France is finding out that being a “Little Satan” can be more uncomfortable than being a big one. Whatever the outcome, the Gulf war threatens to end in political and economic disaster for France, which has become number two demon in the eyes of the ayatollahs by selling Iraq more arms than it can pay for.

As the only European country that has officially kept arming one side in the Gulf war, France has become a closer and more vulnerable target for pro-Khomeini militants than the Great Satan, the United States. The September 1986 wave of terrorist bombings in Paris and the detention of French hostages in Lebanon are understood in Paris as Iran’s way of waging undeclared war against France. The terrorists have been demanding, among other things, that France stop arming the Iraqis.

By now, however, France is so tied to the regime of Saddam Hussein by Iraq’s accumulated debts to French arms manufacturers that abandoning Hussein is a luxury Paris cannot afford. Iraqi debts to France are currently estimated at between $6 and $7 billion, and Paris has been pouring in more to save its original investment. If Iran should succeed in its declared war aim of overthrowing Saddam Hussein, a successor regime might give low priority indeed to paying back the French. The default could be a devastating blow to the already flagging French arms industry.

Lucid French observers recognize that it was the relative weakness of French industry that got it into this mess to start with. France got stuck in the arms export sector, observes Paul Balta in a recent book, “for reasons having as much to do with its historic evolution as with the mentality of its industrialists, used to the captive markets of the colonies and lacking the savoir-faire of their foreign competitors.” French exporters have traditionally counted on the French state to find their markets for them, either in French colonies or through state-to-state deals. For the latter, military equipment is the favored merchandise.

In the 1960s, de Gaulle broke off the extremely close anti-Arab alliance with Israel that had prevailed throughout the war in Algeria in order to open Arab markets for France. The best of these markets turned out to be Iraq, where, unlike Saudi Arabia, the French did not have to compete with the Americans. Iraq had lots of oil money and big ambitions. Saddam Hussein visited Paris in 1972; President Valery Giscard d’Estaing’s prime minister, Jacques Chirac, went to Baghdad in 1974 to sign the first big contracts. This seemed a smart way of parrying the OPEC price increases. The arms sales took on aspects of an alliance as French intelligence chief Alexandre de Marenches became “great friends” with Iraqi leaders and France undertook to build Iraq a nuclear industry (repeatedly sabotaged and finally bombed by Israel).

When Iraq launched its war against Iran in September 1980, France, like other Western countries, suspended arms sales to the belligerents. But on January 31, 1981, under pressure of the lobby created by the Iraqi contracts, headed by Dassault aviation, Giscard turned around and authorized the first deliveries of 60 Mirage F1 fighter planes equipped with air-to-air missiles, which had been ordered by Iraq in 1977.

A change of policy might have been expected after the May 1981 election of Socialist Frangois Mitterrand, a great friend of Israel. However, the Socialists’ two most heartfelt values are secularism and modernity. These values provided ideological reasons for carrying on the de facto alliance with Iraq against Iran. The devotion of the French Socialists to the ideal of a secular, modern and modernizing state is a product of the “historic evolution” referred to by Balta. Iraq is such a state, whatever its other faults. The threat from Khomeini’s theocracy inspires in the French a genuine horror and revulsion.

When France offered exile to Khomeini, it was to keep him within reach (and possible influence) of pro-Western agents, whereas the exile offered to the whole range of anti-Khomeini exiles was a matter of elective affinities. When on July 29, 1981, President Abol Hasan Bani Sadr fled to France along with left Islamist guerrilla leader Masoud Rajavi, the French government evacuated most of its nationals and diplomats from Iran to forestall an embassy hostage crisis such as the one that brought down Jimmy Carter. Rajavi set up a virtual military command center in the village of Pontoise, north of Paris, under the protection of the French army. Bani Sadr pulled out of this setup when Rajavi actually moved into an explicit alliance with Iraq.

Saddam Hussein had expected a short, victorious war. But by 1983 Iraq was bogged down militarily and its $35 billion in reserves had melted away. To protect its investment, France in August 1983 agreed to reschedule the Iraqi debt, and to keep the exports flowing the Mitterand government advanced Iraq a billion dollar loan guaranteed by COFACE, the Compagnie Francaise d’Assurance pour le Commerce Exterieur. The Iranians were justifiably annoyed: France was at the same time stalling on repayment of $1 billion lent by the shah to the French Atomic Energy Commission in 1974. Also in 1983, French Defense Minister Charles Hernu agreed to “lend” Iraq five Super-Etendard jets equipped with Exocet missiles. This was no longer a commercial deal. It was a French government gesture of military aid that was meant to help Iraq end the war by attacking Iranian oil exports.

Just as French backing for Iraq peaked in 1983, the French involvement in Lebanon alongside the United States gave Iran new opportunities for recruiting Lebanese Shi‘a to combat the Little Satan. On October 23, 1983, the Islamic Jihad claimed two car bomb attacks in Beirut, one against US Marine headquarters, killing 241, and the other against a French military command post, killing 58. The US then backed out of the ill-defined mission to Lebanon, leaving its European allies in the lurch.

As the Exocets failed to defeat Iran, French officials began to be aware of the dangers of putting all the French eggs in the Iraqi basket and started trying to move to a more neutral position. Gestures such as the shipment of 100,000 shells to Iran, the June 1986 expulsion of Rajavi to Iraq, and grudging repayment of a third of the $1 billion debt have been dismissed as too little and too late by Khomeini’s disciples. Islamic Jihad has refused to free the French hostages it began capturing in Lebanon in March 1985.

It now seems that pro-Iranians may have been behind the September 1986 crowd bombings in Paris. The terrorists have demanded the release of Lebanese architect Anis Naccache, serving a prison term in France for a botched July 1980 attempt to assassinate former Iranian premier Shahpour Bakhtiar, which cost the life of a neighbor instead.

There is also strong suspicion in Paris that Iran was behind the January 1985 assassination of Gen. Rene-Pierre Audran, 55, claimed by the tiny ultra-left terrorist group Action Directe. In charge of French arms exports, Gen. Audran was known by insiders as “Mr. Iraq” for negotiating the 1975-1976 contracts. In 1984, Gen. Audran started and then called off arms sales negotiations with the Iranian government.

In contrast to France, other European countries all officially banned arms sales to the belligerents and have maintained a neutral stance. Undercover arms sales, sometimes to both sides, have counted as scandals rather than as government policy. West Germany, Britain, Italy and Japan have been trading briskly in non-military goods with both Iran and Iraq, while staying on good terms with both. While refusing to export arms to the war zone, West Germany has remained the number one exporter to both Iran and Iraq. Moreover, once the war is over, Germany, Italy and Japan are well-placed to make money in the work of post-war reconstruction.

The Gulf war has exposed the folly of France’s dependence on arms exports.

How to cite this article:

Diana Johnstone "“Little Satan” Stuck in Arms Export Trap," Middle East Report 148 (September/October 1987).

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