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Paris - France would press ahead with a €1.2bn contract to sell Mistral helicopter carriers to Russia because cancelling the deal would do more damage to Paris than to Moscow, French diplomatic sources said on Monday.
France's move illustrates the limitations of European Union sanctions meant to punish Russia for its annexation of Crimea and dissuade Moscow from intervening in east Ukraine.
Contract
The United States has been pressing France, Germany and Britain to take a tougher line against Russia, but for France, this would mean at least delaying the Mistral contract.
For Britain, closing its mansions and bank vaults to magnates close to Russian President Vladimir Putin and for Germany, initiating gradual steps to reduce dependency on Russian gas.
France had said it would review the deal in October - but not before.
However, French diplomatic sources said on Monday that the 2011 contract with Russia for two Mistral helicopter carriers, with an option for two more, would not be part of a third round of sanctions against Moscow.
Ships
"The Mistrals are not part of the third level of sanctions. They will be delivered. The contract has been paid and there would be financial penalties for not delivering it.
"It would be France that is penalised. It's too easy to say France has to give up on the sale of the ships. We have done our part."
The Russian defence ministry warned Paris in March that it would have to repay the cost of the contract and additional penalties if it cancelled the deal.
