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PM warns Russia of 'consequences'

David Cameron warned Russia it faces international isolation and tighter sanctions unless Moscow takes steps to de-escalate the crisis in Ukraine.

The Prime Minister said the European Union had agreed a range of measures in response to Moscow's annexation of Crimea, including trade restrictions on the "occupied" peninsula.

Mr C ameron has joined other EU leaders in signing an agreement with Ukraine which aligns the new administration in Kiev more firmly with Europe.

Former president Viktor Yanukovych's refusal to sign the Association Agreement with the EU last November triggered the protests which led to his overthrow. Interim prime minister Arseniy Yatsenyuk travelled to Brussels to sign political provisions of the agreement today, with the EU committed to finalising the economic elements soon.

The move follows the EU's decision to expand its blacklist of Russian officials and politicians subject to travel bans and asset freezes by 12 names to reach a total of 33, in retaliation for Russia's annexation of the Ukrainian region of Crimea.

The upper house of the Russian parliament today approved the absorption of Crimea into the Russian Federation following last weekend's referendum, in which residents of the Black Sea peninsula overwhelmingly backed a breakaway from Ukraine. The move, approved yesterday by the Duma in Moscow, was completed with the signature of President Vladimir Putin.

At a press conference following the summit in Brussels Mr Cameron said: "Our message to Russia is clear: choose the path to diplomacy and de-escalation or face increasing isolation and tighter and tighter sanctions."

He condemned the " sham and illegal referendum" in Crimea, which "has taken place at the barrel of a Kalashnikov".

"Russia has sought to annex Crimea," he said. " This is a flagrant breach of international law and something we will not recognise. This behaviour belongs to the Europe of the last century not this one. It cannot be ignored or we risk more serious problems in the future.

"So it was very important that the European democracies represented here should send a strong and united message that Russia should face further consequences, and that is what we have done.

"We have subjected 12 more individuals to travel bans and asset freezes, bringing the total to 33. We have cancelled the EU-Russia summit, agreed not to hold bilateral summits and we'll block Russian membership of the Organisation for Economic Co-operation and Development and the International Energy Agency.

"We have agreed to rapidly implement economic, trade and financial restrictions on occupied Crimea. We will only accept Crimean goods in the EU if they come from the Ukraine and not Russia."

He said the European Commission had been charged with drawing up further sanctions against Russia if there was any further attempts to destabilise Ukraine, promising they would have "far-reaching economic consequences".

Mr Cameron stressed the importance of strong European support for Ukraine now as a method of deterring Moscow from pursuing similar policies in respect of other countries on Russia's borders.

EU leaders have agreed to bring forward by several months the signing of association agreements with both Georgia and Moldova amid concerns over the potential for Ukraine-like situations to occur elsewhere in the region.

The summit conclusions said the EU was committed to "further strengthen the political association and economic integration with Georgia and the Republic of Moldova".

"We confirm our aim to sign the association agreements, including the deep and comprehensive free trade areas, which we initialled in Vilnius last November, no later than June 2014," Mr Cameron said.

The previous target was August.

"That was a change we made last night and I think that is a very positive signal," the Prime Minister said.

"If this can happen in Ukraine, then we have to be very clear about how unacceptable it is because otherwise we will face similar situations in similar countries with a similar sort of unacceptable behaviour."

He also said the European Commission was looking at ways of reducing the 28-member bloc's dependency on Russian energy supplies, which has been seen as a potential barrier to stricter sanctions against Mr Putin's administration.

"We agreed to step up our efforts to reduce Europe's dependency on energy from Russia and we have asked the European Commission to produce by June a comprehensive plan to achieve this," Mr Cameron said.

The leaders also agreed to accelerate efforts to complete the internal energy market and to improve the energy flow across the continent with more interconnections.

The Prime Minister said the "best rebuke" to Moscow would be a successful Ukraine, helped by efforts to boost ties with the EU including the "landmark agreement" signed in Brussels.

"We have already seen 10% wiped off the value of the Russian stock market this month, reports of capital flight and downgraded credit ratings," he said.

"But the best rebuke to Russia is a strong and successful Ukraine, free to make its own choices about its own future."

He praised Mr Yatsenyuk's " efforts to lead a stable, democratic government that reaches out to the regions and respects the rights of minorities" and commended the restraint shown by the country's authorities " under particularly difficult circumstances".

