At the Crossroads of NATO and Russia

By Jay Holmes

Friday, November 14, 2014 might end up being an important date in Western history—not for what happened on this day, but rather for what didn’t happen. The French government failed to deliver the new Mistral class helicopter carrier to the Russian Navy.

 

FS Mistral Amphibious Assault Ship in Toulon Harbor Image by Rama, wikimedia commons.

FS Mistral Amphibious Assault Ship in Toulon Harbor
Image by Rama, wikimedia commons.

 

On December 24, 2010, French President Nicolas Sarkozy announced the sale of two French Mistral class ships to the Russian Navy. The contract was signed on January 25, 2011, with a delivery date for the first helicopter carrier, the Vladivostok, in October of 2014 and the second ship, the Sevastopol, to be delivered in 2015. Two more ships of the same class were then to be constructed under license in Russia. The price of the contract for the first two ships was 1.37 billion euros. This, of course, represented thousands of jobs for the troubled French economy.

In what was likely a well-rehearsed press briefing, Russian reporters asked Russian General Staff member General Nikolai Makarov why the ships would not be built in Russia where Russian workers could benefit from the project. General Makarov stated that the reason for purchasing the French design, rather than Russian, was that “Russia would require another ten years to develop technologies” that could match the Mistral class capabilities and that the Russian Navy did not want to endure that delay. In answering the question, he effectively confirmed the concerns of the US and some of its NATO members.

When the contract was announced in 2010, US Republican senators, led by John McCain, sent a letter of protest to the French Ambassador to the US. NATO member states Lithuania, Latvia, and Estonia also protested against the sale. During his visit to Paris on January 8, 2011, US Secretary of Defense Robert Gates expressed US concern over the substantial military technology upgrade that the French were exporting with the sale of the Mistral class ships to Russia. When questioned by journalists, Gates’ representatives stated that, in spite of US concerns, there was nothing that the US could do to block the sale of the Mistral ships to Russia. France had anticipated the complaints and ignored them. The construction proceeded on schedule.

On February 27, 2014, when the Russian flag was hoisted over the Ukrainian parliament in Crimea, the pending transfer of the Mistral ships to Russia quickly became a much more serious problem to Ukraine, to NATO member states, and to Sweden. With a planned delivery date of October 15 looming on the horizon, the US and NATO quietly stepped up pressure on the French government to halt the sale of the high tech Mistral ships. The French quickly complained that they would have to reimburse Russia the 1.1 billion euros already paid for the ship construction, and that it would cost France over a thousand jobs.

Members of the US Congress responded that NATO should purchase the two ships for use by the NATO Standing Force Atlantic and NATO Standing Force Mediterranean. NATO was slow to respond, but after a few weeks, they decided that they lacked the funds and mechanism for making such a purchase. In reality, if the UK and the US cooperated, an offer to purchase the ships at their original sales price could be made within days. France would have no doubt as to the validity of the offer, but that does not mean that France would easily agree.

In less public communications, the Russian government offered, in general terms and without producing a contract, to make further substantial warship purchases from the French shipyards if France delivers the two Mistral ships. Russia is also in a position to quietly make a variety of generous financial offers to the French government or to members of the French government. I am not aware of what other offers have or have not been made.

 

 

In response to pressure from its fellow NATO members, France delayed the projected delivery date to November 14 with the condition that a cease-fire and a permanent political solution be in place by then.

Only days before the deadline, Vladimir Putin did what he always does best. He hurt Russia. On November 10, 2014, Australia deployed warships to shadow Russian warships that had approached the Coral Sea. On November 13, the Russian ships were in the Coral Sea, where they approached, but did not enter, Australian territorial waters.

This bit of Putinism was in response to the announcement by the Australian government that at the G-20 meeting, they would confront Vladimir Putin about the fact that Russian forces had shot down Malaysian Airlines Flight MH17 on July 17, 2014. Thirty-eight Australians were killed in that attack.

On November 12, another Russian armored column crossed into Ukraine, further escalating the Russian invasion of Ukraine, and making it more politically difficult for France to deliver the ships. The November 14 delivery date has now passed, and France has thus far declined to turn over the ships to Russia.

The Russian government responded with its traditional lack of finesse. It officially announced that it would make financial claims against France if the first Mistral is not delivered by the end of November. Less officially, but quite publicly, they have announced that the financial claims would be in the neighborhood of 3 billion euros, and that France would face “grave consequences.” France responded by stating that it would not be forced into any decisions by anyone outside of France.

In spite of what Vladimir Putin’s media machine will tell the Russian public, Russia is, in fact, in no position to deliver and “grave consequences” to France. The Russian ships in the Coral Sea are not capable of overcoming Australia’s defenses, but the move plays well on Putin-controlled state media. As for Australia, Putin doesn’t give a damn what anyone in that country thinks.

 

Russian President Vladimir Putin contemplating the  "grave consequences" he would like to deliver. Image by www.kremlin.ru.

