EU wields Russia sanctions threat

Petro Poroshenko said a war loomed if Russia continued an advance in support of pro-Moscow rebels.

The European Union Commission headquarters in Brussels. Picture: AFP.

BRUSSELS - The European Union (EU) threatened Russia with new trade sanctions if Moscow fails to start reversing its action in Ukraine, but sharp divisions among leaders at a summit in Brussels left the timing of any measures uncertain.

After a lengthy briefing by Ukrainian President Petro Poroshenko, who warned "full-scale war" was imminent if Russian troops continued an advance in support of pro-Moscow rebels, the EU leaders agreed on Sunday to have officials draw up within a week a list of new measures that could hit a range of sectors.

But anxiety about the impact of sanctions on their own sluggish economies - and their access to Russian energy supplies - meant a divided EU could not agree to impose firm deadlines or precise conditions on President Vladimir Putin. He denies his forces are involved, in the face of substantial evidence.

The European Council called on Russia "to immediately withdraw all its military assets and forces from Ukraine" and urged a ceasefire. The leaders asked the EU's executive arm, the Commission, to prepare proposals on new sanctions for them to review within a week, including measures that would penalise any person or body which dealt with Ukraine's eastern separatists.

German Chancellor Angela Merkel, the bloc's most powerful figure, noted measures would be ready within a week and said Putin must act to avoid them: "There will be decisions about new sanctions, if the current situation goes on or deteriorates."

She said the penalties could be in any of the business sectors the EU has already said could be targeted.

But asked about a deadline for EU action, the summit chairman, EU Council President Herman Van Rompuy, said: "It depends, further steps, on development of the situation on the ground. There is no precise criteria, but I can assure you that everybody is assured that we have to move quickly."

Underlining division among the 28 member states during talks that lasted till after midnight, the Slovak Prime Minister, Robert Fico, called sanctions "meaningless and counter-productive" and threatened to veto any new measures that harmed Slovakia's interests. Those include its need for Russian gas.

Van Rompuy, whose successor was named on Saturday as Polish Prime Minister Donald Tusk, conceded that the sanctions caused problems for member states: "But this is the price to pay."