On September 3 of the past year, NATO leaders and staffs were busy undertaking final preparations for its most important summit since the end of the Cold War in the aftermath of Russia’s annexation of Crimea. NATO’s 28 heads of state and government were headed to Cardiff, Wales, to bless carefully negotiated force posture and deterrence measures intended to reassure the Alliance’s nervous eastern and northern members. But a lingering crack in NATO’s façade of unity threatened to upset a return to its historic mission of collective defense and deterrence. The French government had since the outset of the Ukraine conflict stubbornly resisted allied pressure to cancel or at least suspend temporarily a 2011 contract, signed under President Nicolas Sarkozy, to sell two Mistral class amphibious warships to Russia.
The Mistral affair had already become a growing embarrassment to French diplomacy and threatened to undermine the Wales summit’s carefully calibrated message of Euro-Atlantic solidarity. President François Hollande ran out of time for temporizing. Just before his departure for Wales, the Elysée Palace announced that in view of Russia’s ongoing destabilization of eastern Ukraine, it would be premature to schedule the delivery of the first of the two Mistrals, the Vladivostok. NATO leaders and France’s allies breathed a sigh of relief, even though it fell short of a suspension, let alone a cancellation. Hollande merely postponed until November and conditioned the delivery of the first ship on Moscow’s observance of a ceasefire in Ukraine, which could be—and surely would be—framed by the Quai d’Orsay as progress toward a political solution to the Ukraine conflict.
To most American and European observers, Hollande’s reluctance to cancel the Mistral sale was incomprehensible. Russia’s flagrant violation of European security principles confronted France with what seemed to be a no-brainer for a country heavily invested in upholding an international order based on the peaceful resolution of conflicts. But for Hollande, the Mistral matter was and remains an extremely sensitive affaire d’état that sits at the heart of an ongoing debate in Paris about France’s role in the 21st-century world. Should France follow de Gaulle’s dogged defense of French sovereignty and grandeur in a world increasingly shaped by non-Western powers? If so, Paris should deliver the ships. Or should France exert leadership within NATO, stand with its allies, and promote a rules-based international order? If so, then it should cancel the Mistral deal in defense of Euro-Atlantic security principles, despite the possible risks to France’s economy, defense industry, and relations with Moscow.
The Mistral affair defies easy explanation. Like many things French, it has its mysteries. Hollande has found himself stuck in a no-win situation he did not create. He must choose France’s least bad option, weighing short-term against long-term considerations as he does. A man never known for his decisiveness has been blown off his feet by this mistral, and it still remains to be seen if he can find his way though the storm.
The Mistral class amphibious assault vessel is popularly referred to as the “Swiss Army knife” of the French navy. These versatile ships are prized not for their onboard weapons—they are essentially unarmed—but for their ability to project symbolic power, support amphibious operations, assist in humanitarian relief operations, and direct military operations through state-of-the-art command and control technologies. It can support up to 450 troops for 45 days at sea without replenishing and can hold up to 16 medium to large helicopters, 70 armored vehicles, and up to four landing craft. The ship’s flight deck can accommodate six helicopters taking off and landing simultaneously. The Mistral also functions as a hospital ship, equipped with two operating theaters and 69 beds, which makes it particularly useful in humanitarian operations. In addition to its amphibious assault capabilities, the Mistral’s Senit 9 command and control system provides a 3D fusion of data based on information received from on- and off-board sensors, the same combat system on board the flagship aircraft carrier, the Charles de Gaulle. These systems underpin the “network centric” warfare capabilities that have long given the West a qualitative military edge over competitors.
In functional terms, the Mistral is the somewhat smaller equivalent of the U.S. Navy’s LHD Wasp-class amphibious assault ship—like the USS Boxer or USS Kearsarge (and six others). The French navy possesses three Mistrals of roughly 21,000 tons and 200 meters in length, making them the second-largest ship in the fleet behind the Charles de Gaulle.
