Valdai Club

France cannot be considered to be a trustworthy partner by a number of countries, particularly by the BRICS countries, which are interested in French equipment and which have considerable financial means. France was their logical partner. This is no longer true, with the annulment of the sale of two ships to Russia.

The annulment of the two Mistral -class warships contract is now a fact. A communiqué from the Russian government, confirmed by a declaration of M. Le Drian, the French Minister of Defence, is announcing that the two countries have arrived at an agreement: France will reimburse Russia the sums paid, amounting to about 1.16 billion euros. This agreement is rather advantageous for France. Russia could have demanded penalties for breach of contract. Yet, the Russian government decided against suing the French government and in favour of accepting a friendly agreement. This is, unquestionably, a gesture of good will on the part of Vladimir Putin. France is getting away cheaply. But the costs for France of this sorry affair are to be far greater in reality .

The costs for France

The financial costs are not to be limited to the sum that France will have to pay back to Russia. The two ships, the Vladivostok and the Sebastopol , were built according to Russian technical and military norms, as far as communications equipment as well as electrical and technical equipment were concerned. Which renders these ships unusable by any Western navy. In fact, if France wants to resell them to another country, the only two countries able to reuse them as built are China and India. In order to resell them to other countries, part of the equipment and of the means of communication will have to be remade, which should carry with it an additional expense of 400 to 500 million euros. By the way, it is probable that no buyer will accept to pay for such a cost override, which would remain at the charge of France. Even should France find a buyer for these two ships, the losses for the shipyards and for the State would reach between 400 and 500 million euros.

There is also an industrial cost. The annulment of the sale jeopardizes a whole series of other contracts upon which French industry had set its hopes. It’s a huge blow to French shipyards. Important transfers of technology were agreed to by the French industrialists, be it in the area of diesel motors, of the very conception of the ships, or – more simply – in the industrial reorganisation of Russian shipyards. Indeed, one is forgetting that the latter will be building two units, which will be the twins of those the sale of which has been annulled. These two units will be built at the shipyards of Saint-Petersburg and the latter might be able to construct, from 2020 on, a further development of the « Mistral » class which will be both larger and faster. Between the transfer of know-how, the development of a competitive production capacity which could affect future contracts, the costs of Russian yards being lower than those of French yards, and the loss of jobs, the industrial costs of this annulment will certainly be high.

The symbolic cost: a loss in credibility

But the costs will not be limited to financial and industrial ones. There is a high symbolic cost to pay, too. France cannot be considered to be a trustworthy partner by a number of countries, particularly by the BRICS countries, which are interested in French equipment and which have considerable financial means. These countries, for political reasons, do not wish (or are not able to) buy military equipment from the United States, Great Britain, or even Germany. France was their logical partner. This is no longer true, with the annulment of the sale of these two ships to Russia.

In fact, we seem to have an example of this with the sale of Rafale to India. The French government expressed its satisfaction over the sale of 36 airplanes to India. Yet discussions concerned in reality the sale of 126 airplanes and the supply of spare parts for a period over at least 20 years. In fact, it appears that India has considered that it was taking a strategic risk in allying itself with the French industry over a long duration. This sale of 36 airplanes appears in truth like some consolation prize , rather than the fabulous contract, which had been touted. In reality, the Rafale total sales are – up to now – far inferior to even these 126 airplanes which one was hoping to sell to India. The loss in credibility for the French industry resulting from the annulment of the sale of these two ships to Russia, though it cannot be evaluated immediately, could well be amounting to much more than the 1.16 billion, which have been reimbursed to Russia.

Was the annulment of sale pointless?

Which brings up more generally the problem of the why of the annulment of the sale of the Vladivostok and the Sebastopol . Beyond, this is questioning the degradation of economic relations between Russia and France. The pretext has been the events in Ukraine. But France has been, together with Russia, a co-signatory of the Minsk agreements, which were to make possible, not only a cease-fire, but also a political agreement between Kiev and the Donbass insurgents. Now it appears that the Kiev government has refused to apply the political leaf of this agreement. And it has been ascertained that the very high fragility of the cease-fire is largely due to the forces of the Kiev government carrying out regular bombings of civilian targets in the Donbass. Western governments have voiced their misgivings. The United States government, which is not a party to the Kiev agreements, has recognized that units deployed by the Kiev government, such as the Azov battalion, are composed of neo-Nazis. Isn’t it time to draw the lessons of all this and to cancel the economic and financial sanctions which have been implemented against Russia?

Even on Crimea, the whole Western narrative is crumbling . Whatever Western government could say, it is a fact that the vast majority of population of Crimea is supporting the return of Crimea to Russia. May be the 2014 Referendum was not corresponding exactly to norm of jurisdictional legality. But it had a tremendous legitimacy.

Sooner or later Western governments will be forced to acknowledge that. Hence, the whole logics on to which sanctions were thought and implemented are now collapsing.