Financial consequences of the Mistral deal for France: better cancel it!

Canceling the Mistral deal will have no influence over India buying 126 Rafale aircrafts from France for 12 billion euros and would open doors for 29 billion euros tenders in Poland and Australia. On the other hand, France would have to refund 700 to 800 million euros already paid by Russia and pay a penalty of 251 million euros in case of non delivery. Do the maths...

The last financial argument against cancelling the Mistral deal is out! For months now, Russian medias and its French supporter the far right party Front National (who recently received a loan from Russian banks ammounting to 9 million euros) have been spreading fear that India might/would reconsider buying 126 Rafale multirole fighter aircraft as France would appear as an unreliable partner. The main goal of this was of course to try to influence French people and have them on the side of the delivery.

India: +12 billion euros

The last declarations from Indian Defense spokesman Sitanshu Kar are showing that not only is the deal still on but that France and India agreed to move faster towards completing it for 126 Rafale ammounting to 12 billion euros.

So far, we were suspecting that India just did not really care about what was happening with the Mistral deal as no official declaration had been done and only Russian officials were declaring that India might reconsider the Rafale deal. Russian politicians were just making things up.

Cancelling the Mistral deal will have absolutely no impact on India ordering 126 Rafale aircrafts from France.

Poland: +13 billion euros

On the other hand, Poland is now getting the feeling the France will not betray its allies. Polish Defense Minister Tomasz Siemoniak explained on the 29th of September that Poland might prefer to chose the American Raytheon instead of the French MBDA/Thales as missiles shield supplier for an amount of 5.8 billion euros, would France decide to deliver the Mistrals to Russia.

The last move of postponing the Mistral deal is reopenning the doors of the Polish arms market to France. All the tenders where France has been shortlisted amount to around 13 billion euros. Here are the details of each tender:

Market Amount France Competitor
Missile shield system 5.8 billion euros Aster-30 (Eurosam, MBDA/Thales) Patriot (Raytheon, USA)
70 multirole-oriented helicopters 2.5 to 3 billion euros EC725 Caracal (Airbus Helicopters) S-70 (Sikorsky, USA)
3 submarines 1.8 billion euros Scorpène (DCNS) U212A (TKMS, Allemagne)
6 corvettes 1.3 billion euros Gowind (DCNS) Sigma (DAMEN, Hollande)
32 attack helicopters more than 1 billion euros Tigre EC-665 (Airbus Helicopters) Apache AH-64 (Boeing, USA)

Australia: +16 billion euros

In 2015, Australia will unveil a gigantic market in the submarine area. The goal will be to replace its 6 Collins class by 10 to 12 news units. The French DCNS (building the Mistral war ships) would have all its chances in this historical tender of 16 billion euros with its brand new submarines "SMX Ocean"... as long as the Mistrals are not delivered to Russia !

Russia: -1 billion euros...

If France is becoming an unreliable partner it would only be for... Russia, and only on the arms industry business. Except the Mistral deal, Russia has spent only 322 million euros over the last 5 years on French arms. In comparison, Saudi Arabia, Brasil and India signed for more than 13 billion euros over the same period of time.

Let us remind you that no jobs are about to be lost so far if the Mistral deal is cancelled and that the penalty for non delivery of the Mistral war ships is 251 million euros... not 3 to 10 billion euros as you sometimes can read in russian propaganda. The total that Russia can claim in case of cancelation is therefore around 1 billion euros (refund and penalties included).

Besides, not delivering the Mistrals to Russia does not mean losing one billion euros as some countries seem to be interested in buying them (Canada...).

Do the maths, better cancel the Mistral deal!

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