Mr Cameron stressed the need for an Organisation for Security and Co-operation in Europe mission to be "rapidly deployed" in the region and indicated that an EU mission would be sent if that was blocked.

"In the long term the biggest challenge will be to build a strong Ukrainian economy, rooted in strong institutions that respect the rule of law," he added.

"We continue to work on an IMF package for Ukraine and we have called on MEPs to rapidly confirm the removal of customs duties on Ukrainian exports which should benefit businesses there by up to 500 million euros (£418 million) a year."

He added: "In the long run Ukrainian success will be one of the most powerful answers to Russian aggression. This is the vital contribution that Europe can make to help the Ukrainian people in their hour of need and we are determined to deliver it."

Asked if Mr Cameron would consider adding Russian oligarchs, including Roman Abramovich, to the sanctions list, he said: "We certainly haven't ruled anyone out from this approach but the EU approach, and the way it works under the laws that we have, is that you need to target people who have a direct relationship with the action that has been taken."

The 12 individuals added to the EU blacklist include deputy prime minister Dmitry Rogozin, Putin's adviser Sergey Glazyev and aide Vladislav Surkov, the Speakers of Moscow's lower and upper parliamentary houses Sergei Naryshkin and Valentina Matviyenko, and Russian MP Elena Mizulina, who sponsored proposals to allow regions to join Russia without the agreement of their national authorities.

The head of Russia's federal state news agency, Dmitry Kiselyov, was also subjected to sanctions, as were the commander of Russian troops in Crimea, Lieutenant General Igor Turchenyuk, and two deputy commanders of the Black Sea fleet, Rear Admirals Alexander Nosatov and Valery Kulikov.

Also named were the chairs of the Crimea Electoral Commission, Mikhail Malyshev, and the Sevastopol Electroral Commission, Valery Medvedev, who oversaw last weekend's referendum.

Asked what sectors of the Russian economy could be targeted if the EU moves to the next stage of sanctions, Mr Cameron replied: "The text says 'a broad range of economic areas'. Obviously, that must include key areas like finance, like the military, like energy.

"There is nothing left out from that text, and I want to be clear that all of those sorts of areas, in my view, would be and should be considered.

"The Commission and member states now need to prepare possible targeted measures in order to be in compliance with what we agreed last night."

Mr Cameron said the EU needs to take action to diversify its sources of energy to make it less dependent on Russia, but he also rejected suggestions that Moscow holds the whip hand because of its vast reserves of oil and gas.

"Of course, Europe is 25% or so reliant on Russian gas, but if you look at Gazprom's revenues, something like 50% of them come from Europe, so Russia needs Europe more than Europe needs Russia and that's an important point to make," he said.

Shadow foreign secretary Douglas Alexander urged Mr Cameron to press for Russia to be suspended from the G8 in talks with US president Barack Obama and other leaders of the world's largest economies in The Hague next week.

He said: " Today's decision by the Russian parliament to officially endorse the accession of Crimea into Russia shows why it is vital that the UK continue to work in step with our allies to increase the economic and diplomatic pressure on president Putin to change course.

"Labour has called for Russia to be suspended from the group of the world's largest economies, the G8, and I hope David Cameron now presses for that step to be taken when he meets with President Obama and other G7 leaders in The Hague on Monday.

"I welcome the EU Council measures agreed today to ensure support for the interim government of Ukraine continues in the run up to presidential elections in May, including the signing of the political provision of the EU-Ukraine association agreement."

Liberal Democrat peer Lord Oakeshott suggested that Mr Abramovich should be targeted by sanctions.

He told BBC Radio 4's World at One: "There is a lot of Russian money here; whether it's long-term investment, whether we would really be so damaged by some of it going I'm not sure. This is the argument we always hear from the City of London and the Treasury are pretty feeble standing up to it.

"When there's any dirty money from dictators or tyrants anywhere round the world it doesn't look like we're as tough as we should be.

"If you're serious about sanctions you have to think about effective sanctions. Just putting a travel ban and an asset freeze ban on a few people that very few people have heard of is not going to be effective.

"If we were really serious about it, if Roman Abramovich, for example, as people say is very close to Putin and part of the inner circle, an asset freeze on him would really bite, even if he had to sell Chelsea."

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