Moscow first took an interest in acquiring the Mistral after its 2008 war with Georgia. According to one report, Admiral Vladimir Vysotsky, then Russian Chief of the Navy, marveled at the ship just months after the war while visiting the Euronaval defense show in Paris.1 Vysotsky later crowed that if Russia had possessed the Mistral in 2008, it “would have won the war with Georgia in 40 minutes rather than 26 hours.”2
Moscow had never before purchased a major offensive capability from a NATO member state, and not everyone in the Russian military was thrilled with the decision. But advocates in the Russian government saw the Mistral as a means of filling a short- to medium-term capability gap in the Russian navy, while also complementing Moscow’s long-term goal of modernizing Russia’s defense industry through technology transfer. Russia’s alleged pursuit of the Mistral’s advanced command and control technologies, and its insistence that part of the ships be built in Russia, indicate that Moscow’s primary interest was to use French technology and know-how to modernize Russia’s own defense industry. Russia found a willing partner in President Nicolas Sarkozy’s France.
Sarkozy was elected in 2007 on the promise of a “rupture” with France’s political past. He focused primarily on improving France’s economy, but he also sought to reform French foreign policy and strengthen relations with global powers. The fast-moving, hyperactive President brought boundless ambition to his early tenure, which many criticized for its lack of coherence. In perhaps a fitting example of his frenetic style, Sarkozy sought to “reset” relations with NATO and Russia simultaneously. Of course, this was no rupture at all. French governments of all political persuasions have tried to play both great power ends against a French middle for a very long time, and French associations with Russia go back at least to the Treaty of Paris.
For the Sarkozy Administration in the present century, selling the Mistrals to Russia made strategic, domestic political, and industrial sense as well. With the souring of relations between Russia and the West since the Ukraine crisis exploded in early 2014, it is easy to forget the heady optimism of 2009 and 2010, when Presidents Obama and Medvedev promised a “reset” of their own relations and signed a strategically insignificant but symbolically rich strategic arms reduction treaty. At the time, Sarkozy was particularly keen on embracing the opportunity of the Medvedev presidency to forge closer Franco-Russian ties. The common, well-practiced French refrain was that the Cold War was over and thus it was time to turn a new page with Russia. Perhaps conveniently, French officials argued that the best way to shape Russia’s westernization was to broaden the relationship to a strategic level to include arms sales.
Yet Sarkozy sought to balance his outreach to Moscow by strengthening France’s ties with NATO and Washington, relationships that had been strained under his Gaullist predecessor, Jacques Chirac. Chirac was the last of the old guard of French Presidents who had lived through the humiliation of World War II and came of age politically during the nationalist restoration under de Gaulle. For Chirac as for de Gaulle, France’s voice was more influential in the world because of its independence and willingness to stand apart from Washington. Chirac’s vocal opposition to the March 2003 Anglo-American invasion of Iraq was a typical play from the Gaullist handbook.
Sarkozy and his team of younger reformers saw things differently. They had come to terms with the fact that France’s Cold War-era Gaullist grand strategy had collapsed, based as it was on a divided Germany for purposes European and a bipolar world for purposes international. Moreover, France’s independent voice had become drowned out by the rise of other powers like China, India, and even Turkey. The emergence of non-traditional threats also required closer integration with capable allies and partners. Sarkozy believed that France could better influence the course of global affairs by leading the West from within the Alliance. He did not abandon France’s global ambitions, pretensions to leadership, cultivation of emerging powers, or often prickly defense of its sovereignty, but he aimed to make France a more constructive and cooperative Western ally.
In 2009, after months of highly sensitive negotiations with Washington and other NATO allies, Sarkozy reversed de Gaulle’s decision to remove France from NATO’s integrated command. France’s full return to NATO was controversial domestically because it upset long-standing Gaullist orthodoxy, but it was welcomed in Washington and other allied capitals. True to Sarkozy’s traditional ends-against-middle methodology, however, just months later the Sarkozy government authorized negotiations with Russia on the sale of the Mistral. Several senior officers in the French military, particularly in the Navy, opposed sharing France’s advanced weaponry with a country whose future political evolution was uncertain. But in the Mistral proposition Sarkozy’s focus on the economy and foreign policy came together. With the protection of precious industrial jobs in mind, the politicians carried the intergovernmental debate on the Mistral over the objections of senior soldiers and sailors.
On France’s western coast, where the Loire flows into the Atlantic, sits the port city of Saint-Nazaire. The city has a long tradition of fishing and shipbuilding. Some of the most famous ships in commercial passenger history were built there, including the SS France, La Normandie, and the Queen Mary 2. STX, a Korean company that owns a two-thirds stake of the shipyards, operates the yard; the French state owns the other third.
