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Money trumps foreign policy as France backtracks on sale of warships to Russia

French President Francois Hollands at the NATO Summit
French President Francois Hollands at the NATO Summit
Photo by Handout/Getty Images

Many people know the biblical scripture that states, the root of many evils is the love of money. This adage or moral works just the same in the secular world as money quite often commands a nation's foreign policy as seen on Sept. 4 when French President Francois Hollande quickly backtracked on yesterday's announcement that the Eurozone country was suspending an agreed upon sale of two warships to Russia, and is instead following through with the trade agreement as long as a set of spurious, and to date, unknown parameters are followed.

In essence, France is trying to appease both the U.S. and Russia at the same time, while desperately trying to protect their own failing economy that has some of the highest unemployment in the Eurozone, and one of the worst growth rates since the Great Recession. Thus the love, or in this case the need for money, is running the foreign policy concerns for France at a time when the battle lines are being drawn between East and West for economic supremacy.

France's President Francois Hollande says contract for mistral sale to Russia are not broken or suspended, and that a decision on the mistral sale will depend upon what transpires in the coming weeks.

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.

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. - Zerohedge

Ironically, in every possible scenario regarding this transaction the only real victor is Russia. Not only would they benefit from cash penalties paid to them if France chose to break the contractual agreement, but France would lose out on over $1.6 billion in necessary corporate income that would result from the original sale. This of course would lead France's economy into even greater straits, as Russia would assuredly remove them from future considerations for arms and other imports, and possibly make permanent the economic sanctions they have already placed upon the Eurozone in response for supporting U.S. sanctions imposed upon them earlier this year.

France, along with the rest of the Eurozone, is caught in the crosshairs of a great game between two superpowers that threatens to tear the fragile European coalition apart. And while France on Sept. 3 was quick to stand with the U.S. and President Barack Obama when they were face to face in Wales attending the NATO Summit, the reality of following through with one's rhetoric can quickly backfire as the consequences that would come from President Putin and Russia are much closer to home than what may be sanctioned upon them by a nation separated from them by an ocean, and a different political and economic agenda than their own.

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