Failure to Deliver Mistral Ships to Russia Puts France’s Reputation at Risk

PARIS, December 17 (Sputnik) – France's failure to deliver the Mistral-class helicopter carriers to Russia risks to jeopardize its reputation in the international arena and may lead to a number of serious economic and social problems for the country, experts told Sputnik News Agency Wednesday.

Russia and France signed a deal worth $1.5 billion for two Mistral-class ships in 2011. The handover of the first carrier, the Vladivostok, was originally scheduled for November 14, 2014 but France overran the deadline, with French President Francois Hollande citing the ongoing crisis in eastern Ukraine as cause for the breakdown in the deal. Russia condemned France's failure to deliver on its contractual obligations, saying Paris would have to pay a large penalty if the deal were canceled.

In early December, the French Prime Minister Manuel Valls said he considered any speculation about the possible cancellation of the Mistral deal "premature."

"In the event that France violates the agreement and fails to deliver [the first] Mistral ship, it will have to return the money Russia has paid, but now with a penalty of more than $1 billion, not to mention the social issues that may occur at the dockyards where the ships are being built," a former economic adviser to the International Monetary Fund Camille Sari said.

The expert stressed that in the event of the contract being cancelled, the greatest damage will be done to France's business reputation, which may lead to the "reconsideration of joint projects and deals with Paris by many countries."

The head of the Euro-Maghreb Research Institute, Najib Wakkach, noted that the French authorities "are well aware that the failure of Mistral ships delivery will have legal consequences, as the reasons for refusing to fulfill the conditions of the agreement are not technical or commercial, but geopolitical."

"France's position in this case seems disadvantageous as the grounds for breach of contract, which are presented at the moment, are not related to the technical side of the issue," he said.

On November 25, the day when Hollande announced the postponement of delivery of the first Mistral-class helicopter-carrier to Russia, Aymeric Chauprade from France's right-wing party Front National told Sputnik News Agency that delivering the Mistral ship to Russia "is a question of the credibility of the French defense sector, and of France as a country."

Russian Deputy Defense Minister Yuriy Borisov told RIA Novosti in late November that Moscow currently has no plans to file any claims against France over Hollande's decision to put the Mistral warship deal on hold and still expects that the delivery will take place. He added, however, that Russia will take the case to court if France ultimately fails to deliver the Mistral ships.