The Saint-Nazaire shipyard has come upon hard times in recent years. The partial privatization of the defense shipbuilding industry in France, fierce global competition, and the cyclical nature of orders have plagued the yards and consigned their roughly 2,100 workers to a precarious existence. Fearful of further job losses and aware of its financial stake in the shipyards, the French government has actively promoted the shipyards abroad to possible cruise ship and military customers. Clearly, Russia’s interest in the Mistrals offered a new lease on life for the shipyards, which manufactured the three Mistrals now in the French Navy. When budgetary realities forced the French government to scrap plans to build a fourth Mistral for the French navy, the Russian bid looked irresistible.
The shipyards’ struggles are but part of the larger story. Despite world-class technology in defense, nuclear energy, pharmaceuticals, and other sectors, France is battling deindustrialization and flagging competitiveness. During Sarkozy’s tenure (2007–12) France lost 355,000 factory jobs, and its trade deficit soared to a record €70 billion. The rising cost of French labor compared to its competitors and a poor record of industrial innovation have left France trailing its German neighbors and other competitors on the export market. The Mistral prospect was therefore no ill wind, but one promising badly needed rain.
But Russia proved to be a tough negotiating partner. It did not simply want to buy the hulk of the ships, which was what France hoped to sell. Moscow insisted that it would only buy the ships if the Senit 9 system was included. Moscow also demanded an offset in the contract to produce part of the hull of the second ship in Russia. Paris and Moscow squabbled over the price of the ships, too, dragging out negotiations. It remains unclear whether Paris has actually agreed to deliver the ships with the sophisticated technologies, but it is unlikely that Moscow would otherwise have agreed to purchase them.
Presidents Sarkozy and Medvedev eventually reached agreement on Christmas Eve 2010. The prime contract between France’s naval shipbuilder, DCNS, and Russia’s arms export branch Rosoborenexport, signed in 2011, committed Russia to the purchase of two Mistrals for €1.2 billion with an option to buy two more made in Russia. The first ship would be made entirely by STX in Saint-Nazaire, with parts of the second produced near St. Petersburg. As part of the sale, France agreed to train Russian sailors in France to operate the ships.
For Sarkozy and his administration, the sale was a triumph for French industry. The Mistral contract secured six million work hours and 1,200 French jobs at the Saint-Nazaire shipyards for a four-year period. The contract also demonstrated the ongoing success of the French defense industry in a fiercely competitive and fast-growing global export market. And it gave France a privileged position in Europe in forming a new strategic partnership with Russia. In a March 2010 state visit to Paris, President Medvedev declared, “The Mistral is a symbol of confidence between our two countries.” Had the same words come out of Sarkozy’s mouth no one would have batted an eye.
The Elysée’s cheer found little echo among France’s neighbors, particularly in eastern Europe and the Baltic states. The Lithuanian government was the most vocal critic of the sale. The other two Baltic states and Poland privately attempted to dissuade France from moving forward with it. To them it looked like Paris had put its economic interests before Alliance solidarity, and those who knew their history needed little reminder that Franco-Russian affairs had often put those between them in a tight spot.
Washington, too, had its concerns. The Obama Administration worried that the Mistral deal might create interference patterns amid the “reset” with Russia and the new, positive Franco-American momentum. Then-Secretary of Defense Robert Gates, on a 2010 visit to Paris, noted in response to a press query that he and his French counterpart, Hervé Morin, had had a “good and thorough exchange of views” on the Mistral sale—diplo-speak for not seeing eye to eye. Exactly what Gates said and heard back, how the Administration had prepared the encounter in the interagency and what took place once Gates reported back to the NSC, is not public knowledge, but the Wikileaks episode provided some color: Gates was characteristically blunt in opposition, and Morin was, too. Congress, led by Senator John McCain and Representative Ileana Ros-Lehtinen, was less diplomatic, but its points did not differ from those Gates had offered privately. France dismissed foreign criticism of the sale, retreating to its talking points about treating Russia like a partner.
