Wednesday, June 4, 2014

France breaking from US /EU solidarity on Russia sanctions regime ( June 4 , 2014 ) ? France Protests " not reasonable " US fine ( threatens free trade agreement between US and EU ) ........ France additionally responds To US BNP Fine, Will Train Hundreds Of Russian Seamen To Operate French-Made Warship ....... As France considers its own trade and relations with Russia trumping the concerns of US and EU politicians , note Germany has opened a probe over NSA spying ( Germany hasn't forgiven that episode it would appear , distrust will continue ) - Germany to probe alleged NSA snooping of Chancellor Merkel's phone ......

French FM says US bank fine 'not reasonable'

Reported $10bn to be levied on BNP Paribas could damage free-trade agreement between US and EU, Laurent Fabius warns.

Last updated: 03 Jun 2014 14:04
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The Wall Street Journal says BNP Paribas could face a fine of up to $10bn [AFP]
Laurent Fabius, France's foreign minister, has dismissed as unreasonable a reported fine of $10bn that the US is seeking to place on bank BNP Paribas, and warned that it could threaten a free trade agreement between the US and Europe.
BNP Paribas, France's largest bank, set aside $1.1bn last year after the US began investigating it for alleged sanctions violations, but this spring said the fines could be "far in excess", the Reuters news agency reported.
Its share price slumped last week after the Wall Street Journal that reported the fine could be $10bn.
"The sanction has to be proportional and reasonable. These amounts are not reasonable" Fabius told France 2 television on Tuesday.
He said the fine could have a negative effect on negotiations on a free-trade agreement between the EU and the US,the fifth round of which was held in Washington on May 19, the AFP news agency reported.
"This trade partnership can be established only on a basis of reciprocity. But here, we would have the example of an unjust and unilateral decision", Fabius said.
Meanwhile, the New York Times newspaper reported that Christian Noyer, governor of the Bank of France, had visited top US officials on the case in New York last week to warn that such a fine, equivalent to 7.4 billion euros, could have grave effects on the financial system.
President Francois Hollande has also recently raised concerns about a plea deal with the White House, the daily said.

Russia to receive Mistral warships on time if no sanctions imposed - Hollande

 June 05, 4:11 UTC+4
“France will fulfill its contract obligations and sees no obstacles for delivering the warships on time,” French President said
BRUSSELS, June 05 /ITAR-TASS/. France to deliver its two Mistral-class helicopter-carrying warships to Russia in line with the schedule stated by the bilateral contract, if Europe imposes no further sanctions in regard to Moscow, French President Francois Hollande said.
“France will fulfill its contract obligations and sees no obstacles for delivering the warships on time,” Hollande said following the first day of the Group of Seven most industrialized countries (G7) summit in Brussels. “The situation will be certainly different…, if European sanctions are imposed [against Russia].”
The European Union jointly with the United States declared a set of sanctions against Russia earlier in the year, after the republic of Crimea seceded from conflict-hit Ukraine and later merged with neighboring Russia.
The 1.12 billion euro contract for building two Mistral-type ships was signed by the Russian defense exporting company Rosoboronexport and French DCNS in June of 2011. Under the contract, Russia is to receive the first of the two warships in October this year.
“If there are no further sanctions imposed before the end of October, the warships will be handed over to Russia. This is quite simple. Moreover, we must not forget that the breach of the contract envisages a multi-billion compensation,” Hollande said.

Russia is currently holding the rotating chair in the Group of Eight (G8) most industrialized countries, which besides Russia include France, the United States, Britain, Germany, Japan, Italy and Canada. However, on March 24, 2014, G7 leaders announced they would not attend the Sochi Summit in Russia and would instead hold a G7 meeting in Brussels on June 4-5, 2014.
The announcement came after Russian President Vladimir Putin signed on March 21 the federal constitutional law on accession of two new constituent members to the Russian Federation - the Republic of Crimea and the federal city of Sevastopol.
Two Mistral-type ships are now under construction at Saint-Nazaire, France, and St. Petersburg, Russia.
Mistral landing helicopter carriers are capable of performing four tasks at the same time: receive helicopters, land troops, and act as a command post and a floating hospital.
The Mistral-type helicopter carriers have a displacement of 21 tons, maximum body length - 210 meters, speed - 18 knots, range - up to 20,000 miles. The crew is 170 members, and in addition it can take on board 450 people. Each ship is capable of carrying a fleet of 16 helicopters. Six of them can be simultaneously deployed on the flight-deck. The cargo deck can accommodate more than 40 tanks or 70 motorized vehicles.

