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French Dreams of Becoming Reliable Arms Supplier Could Sink With Mistrals

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France is desperately searching for what Reuters called “a face-saving compromise” with Moscow over the stalled deal for the delivery of two Mistral-class helicopter carriers built by the Western European nation for the Russian Navy.

France has three options: deliver the warships, sell them to a third party and destroy them. The latter two amount to nothing less than an embarrassment for France since Moscow fulfilled all its obligations under the $1.3 billion agreement signed in 2011 and should have received both ships by now.

Although French President Francois Hollande was not the one who signed the deal, “it will be difficult for Hollande politically and underlines the difficulty for France to reconcile its ambitions as a global arms supplier — a sector on which thousands of French jobs depend — with commitments to NATO allies,” Reuters noted.

The Sevastopol mistral warship is on its way for its first sea trials, on March 16, 2015 off Saint-Nazaire
The Sevastopol mistral warship is on its way for its first sea trials, on March 16, 2015 off Saint-Nazaire

Needless to say, any option France chooses will be extremely costly. Should Paris make good on its word and deliver the ships, the United States and Poland will be furious. France is engaged in talks with both countries aimed at signing defense deals worth $6.7 billion.

Keep in mind that Washington and Warsaw are ardent supporters of the narrative according to which Moscow is involved in the Ukrainian crisis. This has been cited as the primary reason for suspending the Mistral deal, although Russia has repeatedly denied these groundless accusations while actively supporting peaceful resolution of the deadly conflict through complete implementation of the Minks II agreements.

The Mistral-class helicopter carrier Vladivostok is seen at the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire
The Mistral-class helicopter carrier Vladivostok is seen at the STX Les Chantiers de l’Atlantique shipyard site in Saint-Nazaire

Since France is unwilling to deliver the ships – under pressure or of its own volition – Russia is entitled to a full refund, as well as penalties. In total, Moscow reportedly seeks $1.29 billion compensation, which France does not want to pay.

Russia wants $890 million already transferred to France back, as well as a compensation for the purchase of the equipment and crew training. France is reportedly willing to pay some $870 million, a sum Moscow deems unacceptable.

Russian sailors stand in formation in front of the Mistral-class helicopter carrier Vladivostok at the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire
Russian sailors stand in formation in front of the Mistral-class helicopter carrier Vladivostok at the STX Les Chantiers de l’Atlantique shipyard site in Saint-Nazaire

Selling the ships to a third party is a complicated task, since France needs Moscow’s permission to do so. Russia has repeatedly stated that it will not sign off on this, since Mistrals were custom tailored for the Russian Navy making this an issue of national security.

Some speculate that Canada, Singapore or Egypt might be potential buyers but it was China that made headlines with respect to Mistrals. Purchasing helicopter-carriers for a nation aspiring to become a major naval power makes sense.

However, Washington would be as displeased with France for selling the ships to Beijing, as it would have been if Paris delivered them to Russia. The United States and China has locked horns over the South China Sea, a stretch of water, including numerous islands, disputed by Beijing and a number of local nations.

The rumors that China is interested in Mistrals, let alone will buy the ships, remain unconfirmed.

Meanwhile, France is paying $5.5 million of maintenance costs of the Mistrals docked in the French naval shipyard of Saint-Nazaire.

According to estimates, sinking the Mistrals is the cheapest option but France should keep in mind that its dream of becoming a reliable global arms supplier will sink with the ships.

The Mistral-Class Helicopter Carrier
The Mistral-Class Helicopter Carrier