medvedev seeks to clinch a strategic alliance with the NATO member during his three-day visit this week.

France agreed to a $1 billion purchase of 14 Soyuz rockets from Russia while Russia reiterated its stance that new treaties against Iran were a possibility.

The Mistral deal has sparked international worry, with Eastern European neighbours concerned Russia could use the 230,000-tonne warships, which can carry 16 helicopters and other weapons and troops.

But NATO has sought to dispel those fears.

"I understand very well the concerns raised by a number of allies and I think it's understandable taking into consideration history as well as recent events, but I take it for granted that Russia will not use or misuse such military equipment against any neighbour," NATO Secretary-General Anders Fogh Rasmussen was quoted by Bloomberg as saying on Wednesday.

Russia is seeking the Mistral ships to improve its manoeuvring capabilities in the Black Sea, which it tried to secure control over during its conflict with Georgia in August 2008. Georgia as well as the Baltic States have raised concerns over the sale since talks were reported involving the purchase on one warship, after Prime Minister Vladimir Putin's visit to France in November.

Then, asked specifically if he could guarantee the ship would not be used against Georgia, Putin said, "I can only promise that if we buy anything, we will use the weapons wherever we deem necessary," Itar-Tass quoted him as saying.

Ariel Cohen, a senior research fellow at the Heritage Foundation, wrote in his blog that France was "seemingly oblivious to NATO members' objections and Russia's continued violation of the August 2008 ceasefire agreement in Georgia (brokered by President Sarkozy)," and that the sale of the Mistral ships "should concern the US as well as Europe."

Medvedev pledged an increasingly tough line towards Iran during the meeting, saying he could back new sanctions.

"We are optimists and we are not losing the feeling that we may achieve success," Reuters quoted Medvedev as saying. "Nonetheless, if it doesn't work out ... Russia is ready to consider with our other partners the question of introducing sanctions.

The three-day visit yielded a number of key business deals, with Medvedev lauding 35 years of gas corporation and noting advances in the Nord Stream and South Stream pipeline projects.
Gaz de France agreed to take a 9 per cent stake in Gazprom's Nord Stream project, with construction set to begin in April. The deal will allow GDF Suez to increase its gas supplies by 10 per cent, Reuters reported, citing an industry source.

Meanwhile, talks were ongoing for Electricite de France to acquire shares in the South Stream gas pipeline. Under a preliminary agreement with Gazprom last year, the electricity company could get up to 20 per cent in the project, translating into 6 billion cubic meters of gas to power the plants it will set up in Europe, Bloomberg reported.

French satellite launch firm Arianespace has said it ordered 14 Soyuz carrier rockets from Russia for about $1 billion, and confirmed plans for a launch in the second quarter of this year, RIA Novosti reported.

Sarkozy also encouraged Medvedev on his internal reforms, urging him to pursue modernisation and the fight against corruption.

The meeting appeared to enhance increasingly warm relations between France and Russia since Sarkozy became president in 2007 and sought to boost the partnership.