Military contract bungles by President François Hollande's government have cost France nearly $60 billion, according to a damning report Tuesday from Boulevard Voltaire, a left-leaning newspaper based in Paris. In addition to the $2.2 billion that the failed Mistral deal with Russia is set to cost, another two fumbled contracts with India and Egypt for hundreds of Dassault Rafale fighter jets will see Paris lose an additional $57 billion.
France's original $1.2 billion deal to build two Mistral warships for Russia was shelved in June after Paris refused to hand over the vessels because of Russia's support for separatist rebels in Ukraine. It's now set to cost France around $2.2 billion in compensation for breach of contract. But that failed deal is just the tip of the iceberg.
India had initially wanted to purchase 126 new Rafale fighter jets from France, but the order was reduced to less than 40 after Defense Minister Manohar Parrika complained that the outlay for the jets, parts and decades of training and refurbishment was too expensive. It now seems that the entire deal could fail as officials from France and India squabble over the final unit price for the remaining jets, according to a Reuters report.
India will instead spend $25 billion on 127 Russian T-50 fifth-generation stealth fighter jets, a far cheaper and more advanced aircraft. Russia will begin delivering the aircraft within the next 36 months.
"The biggest piece of the Indian contract has disappeared for good, since India does not want the 126 planes," notes the Boulevard Voltaire report.
Meanwhile, France's $5.2 billion deal with Egypt for 24 Rafale fighter jets is still going ahead, but issues with cash flow and credit in Cairo have meant that French banks are backing the deal, adding to already heavy public debts. The French economy is currently experiencing slow economic growth and is carrying debts of 98.43 percent of GDP, or $2.2 trillion.
"Though the quality of Egypt's credit is certainly not Greek, it is clearly not excellent either," mentions the Boulevard Voltaire report.