Merkel criticises Russia on eve of Vilnius summit

But Germany's privileged economic relations with Russia, and Merkel's standing as the most powerful leader in the EU, make her words carry special weight.

Most of the six Eastern Partnership states - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine - are also attending at the top level.

But Ukrainian President Viktor Yanukovych, in a shock u-turn last week, said he will not sign an EU association and free trade treaty, citing Russian threats to cut off trade.

His signature was to have been the centrepiece of the summit.

In a sign of how much EU countries had wanted to make it happen, EU sources told EUobserver they were willing to do it even if he kept former PM Yulia Tymoshenko in jail.

"It means the Eastern Partnership is dead," one EU diplomat told this website.

"It's an insult to the EU and I don't see any point in Yanukovych going to Vilnius any more," he added.

For her part, Merkel played down the Ukraine fiasco at a pre-Vilnius press briefing in Berlin on Wednesday, however.

She accepted Yanukovych's statements - that his decision is "not a rejection of Europe, rather a postponement of the signature" - at face value.

She added: "We will continue to offer this agreement."

But she reserved harsh words for Russia.

With Armenia also backing out of an EU pact due to Russian threats, Merkel said: "The more they [post-Soviet countries] come closer to Europe, the more Russia sees it as distancing themselves from Russia."

"The EU and Germany have to talk to Russia. The Cold War is over," she noted.

She added: "These countries must and should decide for themselves [on EU integration] ... We need Russia. We import their gas. We have a common interest to see the Russian state modernise. But we must overcome the last relics of the Cold War."

A senior German official told journalists that if Ukraine changes its mind, it could qualify for €500 million of EU aid.

Poland's foreign minister, Radek Sikorski, echoed Merkel.

He said in Polish daily Rzeczpospolita on Thursday that Yanukovych can sign after Vilnius.

He noted the EU will not enter a "bidding war" with Russia on Ukraine, adding: "We [EU states] are more attractive in civilisational and economic terms."

He also claimed the Eastern Partnership policy, his brainchild, is a success because it has "focused the attention" of EU leaders on the east.

He pointed out that a parallel project, the EU's Union for the Mediterranean, is, by comparison, genuinely defunct.

Meanwhile, the European Commission on Wednesday gave Moldova's pro-EU government a gift by proposing to extend visa-free travel to Moldovan citizens with biometric passports.

Home affairs commissioner Cecilia Malmstrom described it as "an encouragement for other eastern partners."

Moldova and Georgia are to initial association and free trade pacts with the EU in Vilnius.

The initialing - which marks the conclusion of negotiations - will be the only tangible result of the two-day meeting.

Some EU diplomats fear that following its demolition of the Ukraine treaty, Russia's next move will be to stop Georgia and Moldova from ever signing or implementing the pacts.

But Georgia's foreign minister, Maja Panjikidze, said in an op-ed for EUobserver on Thursday that "as Russian troops and barbed wire continue to encroach on our sovereignty, Georgia’s commitment to European and Euro-Atlantic integration stands stronger than ever."

The EU had hoped to also sign a "Strategic Modernisation Partnership" with petro-dictatorship Azerbaijan.

But the two sides could not agree language on human rights in time for Vilnius.

Belarus is to send its foreign minister, Vladimir Makei, after the EU took him off its visa-ban list so he could come.

One EU official said Makei's attendance could mean that Belarus wants to mend relations and might shortly free a few political prisoners.

But Belarus has punctured EU hopes time and again in the past 20 years of President Alexander Lukashenko's iron-fisted rule.