After Scuttling Iran Deal, France Could Clinch Arms Deals

French defense companies could secure some hefty arms contracts with Saudi Arabia and the Arab monarchies of the Persian Gulf after Paris scuttled a U.S.-led Western effort to secure a rapprochement with Iran, which the gulf states see as a major threat to their security and dynastic stability.

Analysts don't believe this was the principal reason Paris blocked an interim agreement between the West -- including France -- that would have offered Iran relief from crippling international sanctions in return for freezing its contentious nuclear project.

Besides, the prospect of an agreement with Tehran has not been totally trashed. The United States seems determined to move forward and France and the United States are in general agreement on Iran, so a major rift between them is not foreseen.

It's more likely, the analysts say, that the administration of President Francois Hollande, under pressure at home over the limping economy and other domestic crises, wants to demonstrate France's international clout and burnish its aspirations to play a greater role in world affairs.

But France also has a big stake in the Sunni Arab states, particularly in the gulf, which are bitterly opposed to Shiite Iran and its perceived expansionist aims, embodied in its determination to become a nuclear power.

And much of that stake in the Gulf Cooperation Council states -- Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain -- is centered on the arms business.

"France could gain financially from the GCC's frustrations over recent U.S. policy in the Middle East," the U.S. global security consultancy Stratfor observed.

"Significant defense contracts worth tens of billions of dollars are up for grabs in the gulf region, ranging from aircraft to warships to missile systems.

"France is predominantly competing with Britain and the United States for the contracts and is seeking to position itself as a key ally of Saudi Arabia, Qatar and the United Arab Emirates as it looks to strengthen its defense and industrial ties with the region," Stratfor noted.

"By highlighting to the gulf states that it shares their concerns on Syria and Iran, France can lend some political support to its arms tenders, but Paris realizes that although this may bolster their goals it would hardly be the decisive criteria in the arms selections.

"U.S. defense ties with the gulf countries are strong, and though countries such as Saudi Arabia, the United Arab Emirates and Qatar may be inclined to sign further arms deals with France, Paris will hardly be able to dominate the large gulf arms market," Stratfor said.

"Still, with so much money at stake, even a slight political advantage helps."

Saudi Arabia and the Emirates are the region's foremost buyers of French defense systems.
The French financial newspaper Le Tribune reported Aug. 29 that Paris had signed a $1.5 billion contract with Saudi Arabia for upgrading four al-Medinah-class frigates, based on France's F-2000 design, and two Borada-class auxiliary refueling ships.

These are all French-built vessels acquired by Riyadh under the Sawari naval program during the 1980s.

The upgrade contract, including new combat management systems, anti-ship and air-defense missiles and new sensor suites, will involve the French defense companies Thales, shipbuilders DCNS and missile manufacturer MDBA.

IHS Jane's Defense Weekly reported Oct. 8 that Riyadh was close to finalizing a $3.34 billion with Thales to upgrade the Royal Saudi Land Force's Shahine short-range air-defense missile systems.

It said the deal, which will upgrade the systems to Shahine 3 standard, has yet to be approved by the defense minister, Prince Salman bin Abdulaziz.

The Shahine system's an improved version of the Crotale 2000 mounted on an AMX-30 tank chassis. The Saudis bought 92 Shahine launchers in the 1970s.

Although the Saudis currently depend heavily on U.S. weapons systems, they've indicated amid the falling-out with Washington that they're prepared to look elsewhere to acquire weapons and to "buy" influence by awarding defense contracts.

French Defense Minister Jean-Yves Le Drian visited Saudi Arabia in October for discussions on a $2.72 billion deal to modernize Saudi air defenses.

France is also seeking to secure an $8 billion Emirates contract for up to 60 combat jets, offering Dassault Aviation's multi-role Rafale. Qatar's looking for 72 fighters for a six-fold expansion of its combat jet force.

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