David Vincent, Associated Press
In this March 5, 2014 file photo, French-built warship BPC Vladivostock, designed to strengthen Russia's ability to deploy troops, tanks and helicopter gunships, leaves the Saint Nazaire's harbor, western France, for its test run on the open sea off coast of France. French President Francois Hollande is defending plans to deliver a 1.1 billion-euro French-made warship to Russia.
PARIS — France says it will go ahead with the sale of a warship to Russia, despite calls for an arms embargo against the country, highlighting how Europe's strong business ties are hindering its ability to punish Moscow over the crisis in Ukraine.
Western powers say Russia is supporting the insurgents in eastern Ukraine that are accused of shooting down a Malaysian Airliner last week, killing all 298 people on board. European Union foreign ministers met Tuesday to consider more sanctions against Russia but agreed only to impose more asset freezes on individuals, leaving economic relations unscathed.
Some countries, like Britain, argue the plane crash has raised the stakes and Europe cannot be seen going soft on Russia.
But others are more cautious, mindful of the potential costs of pinching business relations. Among other things, Germany imports a third of its energy from Russia. France's commercial deals include the delivery of two warships, the biggest ever sale by a NATO country of military equipment to Moscow.
French President Francois Hollande on Monday night warned about the costs of cancelling the deal. The first warship, the Vladivostok, is nearly finished and due to be delivered in October.
"The Russians have paid. We would have to reimburse 1.1 billion euros ($1.5 billion)," he said.
Hollande said the French-made warship deal wouldn't fall under new sanctions because it was finalized in 2011. French officials have also argued that the ship would be delivered without any weapons.
He said delivery of the second warship included in the deal could "depend on Russia's attitude."
U.S. sanctions against Russia have been stronger than Europe's. Last week, it blocked high profile oil companies and banks from access U.S. markets for financing. Action from the EU has mainly targeted individuals instead.
Further European sanctions against Moscow would not necessarily include a ban on the delivery of the ship, a top French official told the Associated Press, speaking only on condition of anonymity because discussions were still ongoing with other EU members.
"France wants the sanctions to be financial, targeted and quick," he said.
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France's contract for the warships covers the construction of two ships from the French town of Saint-Nazaire.
The warship is built by French state-owned military contractor DCNS and the French shipbuilding company STX. France says the ship can carry 700 troops, 16 helicopter gunships, and as many as 50 armored vehicles.
Some 400 Russian sailors are currently in Saint-Nazaire training aboard the Vladivostok.
The sister ship, the Sebastopol, which is scheduled to be delivered by the end of 2015, is currently under construction.
Sylvie Corbet can be followed at http://Twitter.com/SylvieCorbet