France Responds To US BNP Fine, Will Train Hundreds Of Russian Seamen To Operate French-Made Warship

Tyler Durden's picture

In the aftermath of the Russian sanctions, which French president Francois Hollande vehemently approved after constantly slamming Russia's involvement in the Ukraine conflict, and even went so far to threaten the cancellation of a delivery of a powerful French-made amphibious assault warship, the Mistral, to be delivered to Russia something happened: in the latest demonstration of its impotence to punish domestic bankers, the US decided to slap a French bank, BNP Paribas with a $10 billion fine for money laundering.
As a result, France has suddenly found itself battling two populist fronts: on one hand it had to continue its foreign policy track of siding with NATO and the US when it comes to Russian developments; on the other it had to responds to howls of protest from the population bashing the US for having the temerity to punish its flagship bank (recall "France Furious At US $10 Billion BNP "Masterful Slap", "Racketeering" Fine"). Today, it was revealed that in weighing the two evils, it picked what it thought was the lesser one, and as the WSJ reports "a group of 400 Russian sailors are scheduled to arrive on June 22 in the French Atlantic port of Saint-Nazaire to undergo months of instruction before some of them pilot the first of two Mistral-class carriers back to Russia in the fall, said one of these people."
As the WSJ explains, the training is a pivotal step that deepens France's commitment to fulfilling the €1.2 billion ($1.6 billion) contract to supply Russia with the carriers, which are built to launch amphibious attacks with landing craft, helicopters and tanks.
That this is taking place even as the U.S. and other allies have called on the government of President François Hollande to cancel the contract, "arguing the ships will significantly enhance Russian naval power at a time when the Ukraine crisis has raised tensions with the Kremlin to their highest levels since the Cold War," demonstrates conclusively that money talk and diplomacy walks. It also demonstrates that the increasingly more fragile western alliance against Russia (further recall that German commercial interests have made it quite clear they will not agree with any further Russian sanctions over fears of lost revenue), Obama's foreign policy partners are dropping like flies when the opportunity cost is lost business with the Kremlin.
Paris insists the training doesn't tie its hands and that it won't make a final decision on the delivery until October.But Mr. Hollande's government also has said France intends to honor the contract, and privately officials give no indication they will renege.

France's ability to reverse course on the delivery, defense analysts say, will be diplomatically and commercially constrained once the Russian Navy arrives on its shores to begin the training and prepare to drive the carrier home.

"Four hundred Russian trainees are rather difficult to keep below the radar," said Nick Witney, a defense analyst with the European Council on Foreign Relations. Other observers say that Paris's credibility to deliver on future contracts is also at stake.
As noted, Obama will not be happy and the training of Russian seamen will surely be a topic of hot debate between Obama and Hollande when the two meet in Paris today, on the eve of D-Day commemorations on the beaches of Normandy, where ironically Russia's Putin will not be present, but Ukraine's new "chocolate king" president will be.
It is not just Obama who will be furious with the latest revelation, further impairing his foreign policy credibility: other European nations are sure to voice their anger too, most notably Poland which feels particularly threatened by developments in the Ukraine:
For months, France has faced staunch opposition from the Obama administration and other Western governments including the U.K. to the plan to sell the ships—criticism that has grown in the wake of Russia's annexation of Ukraine's breakaway Crimea region. In an interview published in French daily Le Monde on Monday, Polish Foreign Minister Radoslaw Sikorski warned Russia might use the ships to "threaten neighbors."
"We have named Russia as an aggressor in Crimea, and I don't think France would want to be supplying useful arms to an aggressor," Mr. Sikorski said.
However, as stated earlier money, Russian money, talks:
The tug of war over the Mistral illustrates how Europe's reliance on Russian resources risks unraveling strategic alliances that helped the West win the Cold War. The European Union is deeply divided over how far the bloc should go in imposing sanctions on Russia over its Ukraine incursion. Russian natural gas powers homes and businesses across Germany, the EU's biggest economy, while Russian oligarchs store their fortunes in U.K. banks.

France's economy—hobbled by decades of de-industrialization and rising labor costs—is hungry for large defense contracts that could help get the country's beleaguered shipyards back on their feet. Saint Nazaire, a port which boasts a proud history of building France's biggest ships, now relies on the occasional cruise-ship contract for economic survival.

The government says about a thousand jobs are at stake, in a country with more than 10% unemployment and a stalled economy.

Calling off the Mistral contract, a French official said, would be akin to "shooting yourself in the foot," forcing Paris to take the costly step of reimbursing Moscow.

