As EU foreign ministers meet in Brussels to discuss imposing tougher sanctions against Russia, the US and Britain are ratcheting up pressure on France to suspend a lucrative arms deal with Moscow.
The United States is continuing to pile pressure on France to suspend a $1.6bn (£1bn) defence contract with the Russian government amid calls for Europe to adopt meaningful sanctions against Moscow following the downing of Flight MH17.
As EU foreign ministers, including Philip Hammond, the foreign secretary, meet in Brussels later today to discuss toughening sanctions, the French refusal to halt the contract to supply two helicopter carriers to the Russian navy has come under particular fire.
The fact that France is still providing training to Russian service personnel was the subject of heated contacts between US and European officials last the weekend, officials said, as months of tension over the project came to a head.
“The Americans are absolutely furious about the French still training the Russians,” a Western diplomatic source told The Telegraph in Washington. “The question everyone is asking is, ‘at what point does Europe draw the line?'”
The UK, which along with Germany has already halted all defence exports to Russia, has lined up squarely behind the Obama administration which has led misgivings among some Nato countries about the French-Russian deal even before the crisis in Ukraine.
David Cameron joined the Anglo-US diplomatic offensive against the French yesterday when he said it was “unthinkable” that a British company would act like the French given the shooting down of the Malaysia Airlines flight.
“Frankly in this country it would be unthinkable to fulfil an order like the one outstanding that the French have,” Mr Cameron told the House of Commons.
“But we need to put the pressure on with all our partners to say that we cannot go on doing business as usual with a country when it is behaving in this way.” Britain has said it stands willing to take “a hit” to its financial services sector on the grounds the doing nothing to rein in Mr Putin’s excesses would ultimately prove more costly than standing up to Russian adventurism.
“Sanctions will have an economic impact, and we are prepared to undertake further sanctions,” said George Osborne, the chancellor, yesterday adding that the effect of “allowing international borders to be ignored, of allowing airlines to be shot down – that’s a much greater economic hit for Britain, and we’re not prepared to allow that to happen.”
French leaders have remained silent about whether they would cancel or suspend the sale of two carriers the first of which, the Vladivostok, is to arrive in St. Petersburg from Saint-Nazaire, in December.
Russia continued to sound confident yesterday that France would not bow to American, British and German pressure and would honour the sale.
“We’re talking about billions of euros,” Dmitry Rogozin, the Russian deputy prime minister, told Reuters in Moscow, “The French are very pragmatic.
Cancelling this contract would be less damaging to Russia than to France.”
Before flight MH17 was shot down, France had said it would press ahead with the sale of the Mistral warships despite American objections, arguing that up to 1,000 French jobs would be lost if the project was cancelled.
By comparison UK arms exports to Russia, which totalled £80m last year, and German exports which were just £4m are negligible compared to the French contracts for the Mistral.
The controversial sale, the first major arms deal between the West and Russia since the end of the Cold War, was negotiated as President François Hollande’s approval ratings were slumped amid public anger over his failure to honour his election pledge to stem rising unemployment.
About 400 Russian sailors are on a three-month training course in Saint Nazaire, learning to manoeuvre the ships. When they arrived last month, they were welcomed by local residents who hoped they would patronise local businesses in a much-needed boost to the struggling economy.
Britain is now pushing for sector-level sanctions against Moscow, and is hoping that the Dutch – a politically neutral nation that speaks with moral authority having lost the greatest number of lives in the MH17 tragedy – will lead calls for action in Brussels on Tuesday. However, both France, with its defence contracts, and Italy which has a weak and diversified economy that Rome feels would be less resilient to blowback from Moscow, continue to be reluctant to impose meaningful economic pain on Russia.
Philip Hammond, the foreign secretary, who had not originally intended to attend the Brussels meeting, will now be present in a show of intent by Britain who will urge Europe to impose further sanctions on Mr Putin’s cronies as well as naming at least one major bank.