It was a deal supposed to symbolize the improvement in relations between Russia and the West after the end of the Cold War. But it’s as good a barometer of those relations in death as it was in life.
France has taken back possession of two state-of-the-art ‘Mistral’-class assault ships that it agreed to build for Russia back in 2010, but refused to deliver after Russia annexed the Ukrainian region of Crimea and fomented a civil war the east of the country last year.
France is paying heavily for tearing up the contract. Although the two sides have refused to specify the exact amount, reports from both countries say Paris will reimburse over €1 billion ($1.08 billion) in advance payments made over the last few years. Work on the two ships has guaranteed thousands of jobs at a naval dockyard in western France at a time when the country, like every other NATO member, has been desperately looking for export orders to fill the gaps left by shrunken domestic defense procurement. To add insult to injury, it’s costing another €1 million a month just to keep the ships in mothballs while the government looks for another buyer, while opposition lawmakers are claiming it will cost up to another €400 million to remove and return all the Russian equipment specially installed.
Defense Minister Jean-Yves Le Drian tried to put a brave face on it Thursday, saying that he was “convinced there will be other buyers.”
But the truth is that Paris has been in a lose-lose position ever since the European Union imposed sanctions along with the U.S., Canada and others against Russia last year. Honoring the contract would have cemented Russian supremacy on NATO’s south-east flank in the Black Sea—precisely the area where it had executed the biggest land grab in Europe since World War 2. But reneging on it makes France look like an unreliable supplier in a market where buyers place a huge premium on certainty. As power shifts more and more to cash-rich emerging countries who don’t like their often dubious human rights records to get in the way of business, many fear the long-term effects on France’s defense industry could be hugely damaging.
Leading such criticism Thursday was, as expected, the Front National leader Marine Le Pen.
“This submission to the U.S., which had openly demanded this…contract’s suspension, is exposed in broad daylight,” the far right leader said in a statement. “How can one fail to be astonished by (President) Francois Hollande’s ardour in cancelling this contract in the name of moral principles, which evaporate suddenly when it’s time to sign arms deals with countries such as Saudi Arabia and Qatar, two Islamic dictatorships that practise Sharia?”
Meanwhile in the Kremlin, the watchword is – least said, soonest mended. President Vladimir Putin’s spokesman Dmitry Peskov told ITAR-Tass Thursday he didn’t know how much the French had agreed to pay but said the matter was closed and could we please move on.
“Don’t ask me the details,” Peskov was quoted as saying. “In Moscow, this problem is considered completed resolved.”