November 9, 2015

France-Russia: Balancing on the Edge of Political and Economic Interests and International Commitments

The ”reception” hosted by V. Putin October 29, 2015, at the residence in Novo-Ogaryovo for the ex-President of France N. Sarkozy, has become another demonstration of the Russian authorities' active attempts by all means to speed up lifting of the anti-Russian sanctions.

As you know, apart from the ex-President of France, within the past fortnight V. Putin and Ministers from his environment had official and private meetings with the following officials: Vice Chancellor and Minister of Economy and Energy of Germany S. Gabriel, who is considered one of the main lobbyists of the idea of cancelling the anti-Russian sanctions in Merkel's Federal government; Chairman of the Russian-German Chamber of Commerce M. Harms; General Director of the Eastern Committee of German Economy R. Lindner; Minister of Ecology, Sustainable Development and Energy of France S. Royal. The Russian-German forum “Petersburg Dialogue” has also resumed its work.

Meetings of Russian officials and pro-government experts with representatives of political and business circles of the key countries of the EU and members of the “Norman Four” on the one hand, show the continuing position of the official Berlin and Paris on the Kremlin's role in the events in the East of Ukraine and in the context of the implementation of the Minsk Agreements, and on the other — have demonstrated the Western establishment's willingness to restore contacts with the Russian Federation and to seek compromises in “resolving” the Ukrainian and Syrian issues.

What is the real French background? Experts of “Borysfen Intel” have tried to analyze and estimate its foreign political, domestic political and economic components.

According to some Western and Ukrainian analysts, France, like Germany, is interested in the soonest “freezing” of the conflict in Ukraine, thus reducing the level of military threat on the borders of Europe and reviving the EU economy as a result of the full restoration of trade with Russia. Among the “special” motives for activation of the official Paris in this regard, our experts point out also that F. Hollande does not like it when he is perceived in Europe as some “appendage” to Merkel, and that France is trying in a certain way to “soften” Moscow's offence for the not delivered “Mistrals”.

In domestic politics F. Hollande has to take into account strengthening of electoral ratings of potential critics of the French authorities and the Kremlin's potential allies from the right and ultra-right opposition, who now have a greater chance to win the next parliamentary elections. F. Hollande must also take into consideration the low level of public confidence in his policy, especially in the economic one, as well as the increased split within the Socialist Party because of his support to the Prime Minister M. Waltz' liberal economic policy.

The main reason for weakening of people's trust in the current government is that, since his inauguration in May 2012, F. Hollande has failed to fully implement the planned economic reforms. Besides, the government's work is complicated by the differences in assessments and approaches to the implementation of the reforms of criminal justice, migration policy and education, as well as amendments to the labor legislation.

Because of this imbalance in the ruling Socialist Party, the population is increasingly getting dissatisfied with the policies of the current government, as well as disappointed with the traditional parties' being unable to exercise effective control of the country in crisis. Against this background, in France, are becoming more and more popular the right (”Union for a Popular Movement”) and ultra-right political forces (”National Front”), which by the results of the municipal elections of March 22-29, 2015 won a majority in the Councils of 66 out of 101 Departments(previously “Union for Popular Movement” had the majority in 40 Departments). At the same time, the ruling party has maintained its leading role in a third of departments — 34, though before the elections the Socialists controlled 61 Departments.

Despite this, F. Hollande intends to run for President in 2017, hoping for the success of the reforms in the next year. As a candidate for a second term, French leader plans to form the image of a “social President” and “anti-terrorist” (Mali, Syria) and “a successful moderator in difficult international conflicts” (Ukraine). The current President of France is conceptually opposing his policy to the approaches of the potential rival from the right-wing forces Sarkozy, who stands for a complete revision of the social and economic model of France, cancelling the 35-hour work week and for a higher retirement age.

In the political-economic aspect F. Hollande is under constant pressure from business circles, oriented to cooperation with Russia, French deputies — “lovers of Russia and the Crimea” and part of the senior and middle management of the Armed Forces of France, among whom there is a considerable stratum of right-wing supporters, prone to restore contacts with the Russian side and the dialogue with Moscow on the Ukrainian issue.