The French could be excused for taking the criticism lightly. After all, rather little concern had emerged when the sale was under negotiation in 2010 and 2011. There are several reasons why. First, arms sales are ultimately a decision based on national sovereignty; NATO has no mandate to regulate the arms exports of its member states, and the United States can only block a sale from an ally to a third party when American technology is involved. Second, while the Baltic states were concerned about the sale—particularly because Paris did not consult them about the deal—most Western analysts did not see the sale of the ships as a major threat to the Alliance given the sorry state of the Russian navy at the time. Third, most Western political leaders genuinely believed that the elections of Obama and Medvedev offered an historic opportunity to build a new post-Cold War partnership between the West and Russia. Finally, other major European countries such as Italy and Germany declined to criticize the Mistral sale because they, too, were busy fostering their own close economic and defense linkages with Moscow.
Alas, all the happy talk about a new NATO-Russia partnership ended upon Vladimir Putin’s 2012 return to the Kremlin. Yet construction of the Mistral continued in Saint-Nazaire under President Hollande. Despite his more lukewarm attitude toward NATO, Hollande reaffirmed Sarkozy’s decision to return France to NATO’s integrated command, making it a point of consensus in French mainstream politics.
Putin’s decision forcibly to annex Crimea and to foment a proxy war in eastern Ukraine fundamentally changed Russia’s relationship with the West, as well as the debate over the Mistrals. Illusions of a NATO partnership with Russia, dating from the end of the Cold War, lay shattered and scattered on the floor. In April 2014 Alexander Vershbow, Deputy Secretary-General of NATO and a former U.S. Ambassador to Moscow, told reporters, “Clearly the Russians have declared NATO as an adversary, so we have to begin to view Russia . . . as more of an adversary than a partner.”
In response to growing concern from allies in central and eastern Europe, NATO hurriedly adjusted its agenda for the Wales summit to include new force posture and presence options to reassure its easternmost allies. Despite its wavering over the Mistral, the French military has been an active participant in NATO reassurance measures, including sending Rafale fighter jets to Poland and policing the airspace over the Baltic states. Yet as tensions mounted between Russia and the West, the spotlight inevitably turned to France and the growing disconnect between its robust support for its eastern allies and the impending delivery of the first Mistral to Russia. Diplomatic protests now burst from behind closed doors into public spaces. And they came not just from the Baltic states, but also from Germany and the United Kingdom, two other countries with privileged and sometimes unsavory economic ties to Russia. President Obama raised the issue at a press conference in June 2014, just before his visit to France for commemorations of D-Day, urging France to “hit the pause button” on the sale.
It was only on the eve of the NATO summit, however, that Hollande postponed and conditioned the eventual delivery of the ships on Moscow’s behavior in and toward Ukraine. The announcement was clearly a play for time, in hopes that moderation of Russian conduct in Ukraine would allow France to deliver the ships in better circumstances. This begs the question, however: Why is France so reluctant to cancel the Mistral contract? How is Paris weighing its interests and options?
Hollande’s motivation for delivering the Mistrals this autumn is not the same as Sarkozy’s rationale for selling the ships in the first place. Paris is still concerned with protecting workers at Saint-Nazaire, but it no longer has any illusions about building a strategic partnership with Putin’s Russia. The French government fears that canceling the Mistral will expose it to expensive breach of contract penalties, undermine the reputation of France’s sacrosanct defense industry, disproportionately punish France within Europe, and expose an already weak government to storms of criticism from France’s unions and opportunistic political extremes.
France’s primary argument for delivering the Mistral is that the nation’s credibility must be upheld. If France cancels the contract, the state will likely have to pay back the €1.2 billion cost of the ships, plus unspecified cancelation penalties Russia has threatened to pursue. The French government now argues that a cancelation would benefit Russia by filling Moscow’s coffers with more than the cost of the contract to begin with, and at the expense of France’s already troubled public finances.
Yet contract sanctity talk is of secondary importance. French officials are chiefly concerned about protecting France’s reputation as a reliable arms exporter. The French defense industry generates €15 billion in annual revenues and 165,000 direct and indirect high-paying jobs in France. France also exports 25–40 percent of the industry’s output, doing wonders for the French balance of payments account. The French government claims that without defense exports, its trade deficit would have been 5–8 percent higher over the 2008–13 period. A stagnant French defense market, a defense depression in Europe, and France’s overall economic challenges have made arms exports to non-NATO markets more important than ever.
