France/Russia - Putin visit

France and Russia sign pipeline deal

Article published on the 2009-11-27 Latest update 2009-11-27 16:04 TU

Russian Prime Minister Vladimir Putin and French Prime Minister Francois Fillon in the garden of Rambouillet castle on 27 November
(Photo: France)

France and Russia agreed a number of important deals on Friday during Prime Minister Vladimir Putin’s trip to France this week. The two countries' main energy companies singed an important gas pipeline deal, French investment in the Lada car manufacturer, and agreed that the French would consider selling Russia a naval command ship.

After talks, French Prime Minister Francois Fillon said, “we have embarked upon complete co-operation with Russia”, adding that France wants a “common economic and human space between Russia and the European Union”.

Fillon began discussions on the pipeline in September during a visit to Moscow and the deal signed on Friday means that French energy company EDF, will take a ten per cent stake in the South Stream project.

The South Stream project will pump gas from central Russia under the Black Sea, which will avoid transit through Ukraine.

“An accord has just been signed between EDF and Gazprom on the entry of the French company into a great international transport project,” said Putin.

The deal is also expected to enable Gazprom to draw on EDF’s electricity production, an unnamed French official told the AFP news agency. But the same official insisted that this is not a geopolitical shift for France, which will continue to support Nabucco, an alternative European project which avoids Russia.

Georgia, some of the Baltic countries and other former Soviet states are concerned at the Franco-Russian discussions.

Moscow would like to buy the Mistral, a 21,000-tonne amphibious assault ship that can carry helicopters, landing craft and tanks. They then want to construct four more under licence.

But selling the electric propelled vessel, the second largest in the French fleet, to Russia, has prompted reaction from Lithuania, Latvia and Estonia. On Wednesday they asked Paris for clarification on what it intends to sell and what it can be used for.

France is considering the proposal, and Fillon said they are “open to this co-operation with Russia, including in defence”.

The third and final deal concerned troubled Russian car manufacturer Avtovaz, which produces nearly one million cars a year, including the Lada. But the world financial crisis has hit the firm hard, and forced Putin to look for fresh investment.

French carmaker Renault already owns 25 per cent of the company and the new agreement secures around 240 million euros in additional cash.