France Warns Polish Relations to Be Hurt by Airbus Pact Break

  • Hollande postpones a planned Poland visit in response
  • Airbus $3.5 billion helicopters deal with Poland cancelled

France responded Friday to Poland’s decision to end talks on an Airbus Group SE 13.5 billion zloty ($3.5 billion) Caracal helicopter order by postponing a presidential visit and warning that the countries’ bilateral relations will be strongly hurt.

President Francois Hollande postponed a planned visit to Poland on Oct. 13 while Defense Minister Jean-Yves Le Drian canceled his on Oct. 10. France will review all its military pacts with Poland, which is also a European Union member, and decide on which ones should be maintained, according to French defense ministry advisers. Airbus may seek a breach-of-contract compensation from Poland, the advisers said.

The Polish defense ministry said the two sides failed to agree on a reciprocal investment agreement and that Airbus was responsible for the breaking of the contract, according to a statement on Friday.

“Despite many offers, the French side rejected offset proposals during nine months of negotiations,” the Polish Defense ministry said Friday. “In this situation, Deputy Prime Minister and Development Minister Mateusz Morawiecki decided that further negotiations were unjustified.”

Government Change

The previous Polish government signed a preliminary agreement to order 50 military aircraft from Airbus last year as part of the country’s plans to boost defense spending amid the conflict in neighboring Ukraine. The ruling Law & Justice party, then in the opposition, criticized the deal, saying it didn’t take into account local producers, including Sikorsky Aircraft Corp. and Finmeccanica’s AgustaWestland.

Morawiecki, who is also the finance minister, said to reporters about the Airbus discussions on Oct. 5: “We closed the talks because even though we have been very flexible, we have not been able to secure a satisfying offset deal from the French side.”

He said he didn’t see “any threat” of the French side seeking compensation as the negotiations were “very well documented” and “fair.”

“I had hoped for a positive outcome, but we didn’t manage to negotiate an optimal deal,” he said. “I don’t think there will be negative repercussions. France is a very good partner of ours, our mutual investments are growing, trade is growing. These things happen.”

— With assistance by Helene Fouquet, and Maciej Martewicz

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