EU Expected to Issue New Sanctions on Russia — Update

By Laurence Norman in Brussels And Sam Schechner in Paris

European Union leaders will agree to new sanctions on Russia, European Commission President José Manuel
Barroso and French President François Hollande said on Saturday, amid the deepening crisis in Ukraine.

“I expect the leaders of the European Union member states…to be ready for a new round of sanctions following the
recent escalation and further destabilization of Ukraine. That’s what they have said and that’s what I expect them to
do,” Mr. Barroso said after a meeting with Ukrainian President Petro Poroshenko.

Mr. Hollande also said that probable incursions by Russian troops inside Ukraine will “no doubt” lead the EU to
slap a new round of sanctions on Moscow.

EU leaders are meeting Saturday afternoon to agree their picks for two top EU jobs and to discuss the crisis in
Ukraine and other foreign policy issues. Mr. Poroshenko will join that meeting. On the agenda will be the possibility of
imposing a fresh round of sanctions on Russia, broadening the measures the bloc imposed in July.

Mr. Barroso warned Russia not to “underestimate” the bloc’s will to stand by Ukraine and said the allegations that
hundreds of Russian troops have crossed into Ukraine a “grave transgression” and escalation of the crisis.

The Kremlin denies that any Russian troops have been deployed in Ukraine.

“This is the most serious crisis since the end of the Cold War,” Mr. Hollande said in a short televised address
before leaving Paris for Saturday’s meeting. “Up against these worsening tensions, decisions must be made.”

Mr. Hollande said that he had spoken with Russian President Vladimir Putin on Friday to express his hope that there
can be a negotiated solution to the conflict in eastern Ukraine, where Russian-backed separatists have been fighting the
Ukrainian government.

Mr. Barroso confirmed that the bloc is prepared to consider additional financial assistance for Ukraine, on top of
the EUR1 billion ($1.31 billion) Ukraine could receive from the bloc under already earmarked plans.

“We are ready to consider further financial assistance should additional needs be identified by the” International
Monetary Fund.

However, Mr. Barroso didn’t comment on Mr. Poroshenko’s renewed request for some military assistance from the bloc.
Many member states are wary of providing Kyiv with anything beyond nonlethal defense equipment.

“We are in a very serious, I would say dramatic situation. We may see a situation where we reach the point of no
return,” he said. I believe it’s still not too late to find a political solution.”

In July, the EU agreed for the first time on broad sanctions against Russia’s economy, the sharpest measures yet
since Moscow annexed Crimea in March. At the time, the bloc said the measures could be scaled up or down according to
developments.

July’s sanctions included a ban on purchasing newly issued bonds and shares in five Russian majority state-owned
banks. The EU agreed on an arms embargo and a ban on the sale of dual-use goods to military end-users in Russia. The
bloc also agreed to stop exports of high-end technology to be used in deep-water oil exploration and production.

Saturday’s comments come as Ukraine suffered a setback in its efforts to isolate one of the biggest remaining
rebel-held strongholds on Friday.

Separatists, backed by Russian forces, advanced further in the east, Ukrainian government officials said.

The continued fighting came as Mr. Putin on Friday unleashed a verbal offensive against Ukraine and its Western
supporters, accusing them of stalling efforts to reach a new cease-fire and open talks.

Adding to the tension, the Ukrainian government proposed repealing a law banning membership in military blocs and
moving toward joining the North Atlantic Treaty Organization, a day after NATO said more than 1,000 Russian troops are
fighting alongside the rebels in eastern Ukraine.

Russia has said such a move would be a threat to its national interest.

Write to Laurence Norman at laurence.norman@wsj.com 


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