Barroso proposes €11bn to 'stabilise' Ukraine

He added: “Ladies and gentlemen, the situation in Ukraine is a test of our capability and resolve to stabilise our neighbourhood.”

One billion euros of the new money is to come in the form of loans, paid from the EU budget, for Ukrainian macro-financial assistance.

Another €1.4 billion will come as EU grants over the next seven years. The European Investment Bank is to contribute €3 billion over 2014 to 2016 and the European Bank for Reconstruction and Development is to add €5 billion.

In other measures, the commission will add a previous pledge of €610 million of macro-financial loans. It will also try to leverage €250 million of previously-earmarked Ukraine cash to raise over €3.5 billion in loans.

Barroso noted the money will be conditional on reforms already set out by the International Monetary Fund (IMF), which include raising household gas prices.

But in return, the IMF, the World Bank, EU member states, and other countries, such as Canada, Japan, South Korea, and the US are expected to top up the EU offer.

The EU's €11 billion is almost equal to a $15 billion bailout offered by Russia before the Ukraine uprising broke out, but the top-ups could see it climb much higher.

Meanwhile, Barroso said the macro-financial aid and some €600 million of the new grants can be paid out “very fast … within a matter of weeks.”

He also proposed that EU countries should immediately apply lower trade tariffs on Ukrainian imports, as envisaged in a future free trade agreement.

He urged the Union to also get ready to pump gas to Ukraine in “reverse flows” through Soviet-era pipelines to reduce its dependency on Russian imports.

The commission offer and the EU summit come after a popular revolution toppled Ukraine’s former president Viktor Yanukovych in February, prompting Russian forces to occupy Ukraine’s Crimea region.

EU countries are expected to trigger an asset freeze and visa bans on Yanukovych, his two sons, and 15 other former regime members on Thursday morning.

They have threatened to impose similar measures against Russia if it does not pull back troops in Ukraine, but an EU diplomat said it is “too early” to draft a list of Russian names at this stage.

EU leaders on Thursday are also likely to call for international, but not EU, monitors in Crimea, after Germany, Italy, and the UK, spoke out against an EU mission at a foreign ministers’ meeting on Monday.

For its part, the Russian parliament is drafting a bill to let the Kremlin confiscate European companies’ assets if the EU goes ahead.

The EU diplomat said the result of the summit will depend, to an extent, on the outcome of talks between the British, French, German, Russian, and US foreign ministers in Paris on Wednesday.

The contact added: “There is interdependence. If we are going to enter a real sanctions game, a pain game, then it is difficult to say which side will hurt more.”