Germany scraps $140m arms deal with Russia

Berlin - Germany has stopped a major deal to provide a fully equipped training camp to Russian forces due to the ongoing crisis in Ukraine, the government said on Monday.

Vice chancellor and economy minister Sigmar Gabriel has withdrawn his authorisation for the training camp project, which had already been put on hold in March due to Moscow's "indefensible" annexation of Ukraine's Crimea region, his spokesperson said.

The spokesperson confirmed a report in the daily Sueddeutsche Zeitung citing a document including the decision to scrap the $140m contract.

Russia previously called the decision to halt the arms deal "unconstructive", accusing Berlin of acting under pressure from the United States.

German defence group Rheinmetall, the contractors for the military training camp, had said in March that the company would fulfil its contractual obligations to build the centre, which German media said would train 30 000 soldiers a year.

The camp was to have been built in the Volga region, and was scheduled to open later this year.

The firm could not immediately be reached for comment.

By stopping the deal, Germany goes beyond economic sanctions against Russia agreed last week by the European Union.

Those restrictions ban arms exports to Russia but do not cover existing contracts including a $1.6bn deal by France to deliver two Mistral warships to Russia.

Paris has said it would go ahead with the sale of the first vessel, drawing criticism from European partners including Germany and Britain.