Thanks to the active support of the Elysée Palace and Defense Minister Jean-Yves Le Drian, France’s arms export efforts have thrived of late. France is the fourth-largest holder of defense export market share behind the United States, Russia, and the United Kingdom. Defense exports were up 43 percent in 2013, to €6.87 billion.3 The Middle East has proven to be a particularly lucrative market, with Saudi Arabia emerging as France’s largest customer—most recently financing a $3 billion purchase for the Lebanese army.
Clearly, defense is big business for France, which includes world-class firms like Thales, Safran, MBDA, Airbus Group, and Dassault. But the defense industry also underpins France’s traditional Gaullist foreign and defense policy of strategic autonomy and self-reliance. While Sarkozy may have edited de Gaulle’s legacy by returning France to NATO’s integrated command, even he dared not compromise France’s sacred industrial base or nuclear arsenal, the untouchable third rails of France’s national security politics.
After all, France can hardly be an autonomous global power if it is forced to import strategic weapons. Unfortunately for France, autonomy is expensive in the 21st century; to arm itself it must maintain an export market, for the capitalization costs of major platforms cannot be recouped from the domestic market alone. Therein lies the cruel irony of modern French defense policy and the crux of the Mistral conundrum: In order to maintain the defense base that underpins France’s strategic autonomy, France has made itself dependent on defense exports to fickle, non-allied countries like Russia, India, and Saudi Arabia.
France is particularly dependent on being able to export its flagship fighter aircraft, the Rafale. When the French government makes excuses for why it must respect its contractual engagements over the Mistral, it is really thinking about the fate of the Rafale on the export market, where the plane has thus far failed to find any buyers. France fears that canceling the Mistral might cast doubt in Delhi and Doha, France’s top two targets for the Rafale, about the reliability of Paris as a supplier. Indeed, Paris is desperate to export the Rafales both to keep the planes’ production lines running and to build up economies of scale that reduce the unit price the French government pays to arm the French air force. France’s most recent loi de programmation militaire (five-year military budget) assumes and relies on the sale of the Rafales on the export market for the government to afford France’s €31.4 billion annual defense budget.
Would canceling the Mistral really hurt the Rafale or other French arms on the export market? History suggests otherwise. France has canceled defense contracts before for political reasons—to Israel in 1967 and to apartheid South Africa in the 1970s—and yet Paris managed to maintain its credibility as an arms exporter. Moreover, France’s major competitors in the high-tech defense market are mostly Western firms from the United States, Britain, Germany, and Sweden (with Russia the notable exception), which potential export customers view as even more likely than Paris to cancel contracts for political reasons.
A third rationale Paris uses for delivering the Mistral is that it should not bear a disproportionate share of the Western sanctions against Russia. France has particularly seethed at London’s criticism of the Mistral sale, given that many Russian oligarchs park their ill-gotten gains in the City. Yet France is not alone in sharing in the pain of European sanctions. Germany has canceled a significant defense training contract with Russia, and its exports to Russia were down 16 percent in the first eight months of 2014. Central and eastern Europe are exposed to possible Russian gas cutoffs this winter. France is right to claim that London and Berlin have had their own dirty dealings with Russia, but it simply not true that canceling the Mistral sale would uniquely punish France for the effects of European sanctions on Russia.
Domestic politics are also a key driver—if a typically unacknowledged one—of French thinking about the Mistral. President Hollande’s 13 percent approval ratings are the lowest for any French President in the history of the Fifth Republic. He is loath to take any action that further alienates France’s disruptive unions or upsets his own Socialist Party, which is on the verge of revolting against his recent supply-side economic reforms. The far-right National Front, whose growing ranks of supporters include a significant number of former communists turned xenophobes, admires Putin’s muscular nationalism and has lambasted Hollande’s Mistral hesitations as a capitulation to the American hegemon. Of course, it is not just the far-right in France that views American and British lecturing over the Mistral as both hypocritical and an insult to France’s considerable pride.
Fortunately for Hollande, France’s centrist political parties are all invested in the Mistral, so his mainstream opponents have not used it against him. After all, Sarkozy, of the opposition, center-right UMP party, signed the contract with Russia in the first place. Former Defense Minister Morin (head of the centrist party) championed the contract as well. So, bad as things are politically, they could be worse, and if Hollande cancelled the contract they would get worse in a hurry.
