France angry with Poland after it scraps Airbus deal

This picture taken on Feb 24, 2016, shows a French Caracal helicopter prior to an air-to-air refuelling exercise in Cazaux.
This picture taken on Feb 24, 2016, shows a French Caracal helicopter prior to an air-to-air refuelling exercise in Cazaux.PHOTO: AFP

PARIS (Reuters) - France reacted angrily on Friday (Oct 7) after Poland scrapped a multi-billion-dollar helicopter deal with Airbus, warning it would review defence cooperation with its Nato ally and cancelling a presidential visit to Warsaw.

Poland had agreed to buy 50 Airbus utility helicopters in April 2015 for 13.5 billion zlotys (S$4.8 billion) as part of efforts to modernise its military at a time of tensions with Russia.

Its previous centrist government, beaten by the Law and Justice (PiS) party in elections last October, had agreed the provisional deal, but on Oct 4 the new authorities said they were scrapping the contract altogether.

Members of the new eurosceptic government have said they would rather see the deal awarded to a company that could build the helicopters locally.

"The Franco-Polish bilateral relationship will undeniably be extremely affected by this decision," a French source close to the matter said.

"The contract's cancellation will force us to review all the defence cooperation that we have with Poland and see what can be maintained and sadly what can't in the current context."

Without indicating which investments, the source added that the French government, which holds roughly 11 per cent in Airbus, would advise the firm to review its strategy in the country, including investments that had already been made.

A source in the French presidency had earlier said President Francois Hollande had decided to cancel a visit to Warsaw next week for intergovernmental consultations, in protest.

In a speech on Friday, Prime Minister Manuel Valls took a swipe at Poland at a time when the European Union is trying to reinforce its common defence policy in the face of growing concerns over Russian foreign policy, Islamic militancy and the refugee crisis.

"Poland is a big country, but questions need to be asked of Poland, notably its defence industry, after the choices that have just been made," Valls said.

"As far as France is concerned, we're worried because negotiations had started, but also for the very concept of European defence." Polish media has reported that Warsaw has already begun negotiations with US firm Lockheed Martin's Sikorsky, manufacturer of locally-produced Black Hawk helicopters that could be purchased by the Polish army as soon as this year.

As well as boosting Poland's defence industry, buying Sikorsky helicopters could further strengthen Warsaw's ties with Washington, already its closest ally.

"Before we had a centre-right platform that understood it was in Poland's interest to go beyond the US axis and have a bilateral relationship with France and Germany," a French diplomatic source said.

"But clearly the PiS doesn't understand the benefits for Poland, which are frankly huge in its European arena."

Poland's government spokesman and the defence and economy ministries were not immediately available for comment.