The Mistral Class Vladivostok. It might need a new name. Photographer: Jean-Sebastien Evrard/AFP via Getty Images
The Mistral Class Vladivostok. It might need a new name. Photographer: Jean-Sebastien Evrard/AFP via Getty Images

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.

Former Defense Minister Anatoly Serdyukov pushed through the 2011 decision to buy two Mistrals from France. Serdyukov, a former furniture seller who built an impressive government career after marrying the daughter of ex-Prime Minister Viktor Zubkov, mistrusted Russia's powerful military-industrial complex, which he criticized for overcharging. In response, he turned to foreign suppliers, ordering armored cars from Italy's Iveco, drones from Israel Aerospace Industries, even seeking a foreign alternative to Kalashnikov assault rifles. He was backed by Dmitri Medvedev, who served as Russia's figurehead president in 2008-2012.

Then Putin, who had temporarily accepted the prime minister's job under Medvedev, was back at the helm, and the defense industry rallied, while Serdyukov was disgraced by an affair with an underling, who was in charge of the Defense Ministry's property arm. After Serdyukov's dismissal in November 2012, defense industry officials stepped up their criticism of his deals, particularly the high-profile and costly Mistral contract. Deputy Prime Minister Dmitri Rogozin said early last year that the French helicopter carriers couldn't function on Russian fuel and lubricants. Ivan Kharchenko, deputy head of the Russian government's Military-Industrial Commission, called the Mistral purchase "incongruous".

The Russian government delayed a decision on buying two more Mistrals until 2016, but decided to stick with the contract for the first two because, as Kharchenko put it, "costs already borne are such that we'd lose more" if the deal were canceled. Konstantin Makienko, a respected Russian armaments expert with good defense industry connections, hypothesized that Russian officials were motivated by "commissions" on the 1.2 billion euro ($1.6 billion) price tag. He said the French navy gets similar warships for 400 million euros apiece, but that Medvedev rushed the deal through, high price notwithstanding. "The ex-president wanted the West to like him," Makienko said, predicting that the careers of the Mistrals in the Russian navy would be "sad and short-lived."

Serdyukov is gone, and Medvedev, while still prime minister, is now an inconsequential figure. The defense industry lobby headed by Rogozin has gained influence under Putin, and it has cheered him on loudly as Russia annexed Crimea and unleashed a hybrid war in eastern Ukraine. Now, Rogozin, sanctioned by both the U.S. and the European Union for his role in the Ukraine crisis, can gloat over the potential failure of the Mistral deal.

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.

Marine Le Pen, leader of France's extreme right National Front and a Putin supporter, said yesterday that canceling the Mistrals could cost France between 3 billion and 10 billion euros, not to mention "the cost of France's word in commercial matters" and "five million hours of labor." French President Francois Hollande's decision provides great political ammunition for Le Pen, who is already more popular than he is. It plays into Putin's hands more than delivering the ships would have done.

Perversely, however, it will also please Hollande's American allies and get the perpetually dithering French leader off the hook with European allies: Now, he can say he's done his bit for Ukraine -- even if his decision does nothing to help the beleaguered nation's cause.

To contact the writer of this article: Leonid Bershidsky at lbershidsky@bloomberg.net.

To contact the editor responsible for this article: Mark Gilbert at magilbert@bloomberg.net.