Unfortunately, French officials have been less than forthright about the risks of delivering the ships to Russia in the present geopolitical circumstances. No doubt they debate them internally, the unstated consensus probably being to keep all options on the table and stall for time until conditions might permit a delivery. But a closer analysis shows that ignoring the views of allies and delivering the ships may not be in France’s interest after all, no matter how much time passes.
First, there is the real threat that Moscow could use the Mistral in further cases of Russian aggression in its “near abroad”, including possibly against a NATO member state. That nightmare scenario, openly ridiculed a few years ago, is no longer so farfetched. A related issue is that the technology transfer believed to be included in the Mistral sale could significantly bolster Russia’s defense industrial base at a time when the Alliance is seeking to muffle the momentum of growing Russian military power.
A much more probable risk is that delivery of the Mistral could badly damage France’s relationships with its NATO and EU allies. The U.S. Congress is watching France’s handling of the Mistral carefully. Going forward with the delivery would seriously damage France’s reputation in Washington, which has recovered marvelously from the Iraq imbroglio of 2003. Washington greatly appreciates Sarkozy’s return to NATO’s integrated command and his hard-nosed approach on global security issues, which Hollande has continued on matters such as Syria, Iran’s nuclear program, terrorism in Africa, and ISIS. Yet France could face a real backlash in Washington if it delivers the Mistral. Paris has been especially active in recent years in Africa, leading interventions in Libya, Mali, and the Central African Republic. France has relied closely on American intelligence and enabling support to carry out these operations, and relies on intelligence cooperation with Washington to combat the rising risk of jihadi blowback from the festering civil war in Syria. Is Paris willing to risk upsetting close U.S. cooperation in Africa and counterterrorism at home to deliver the Mistral to Vladimir Putin?
Delivery could also undermine France’s hopes of winning defense business in Europe. Ironically enough, the Polish Minister of Defense cautioned that, if France delivers the Mistrals to Russia, Poland may cut France’s Thales out of a major €5.8 billion missile defense contract in which is it one of two finalists. That alone should have France wondering if delivering the Mistral is really the least risky option to its defense industrial base.
Delivering the ships would also undermine France’s European diplomatic agenda by widening the divisions between those in Europe who want NATO and the EU to focus its resources south (like France) and those who sense more keenly the threat to the east. France has been frustrated by the reluctance of central and northern Europe to support its ambitions for the European Union in Africa or the Levant. Ignoring these same allies by delivering the Mistral to Russia will not help Paris win their support. Perhaps most importantly, the government risks undermining its own robust words and deeds at NATO concerning Russia’s behavior in Ukraine. Would Paris undermine its own participation in NATO’s reassurance efforts, just as the Alliance begins to operationalize them?
Paris’s reasoning and decision-making on the Mistral may not make sense in foreign capitals. The Mistral affair is so complex precisely because it pits two competing priorities of France’s evolving foreign policy against each other: preserving France’s strategic autonomy versus upholding a rules-based international order. Sarkozy put France on the path toward closer integration and solidarity with its Western allies, but he did not dismantle the Gaullist foundation that underpins French foreign and defense policy. The Mistral decision forces France to choose between these two obligations, and it is straining under the pressure.
In late November, the Elysée Palace announced the indefinite suspension of the delivery of the Vladivostok until further notice, although construction of the Sevastopol continues at Saint Nazaire. Russian officials have said that Moscow will wait patiently for the Vladivostok, but also have hinted that they would pursue penalties for breach of contract if the ship is not delivered in due course.
French government lawyers are doubtless working long hours in search of a loophole that would allow the government to avoid penalties for breach of contract. As of now, however, Paris has no workable alternative to delivering the Mistrals. France’s best hope is that Russia will ease up enough in Ukraine to allow for the delivery of the ships in slightly less embarrassing circumstances. After all, the Mistrals—and raison d’état—are proudly made in France.
1Vincent Jauvert, “Mistral: Comment Sarkozy et Fillon ont cédé aux exigencies Russes”, L’Obs, September 4, 2014.
2Quoted in “Mistral Blows”, Economist, May 17, 2014.
3Agence France-Presse, “Les ventes d’armes en France se portent bien”, September 9, 2014.