EU to unveil Russia sanctions as Ukraine truce teeters

MARIUPOL, Ukraine - Agence France-Presse

Soldiers from the Ukrainian self-defence battalion "Azov" check vehicles at a checkpoint in the southern coastal town of Mariupol September 8, 2014. REUTERS Photo

European leaders were set on Sept. 8 to unveil punishing new sanctions on Russia after weekend fighting in Ukraine imperilled a fragile truce aimed at halting a bloody pro-Kremlin uprising.
      
Ukrainian soldiers fortified their positions around Mariupol on Monday after insurgent attacks late Saturday on government positions on the eastern edge of the strategic port city.
      
The shelling killed one woman -- the first casualty since the warring parties signed a truce on Friday aimed at ending five months of fighting that has killed nearly 2,800 people and plunged East-West relations to a post-Cold War low.
      
"Another Grad missile fell here overnight," the commander of a Ukrainian checkpoint to the east of the government-held city said without disclosing his name.
      
"There was close combat about two kilometres (one mile) from here."       

The Ukrainian military also said separatist militias had violated the truce on five occasions overnight in the rebel-held strongholds of Lugansk and Donetsk in eastern Ukraine.
      
The first attacks outside Mariupol broke out only hours after Ukrainian President Petro Poroshenko and Russian leader Vladimir Putin issued nearly identical statements on Saturday agreeing the truce was "generally holding" and vowing to pursue further steps toward peace.
      
The European Union said it was ready to review plans for new sanctions against Russia over its role in the Ukraine conflict, if the truce holds.
      
Western governments accused Moscow of sending in huge numbers of troops and heavy weapons to back insurgents who launched a counter-offensive across the southeast in late August, dramatically turning the tide of the conflict.
      
EU President Herman Van Rompuy said on Sunday the measures could be reconsidered "if the ceasefire is durable, and/or if the peace talks start".
      
"We have noted that Russia only consented with difficulty to serious negotiations. The ceasefire is an important step, but it is only a step," he told Belgian television.
      
The new round of sanctions set to be approved on Monday would tighten existing measures imposed in July, targeting more individuals with travel bans and asset freezes, as well as tightening access to capital markets for Russian oil and defence companies.
      
Russian Prime Minister Dmitry Medvedev vowed to adopt "asymmetric" measures against Europe by forbidding its airlines from flying over the country on their lucrative routes to Asia should the new punitive steps go into effect.
      
"Our understanding is that we have friendly relations with our partners, which is why the skies over Russia are open to flights," Medvedev told Moscow's Vedomosti business daily in an interview published on Monday.
      
"If we are sanctioned, we will have to respond. If Western airlines are going to circumvent our airspace, this could bankrupt many companies that are already teetering on the edge of survival."        Economists estimate that such restrictions would cost EU carriers tens of thousands of dollars (euros) per flight in additional fuel and operating cost.
      
But the measure would also strip Russia's flag carrier Aeroflot of hundreds of millions of dollars in annual revenues it gets from EU airlines as compensation.
                      
The 12-point ceasefire agreement signed in the Belarussian capital Minsk is seen as the most significant to date because it won the formal backing of Putin -- seen as a decisive player in the conflict despite Russia's denials.        

But it delays difficult decisions about the status of the separatist Donetsk and Lugansk regions until talks that are not expected to resume before next weekend.
      
The rebels insist they will not give up their demands for an independent state in regions that account for one-sixth of Ukraine's population and a quarter of its exports.
      
The peace deal affords the two districts "temporary special status" within Ukraine that they would use to introduce self-government and conduct early local elections.
      
But both rebel and some Ukrainian volunteer forces have developed a track record of disobeying their political leaders and continuing battles for territory across the heavily industrialised land.
      
Ukrainian Prime Minister Arseniy Yatsenyuk warned Sunday that Kiev would have to impose martial law should the ceasefire collapse.
      
"If we have a peace plan that the EU and the US support, and which Russia implements, then of course we do not need martial law," Yatsenyuk told Ukrainian television.
      
"But if this truce ends the same way as all the other truces, and not just in Ukraine, then we will have no other choice."