EU threatens more EU sanctions

The decision on new sanctions will depend on the evolution of the situation on the ground, but “everybody is fully aware that we have to act quickly”, EU summit chairman Herman Van Rompuy said.

The EU leaders called on Russia to “immediately withdraw all its military assets and forces from Ukraine”.

Nato said this week that at least 1,000 Russian soldiers were in Ukraine, an accusation denied by Moscow. Nato also says Russia has amassed about 20,000 troops just across Ukraine’s eastern border, which could rapidly carry out a full-scale invasion.

The fighting between the military and Russian-backed separatists in eastern Ukraine has so far claimed 2,600 lives, according to U.N. figures.

The US and the EU have so far imposed sanctions against dozens of Russian officials, several companies as well as the country’s financial and arms industry. Moscow has retaliated by banning food imports.

At the Brussels summit, German chancellor Angela Merkel said the new sanctions would target the same sectors as previous punitive measures, which also included an export ban for some high technology and oil exploration equipment.

“If Russia continues to escalate the crisis it will come with a high cost,” said EU Commission president Jose Manuel Barroso. “It’s time for everyone to get down to the business of peace-making. It is not too late, but time is quickly running out.”

Several European leaders had called for additional sanctions at the outset of the meeting, but the fear of an economic backlash apparently prevailed and led the bloc to grant Russia another chance at avoiding tougher action. New sanctions would have required unanimity among the leaders.

Russia is the EU’s third largest trading partner and one of its biggest oil and gas suppliers. The EU, in turn, is Russia’s biggest commercial partner, making any sanctions more biting than similar measures adopted by the US

Ukrainian president Petro Poroshenko, who briefed the leaders at the beginning of their talks, said a strong response was needed to the “military aggression and terror” facing his country.

Efforts to halt the violence in eastern Ukraine were “very close to a point of no return” and failing to de-escalate the situation could lead to a “full-scale war”, he warned.

“Thousands of the foreign troops and hundreds of the foreign tanks are now on the territory of Ukraine,” Mr Poroshenko told reporters. “There is a very high risk not only for peace and stability for Ukraine, but for the whole ... of Europe.”

Meanwhile, conceding ground in the face of a reinvigorated rebel offensive, Ukraine said it was abandoning a city where its forces have been surrounded by rebels for days. Government forces were also pulling back from another it had claimed to have taken control of two weeks earlier.

The statements by Colonel Andriy Lysenko, a spokesman for the national security council, indicate that Ukrainian forces face increasingly strong resistance from Russian-backed separatist rebels just weeks after racking up significant gains and forcing rebels out of much of the territory they had held.

European leaders also issued dire warnings, reflecting their concern over the most recent military escalation with the opening of a new front by the Russian-backed rebels in south-eastern Ukraine.

Lithuanian president Dalia Grybauskaite said Russia’s meddling in Ukraine, which seeks closer ties with the EU, amounted to a direct confrontation that required stronger sanctions.

“Russia is practically in the war against Europe,” she said.

Ms Grybauskaite said the EU should impose a full arms embargo, including the cancelling of already agreed contracts, but France has so far staunchly opposed that proposal because it has a £970m contract to build Mistral helicopter carriers for Russia.

British prime minister David Cameron also warned that Europe should not be complacent about Russian troops on Ukrainian soil.

“Countries in Europe shouldn’t have to think long before realising just how unacceptable that is,” he said. “We know that from our history. So consequences must follow.”

Moscow, meanwhile, is preparing to send a second convoy of humanitarian aid to eastern Ukraine.

Foreign minister Sergey Lavrov said Moscow had already received Kiev’s preliminary approval and insisted that it would send aid in co-ordination with the Red Cross.

Russian state Rossiya 24 yesterday showed trucks from the previous convoy at the border being loaded with humanitarian aid that was brought to the area by train. It was unclear when the new convoy could start moving.

Mr Barroso said that the EU was ready to grant Kiev further humanitarian aid and financial assistance if needed. The bloc will also organise a donors’ conference to help rebuild the country’s east at the end of the year.