EU threatens more Russia sanctions, prepares to sign Ukraine pact

They said further “targeted measures … can be taken should events in eastern Ukraine so require”.

Dutch FM Frans Timmermans and his British counterpart, William Hague, noted that EU leaders will decide on sanctions at the summit on Thursday and Friday.

Hague said “the response of Russia to the peace plan that [Ukrainian] President Poroshenko has put forward will be instrumental to the calculations of the European Union”.

French FM Laurent Fabius added that the French and German leaders phoned Russia’s Vladimir Putin over the weekend to urge action “in the coming days”.

EU countries on Monday completed legal preparations to sign a free trade treaty with Poroshenko in Brussels on Friday and to implement it without waiting for formal ratification in the 28 capitals.

They said Ukraine can pass to the second stage of talks on visa-free travel.

They agreed to launch a two-year long EU mission this summer to train Ukrainian police and gendarmes.

They also banned imports from Crimea, a Ukrainian region annexed by Russia in March, unless they have Ukrainian customs stamps. The ban, which takes effect on 25 June, includes a prohibition on “financial and insurance services related to the import of such goods”.

Ukraine’s new foreign minister, Pavlo Klimkin, attended the Luxembourg meeting.

He said “it was very important for me, personally, to hear such complete support from the [EU] ministers”.

With Russia threatening to impose trade restrictions on Ukraine after it signs the EU pact, he noted that new access to the EU single market will mean “more jobs, not just in agriculture, or IT, but also in industry, where EU investment should come to Ukraine”.

With Russia having also cut off gas supplies to Ukraine in a price dispute, Klimkin said Ukraine will continue to push for a market price and for contractual “guarantees” that any new price will stay in place.

2.9, 3.2, or 2.2?

It is unclear whether the EU’s “targeted measures” refer to more names on the Russia blacklist, or triggering so-called “stage three” economic sanctions against Russia's high-tech, energy, and banking sectors.

The European Commission has finalised the sanctions package, which include what one diplomat called "hard, medium, and soft" options in each of the three areas.

Some countries, including Austria, Germany, Italy, and Spain, are wary of going ahead.

For his part, Sweden’s Carl Bildt told press: “It doesn’t matter whether you call it stage 2.9, 3.2, or 2.2, the important thing is that if Russia continues with destabilisation measures, then we will continue with our measures”.

The EU is currently considering whether to cancel a summit with Putin due in December. But in the meantime, Austria has opted to invite the Russian leader to Vienna on Tuesday to mend fences.

Asked if the invitation is a sign of European disunity, Bildt said Sweden would not have welcomed Putin at this time because he “is trying to split the European Union … that’s what the Russians always do when they are in a cornered position”.

In a further sign of Russia-wariness, a senior EU diplomat told EUobserver some EU states had wanted the police training mission to also reform Ukraine’s military and intelligence services. But the idea did not fly because “we want to convey the message to Russia that we’re not getting mixed up in any military operations there ... to take military measures now would be seen as a bellicose act by Russia”.

He added that some member states think the Crimea ban is a bad move.

“I think we’re going to see it challenged in the EU court and I think there’s a good chance we’ll lose … If you were are, say, a chocolate-maker in Crimea, you would be thinking: ‘Why am I being punished? None of this is my fault’.”

Asked if he thinks Putin will escalate the Ukraine conflict this week as a price tag for the treaty signature, the diplomat said: “Nobody can predict Putin's actions. I think he had a plan in the beginning, but he is improvising at this stage”.