Russian President Vladimir Putin
contemplating the “grave consequences”
he would like to deliver.
Image by http://www.kremlin.ru.

 

While NATO maintains that it cannot purchase the two Mistral ships from France, some interesting options are available.

In 2010, Poland expressed an interest in possibly purchasing a Mistral class ship from France. For lack of funds, no offer has been tendered. Canada, a nation that has the funds, has also expressed an interest in purchasing two Mistral class ships from France. The UK, a nation that has the funds but won’t give the funds to its navy, has not expressed any interest in purchasing a Mistral class ship. Perhaps it should. With the once mighty Royal Navy currently reduced to having no carriers in service, the purchase of a single Mistral class helicopter carrier could serve to boost the Royal Navy’s defense capabilities until the two new Queen Elizabeth carriers enter service sometime after 2016. The helicopter carrier would remain useful to the Royal Navy long thereafter.

The likelihood of the UK considering the purchase of one of the Mistral carriers is approximately equal to the likelihood that I will win the lottery. I don’t buy lottery tickets. Since the US is expected to pick up the slack from the Royal Navy, and since there is next to no Canadian navy afloat from which to pick up any slack, it is in the direct interest of the US to offer partial financial assistance to Canada or to Poland for the purchase of the two Mistral carriers. The key to getting such a deal done would be to allow the French to announce that any such arrangements were the results of inspired, avant-garde thinking by members of the French government. Neither Canada nor Poland would care who claimed credit for any such deal.

My best guess is that between now and the end of November, Vladimir Putin will not learn to act in the best interests of Russia. Russia will continue its aggression against Ukraine, and, therefore, France will want to avoid suffering the political damage that will result in supplying Russia’s invading military with a new high-tech warship. Time still remains for France and its Western allies to come to their senses and redirect the Mistral ships to an allied navy. Whether or not reason will prevail in the long term remains to be seen.

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11 comments on “At the Crossroads of NATO and Russia

  1. peteybee says:

    The breach of contract would be a blow to France’s reputation as a reliable business partner.

    • Jay Holmes says:

      Hi Peteybee. If France fails to conclude the export of the Mistral Carriers any “blow to France’s reputation as a reliable business partner” would be minimal compared to the damage done by completing the deal. About %60 of French exports go to NATO member countries. Less than %10 of France’s exports go to nations that would respond neutrally or favorably the completion of the Mistral contract with Russia. Most of France’s major international business agreements are conducted with NATO member nations.

      In the short term failure to complete the Mistral carrier deal with Russia will cause a loss of jobs in shipbuilding but only if other nations do not purchase the two carriers in question. In the intermediate and long term France will lose more business and more jobs by exporting the two carriers to Russia.

  2. Mike Lince says:

    I was not aware of this brewing political drama, so I appreciate the insight you have provided. It will be interesting to see how this expensive military technology ends up being deployed, and for whom.

    In the meantime, we will be watching the French and Russians go through their political machinations. Both countries seem to love the spotlight where political drama is concerned. – Mike

  3. robakers says:

    I think I might jump into the bidding. 3 Billion rubbles is something like $17.26. For that price, I might buy them both. Nice reporting on a tangled subject. Stay Warm.

  4. Don Royster says:

    It’s sounding more and more like the US is going to be hit up the money. Like we have the extra cash lying around to pay for these things. While is always up to the United States to save everybody’s tails?

    • Jay Holmes says:

      Hi Don.

      Thus far no formal offer has been tendered by the USA. You are right about our lack of cash. In the long run Canada and Poland have defense interests that align with ours both in terms of NATO and beyond NATO commitments. Having those two carriers operating in the Canadian, Polish or any allied navy reduces our defense burden proportionately.

      If any such buy-out occurs even if the USA paid %65 of the cost of the ships it would still be less expensive than us maintaining the corresponding capabilities in the North Atlantic, or any European waters.

      The USA is beginning to upgrade its aging amphibious assault helicopter carriers at a cost of over three billion dollars each for the first three of the new America class helicopter carriers. The USA will eventually purchase more of the America class or more of a similar newer design. The more expensive price tag for the America class ships as compared to the Mistrals has to do with the fact that they have far more capability, speed and range than the Mistrals.

      If we could purchase one less helicopter carrier over the next twenty years the savings would be greater than the cost of two Mistral carriers. When we consider the yearly operating cost of a single America class carrier the total savings becomes greater.

      The number crunching is in this case a fun exercise but the alternative sales that I have suggested are thus far just a pipe dream.

  5. Smplefy says:

    Royal Caribbean is down a ship as 170 reportedly came down with Norovirus during a month long cruise. Decontamination of the ship to follow. This could fill in nicely in a pinch. Is there a Lido deck on the Princesss Vladivostok?

    • Jay Holmes says:

      Hi Smplefy. Your are ahead of me on creative solutions. I bet that the French would be thrilled to convert part of the flight deck to a lido deck if it gets them out of their current dilemma. The Mistrals have a sick bay with 69 beds but the marine quarters could be converted to hold a couple hundred more patients.

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