Various US Senators applauded French President Hollande's decision to suspend the Mistral warship delivery to Russia yesterday. However, they may be disappointed today as, having clearly been reminded of the huge potential penalties that his nation would face (let alone lost revenue/rebates) if it were to cancel the delivery of 2 Mistral warships to Russia, Hollande "explained" today that the contract for the Mistral sale to Russia "is not broken or suspended" but will instead depend on events in the coming weeks. Ironically, the Russians may actually be pleased if the deal is canceled as they avoid overpaying for the ships and benefit from France's weakening.
The US was very excited... U.S. Senators Chris Murphy (D-Conn.), Ron Johnson (R-Wisc.), Dick Durbin (D-Ill.), Jeanne Shaheen (D-N.H.), Amy Klobuchar (D-Minn.), and Edward Markey (D-Mass.) released the following statement regarding French President Francois Hollande’s decision to suspend warship delivery to Russia:
We commend President Hollande’s decision to suspend delivery of a Mistral-class warship to Russia. This announcement sends another clear message to Russia that its continued violation of Ukraine’s sovereignty will lead to severe consequences from the international community. As noted in our letter to President Hollande this summer, the delivery of two Mistral-class warships to the Russian Navy would enhance Russia’s ability to further intimidate neighboring countries and illegally seize sovereign territory. We will continue to urge President Hollande to end cooperation on future construction and sales of these warships to the Russian military. Together we must send an unwavering message to the Russian Federation that its illegal acts of aggression will not be tolerated.
But may be a little disappointed now...
- FRANCE'S HOLLANDE SAYS CONTRACT FOR MISTRAL SALE TO RUSSIA 'NOT BROKEN OR SUSPENDED'
- HOLLANDE SAYS DECISION ON MISTRAL DEPENDS ON 'COMING WEEKS'
Having perhaps realized the costs (and losses) involved... [4]
The French government is studying ways to limit the potential losses from cancellation of a 1.2 billion-euro ($1.6 billion) contract to deliver warships to Russia, two people with knowledge of the matter said.
The authorities in France are looking into how to avoid incurring penalties on top of the cost of refunding the two-ship contract should it be terminated, said the people, who asked not to be named due to the political and financial sensitivity of the matter.
As Bloomberg's Leonid Bershidsky explains,
France’s decision to freeze delivery of a Mistral helicopter-carrier warship to Russia is yet another example of how clueless Western leaders are about Moscow politics. The nationalist hawks who are the strongest supporters of President Vladimir Putin’s aggression in Ukraine are all the happier for the suspension.
...
The contract has penalty clauses that France will struggle to avoid, possibly turning Russia's loss on the supposedly unfavorable price into a gain. At the same time, the defense industry will be able to portray Russia's foreign partners as unreliable and argue for increased funding to retool domestic factories.
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Moar costs...
