France has decided not to deliver the first of two helicopter carriers to Russia - despite talk of ceasefires in Ukraine. With NATO leaders meeting in the UK Ivor Bennett looks at the significance of the decision ahead of new EU sanctions.
They were seen as a lifeline for the French economy. Two helicopter carriers bound for Russia in a deal worth 1.2 billion euros. But now France may have to pay that money back - after halting delivery at the 11th hour in light of Moscow's actions in Ukraine. A significant moment, says Carsten Bzreski from ING. SOUNDBITE (English) CARSTEN BRZESKI, SENIOR ECONOMIST, ING, SAYING: "It's obvious that it's going to hurt France economically but right now I think we've reached a stage in the Ukraine crisis in which politics are much more important than economic aspects." The tougher stance comes as NATO leaders gather in Wales for a summit billed as the most important in decades. The crisis in Ukraine is top of the agenda. It was thought a ceasefire plan announced by Russia could wrongfoot the alliance as the US and the EU consider fresh sanctions. But that notion was quickly dismissed in opening remarks by NATO Secretary-General Anders Fogh Rasmussen. (SOUNDBITE) (English) NATO SECRETARY-GENERAL, ANDERS FOGH RASMUSSEN, SAYING: "We are faced with a dramatically changed security environment; to the east, Russia is attacking Ukraine" It's the first time since the Cold War that NATO views Russia as a hostile force. A sigh of relief no doubt for Ukrainian President Petro Poroschenko. But the alliance's support of Kiev also risks riling Russia. Foreign Minster Sergei Lavrov responding with barbs of his own. (SOUNDBITE) (Russian) RUSSIAN FOREIGN MINISTERS, SERGEI LAVROV, SAYING: "Some of our Western partners, including unfortunately the most influential player, the United States - want victory for NATO and a situation where America is dictating its own will to everyone. This concept of exclusivity, which President Obama has repeatedly declared, can lead to no good." Despite the apparent ceasefire, fighting is still raging. The outskirts of Donetsk once again the target of overnight shelling. More peace talks between Kiev and pro-Russian separatists are planned in Minsk on Friday. As the Cold War rhetoric ramps up around them, the stakes are higher than ever.