France has already completed the first ship and built half of the second Mistral, which is scheduled for delivery in 2015. The second ship is named The Sevastopol after the Crimean port that serves as a headquarters for Russia's Black Sea Fleet.
Incidentally, the Mistral will fill a key missing void in Russia's Black Sea fleet: the ability to launch amphibious assaults on bordering nations, such as Georgia.
The Mistral, which looms over the town, is a potent weapon. The length of more than two football fields, the ship is designed to edge up to a shoreline and deploy more than a dozen tanks and attack helicopters as well as hundreds of troops. This type of ship is also an integral part of the North Atlantic Treaty Organization's defenses, using sensitive communications technology to coordinate operations with other NATO ships. The potential transfer of that technology to Russia has long worried policy makers on both sides of the Atlantic.

The ship also plugs a crucial gap in Russia's armed forces. Moscow boasts one of the world's largest armies and a formidable air force. But Russia's Black Sea fleet lacks an amphibious vessel like the Mistral, capable of launching a land invasion. That weakness deprived Moscow of a crucial knockout punch in 2008, when Russian troops invaded Georgia but never managed to dominate the former Soviet countries shoreline, forcing a stalemate.

"A ship like that would have allowed the Black Sea Fleet to accomplish its mission in 40 minutes," Russian Navy Admiral Vladimir Vysotkiy said at the time.
Ironically, it was none other than former French president Sarkozy, who had brokered the truce between Russia and Georgia in 2008, who proposed building the ship which would have made Russia's annexation of Georgia a walk in the park.
The proposal to sell France's prized warship to Russia grew out of the Georgian conflict. In October 2008, France's president at the time, Nicolas Sarkozy met with his counterpart President Dmitry Medvedev in the Alpine town of Evian in a bid to shore up a fragile truce Mr. Sarkozy had brokered between Russia and Georgia weeks earlier. By offering to sell Russia the Mistrals, Mr. Sarkozy aimed to persuade the Russians that NATO was no longer an enemy.

Georgian President Mikheil Saakashvili flew to Paris to protest the sale, but Mr. Sarkozy brushed aside his complaints during a tense meeting in the Élysée Palace, according to a French official. "Look Mikheil, Russia is not going to invade Georgia with this boat," Mr. Sarkozy said, according to the official. Mr. Sarkozy then quipped that it was no use worrying about a Russian invasion, because the Russians were "already in your territory."

Years later, the sale has come back to haunt France's government.
And now it is set to haunt the US as well: "Last month, Assistant Secretary for Europe Victoria Nuland told U.S. lawmakers: "We have regularly and consistently expressed our concerns about this sale."
Things are only set to get worse for the State Department once photos of hundreds of "sanctioned" Russian troops being trained by the French hit the front pages of newspapers around the world, in clear defiance of US policy:
French officials haven been poring over the technical details of the training session and deliberating how to temporarily house the Russian troops while they are in French territory without attracting too much attention, said one of the people familiar with the matter.

Russia and France had planned to lodge the troops in a Russian vessel docked in Saint-Nazaire, but the person said French officials are reviewing more discreet options.
Meanwhile it is none other than Putin who continues to have the last laugh, again, and again.

And look at what's happening in Germany ....

Germany to probe alleged NSA snooping of Chancellor Merkel's phone

Published time: June 04, 2014 11:32
Reuters/Kai Pfaffenbach
Reuters/Kai Pfaffenbach
The German Federal Prosecutor has opened an investigation into the alleged surveillance of Chancellor Angela Merkel’s phone by the US National Security Agency (NSA). The tapping was revealed thanks to the former NSA contractor Edward Snowden’s leaks.
"I informed parliament's legal affairs committee that I have started a preliminary investigation over tapping of a mobile phone of the chancellor," Prosecutor Harald Range said after addressing the committee.
The NSA is not going to figure in the probe for now, as the case on espionage is opened against the "unknown" suspected party.
Extensive preliminary investigations have established that sufficient factual evidence exists that unknown members of US intelligence services spied on the mobile phone of Chancellor Angela Merkel,” Range's office said.
Prosecutors will also continue to monitor the “possible massive collection of telecommunications data of German citizens by British and American intelligence services.” Efforts against “cyber-espionage” will be intensified.
Earlier, German media said the investigation was likely not to take place at all. Range was reported to believe the proceedings would be purely “symbolic” since it is impossible to gather evidence about the activities of the NSA and its British counterpart, GCHQ, on German soil.