Suspending warship delivery to Russia may make France suffer economically

World Today

The decision by French President Francois Hollande to indefinitely suspend the delivery of the first of two Mistral helicopter carriers ordered by Russia could have a big financial impact on France. CCTV America’s Kate Parkinson reported this story from Paris.

Suspending warship delivery to Russia may make France suffer economically

The decision by French President Francois Hollande to indefinitely suspend the delivery of the first of two Mistral helicopter carriers ordered by Russia could have a big financial impact on France. CCTV America's Kate Parkinson reported this story from Paris.

Citing the ongoing crisis in eastern Ukraine,  France’s suspension of the Mistral-class Vladivostok warship due to be handed over to Russia in November as part of a two-ship deal meant a serious dilemma for Paris.

Russian President Vladimir Putin made it clear that if Moscow doesn’t receive the warships, it expected to get a refund. That would hit France hard — the Mistral deal is worth 1.2 billion euros ($1.5 billion).

If Paris delivers the warships, it faces the wrath of its allies around the world. But if it cancels the contact, it could be liable for hefty fines and gain a reputation as an unreliable arms export partner.

France ranks as the fifth largest exporter of arms, accounting for 5 percent of world deliveries between 2009 and 2013.

One contract under negotiation that France does not want to jeopardize is the sale of 126 Rafale fighter jets to India, which is a deal that is worth an estimated 12 billion euros ($15 billion).

However, defense experts said concerns over the impact of cancelling the Mistral contract could have on other arms negotiations are overblown.

“It happens. We are not the first. We are not the only country where this kind of thing can happen, so in reality it is not a problem. There is not a trust issue with regard to France,” Jean-Pierre Maulny, the deputy director from Institute for International and Strategic Affairs, said.

“I would say that this is the normal life of international relations in regards to arms exportation. India had a choice to be supplied by the United States, Europe, Russia, France. France was chosen precisely because it was a choice based on the procurement security guarantee as well as a choice based on the technology.”

While it appeared increasingly likely that the Mistrals wouldn’t make it into Russian hands, it could be hard to find a new buyer.