In the same context, indicative were the many -months protests of French farmers, during which the National Syndicate of the meat industry demanded from the government to resume negotiations on the export of lard and by-products of pork to Russia. The French farmers' temporary problems are being actively used by the opposition political parties: they directly link the current crisis in the agricultural sector in France with the EU's policy of sanctions against Russia, thereby seeking to prove its inefficiency. The right-wing politicians believe that Russia's counter-sanctions have a more negative impact on European countries than European sanctions on Russia do. In particular, in their view, French agricultural exporters' losses allegedly account for about 1 billion Euros, and France is supposedly experiencing the greatest economic losses among all European countries, that have broken off relations with Moscow, inclusive with a close to zero growth in GDP.

To neutralize this kind of negative trends, the official Paris has reached an agreement with Egypt to sell to it the two ordered by Russia helicopter carriers of “Mistral” type and has developed a package of measures to support agroindustrial complex with 1,2 billion Euros, including tax benefits and assistance in promotion of French exports to markets of third countries.

At the same time, taking into consideration the level of the presence of French companies and the volume of their investments in the Russian economy, in the future we may expect that the position of the business community will continue to be focused on accelerating the stabilization of relations between France and the Russian Federation. Thus, for November 12-13, has already been planned a visit of the delegation of heads of French companies to Moscow, headed by the General Director of the financial group Societe Generale B. Sanchez Incera. At an informal level, there has been made an agreement on the resumption of the work of the Bilateral Council for Trade and Economic Issues.

Besides, despite the official Paris' strong position in resolving the situation around Ukraine and coordination of the EU's sanctions against Russia, not a single French company has left the Russian market. French companies continue work on infrastructure projects for the construction of high-speed rail and motorways, in aerospace, development of IT-technologies, development of offshore hydrocarbon reserves. The corporation “Total” announces about its intention to invest into Russian oil and gas industry around 15 billion US dollars, showing particular interest in the project “Yamal LNG”. A French company has signed with the holding company “Russian Helicopters” a memorandum on joint development and beginning of production in 2016 of engines for Russian civilian and military helicopters.

In the foreign policy context, Paris' key priorities in the nearest future will be the struggle against the threat of terrorism, in particular, against the activities of the “Islamic State” and “Boko Haram”, an active mediating role in resolving the situation in the East of Ukraine and the conflicts in the Middle East (the Syrian crisis, the Iranian issue ), and in Africa, as well as an international conference on climate change.

Some Western analysts believe that today at the Elysee Palace, the Russian-Ukrainian conflict is considered less threatening to international security in comparison with the crisis in the Middle East. This forms the opinion that the coalition between Russia and the West in solving the Middle East problems will require a certain tolerance from France in regard to Russia's actions in the East of Ukraine. Besides, under the current actual freezing of the EU-Russian relations, the official Paris tends to claim a privileged dialogue with the Kremlin on the basis of “historical ties and a number of joint international interests”. The political and military circles in France negatively perceive Ukraine's desire as soon as possible to get the European Community's guarantees on our country's membership in the EU and NATO, considering these issues premature.

Today, the official Paris considers its goal providing real and sustainable solution to the conflict in the Donbas solely on the basis of the “Minsk Agreements” and in the “Norman format” (without participation of other intermediaries). For F. Hollande this is important not only in terms of fulfilling his promises, demonstrating the effectiveness of the axis “Paris-Berlin”, but also from the point of view of his personal rating before the presidential elections in 2017.

 

So, based on the above-mentioned circumstances, France had to balance on the edge of political (both domestic and international), and economic interests and international commitments. Also today, Paris, in a certain sense, is trying to seize the initiative from Germany and to play a leading role in the settlement of the “Ukrainian issue".

That is why, in the nearest future, the French side can be set for the continuation of the public political and diplomatic support to Ukraine and to maintain economic pressure on Russia in the form of sectoral sanctions.

At the same time, the French leadership pragmatically assesses the prospects for future economic losses because of the restrictions on trade with Russia, in connection with which the French diplomacy may try to make “more flexible” rules for sanctions limitations associated with the “accelerated revision of restrictions in case of positive development of the situation”.