Europe prepares sanctions against Russia

European officials were preparing sanctions against Russia and additional aid for Ukraine as diplomats acknowledged their efforts had not only failed in persuading Russia to calm the conflict but had seen the Kremlin tighten its grip on Crimea.

A German-led effort to establish a “contact group” to negotiate a Russian stand-down in the occupied region – which the EU has set as a prerequisite for Moscow to avoid travel bans and asset freezes on top officials – was foundering, with Sergei Lavrov, Russian foreign minister, saying western proposals “did not fully satisfy us”.

In a meeting with Vladimir Putin, Russian president, Mr Lavrov laid blame for the diplomatic stalemate at the feet of John Kerry, saying the US secretary of state had cancelled a trip to Moscow at the weekend and was insisting Russia recognise the new government in Kiev.

A Russian foreign policy official said Moscow did not reject the contact group in principle but refused to tie any start of talks to the question of the Ukrainian government’s legitimacy. “Any attempt at addressing the problems in Ukraine must involve a return to constitutional order in that country,” said the official.

With little movement on western demands for de-escalation in Crimea, even officials in Germany, long the most resistant to taking a hard line against Russia, acknowledged sanctions appeared inevitable.

“The Russian side has not shown readiness to participate in such a process,” said a spokesman for Angela Merkel, the German chancellor. “We appeal to them to change this position in the near future. The time for a conversation and rapprochement is short.”

At the same time, Brussels was preparing unilateral trade concessions that could be set out as early as Tuesday that would cut or eliminate customs duties on all Ukrainian products coming into the EU. The move, if approved by EU member states, would save Ukraine an estimated €487m on exports every year and further link Kiev to the EU, a shift Moscow has assiduously worked to avoid.

Kiev has also announced it will sign political chapters in the controversial integration treaty with the EU next week. It was the rejection of that treaty by the Russian-backed Ukrainian government of Viktor Yanukovich in November that set off the current crisis.

The twin moves to punish Moscow and embrace the pro-EU government in Kiev come as pessimism grows among diplomats that they will be able to head off a scheduled referendum on independence in Crimea set for Sunday, which western leaders have condemned as illegitimate.

Officials from the EU, the US and the UK will meet in London on Tuesday to begin drawing up a list of which Russians might be affected by sanctions. EU foreign ministers will then discuss and approve that list next Monday if Russia makes no attempt to establish diplomatic communication with Ukraine and tries to ratify the Crimean referendum.

The Council of Europe, the intergovernmental human rights group of which Russia and Ukraine are both members, announced it was preparing its own legal opinion on the referendum.

Mr Lavrov said his ministry had presented proposals aimed at “returning the situation to the framework of international law and to honour the interests of all Ukrainians”. He added that he had invited Mr Kerry for talks in Moscow on Monday, but the US secretary of state had called him on Saturday and said he wanted to postpone the visit.

Even without a formal decision on sanctions, Brussels moved on Monday to turn up the heat on Moscow on the energy front by delaying a decision that would have allowed the Russian state-owned energy giant Gazprom to deliver more gas to central Europe by circumventing Ukraine.

Gazprom last year asked for EU approval to increase its capacity through the Russian-owned Opal pipeline, which runs from the Baltic sea into central Europe through eastern Germany and has had its flows limited by EU competition laws – currently at half its 36bn cubic metres a year capacity, according to company data.

Although German authorities have approved Gazprom’s request to use Opal at full capacity, the European Commission announced on Monday it needed more technical reviews of the application. EU officials, however, privately acknowledged the move was geopolitical as much as technical.

On a recommendation from Nato’s military commander, the alliance on Monday decided to start patrols of Awacs reconnaissance aircraft in Poland and Romania, as part of what a spokesman said was “part of the alliance’s efforts to monitor the crisis in Ukraine”. The aircraft will fly from bases in Germany and the UK.

Additional reporting by Geoff Dyer in Washington, Jack Farchy in Moscow and Kiran Stacey in London

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