The tensions between Russia and the civilized world – especially Europe – are making for some tough economic decisions. Trade and finance give the U.S. and the E.U. leverage. But sanctions are not a one way street. Things do, however, seem fairly clear cut when it comes to arming Russia with top-shelf weaponry. If the West isn’t willing to cut Russia off when it comes the sale of arms, then it cannot claim to be serious about applying leverage. Which puts France in a bind.
The French made a deal with the Russians to build two warships – carriers configured to operate helicopters and conduct amphibious assault. These are state-of-the-art warships designed with offensive war and power projection in mind. Not the sort of thing anyone would want to see in the hands of a rogue nation with a record of aggressive behavior.
So … what to do?
For now, it appears that the French will deliver the first of the ships since it is bought and paid for. It may be willing to deny the Russians delivery of the second … if it can find another buyer. As Gregory Viscusi and Helene Fouquet of Bloomberg report:
French President Francois Hollande said he’s prepared to cancel the sale of a second Mistral helicopter carrier ship to Russia if the European Union decides to expand its sanctions against Russia.
The second ship, due in 2016, hasn’t yet been paid for, making it possible to withhold the sale if the EU agrees to broaden its measures on Russia, Hollande said yesterday at the annual presidential press dinner.
At the same time, sanctions can’t be retroactive and wouldn’t cover delivery of the Vladivostok, the first Mistral warship, which is already paid for and due for delivery in October, Hollande said.
“Can the rest of the contract be honored?” Hollande told reporters in Paris about the second warship part of a contract with Russia. “That will depend on Russia’s attitude.”
… the United States should relieve the economic burden on France by purchasing the warships for the U.S. Navy. American Marines have successfully operated off the ships in the past during joint exercises and they could be finished and fitted using American electronics and weapons systems, thereby providing work to American shipyards. It is well-known that the “gator navy” is short by two to four such ships, even with the new America class warships joining the fleet, so the Mistrals would provide an immediate solution. Even better, the purchase would not cost U.S. taxpayers a cent. France’s bank BNP Paribas SA just agreed to pay an $8.97 billion fine to the United States for violating sanctions against Iran. Less than twenty percent of that fine could be diverted back to France to pay for the ships. Another fraction of the fine could be used to pay for the bringing the ships up to U.S. Navy specifications, still leaving the DOJ and Treasury a healthy return on their investigation of BNP.