THE EU has signed an historic free-trade pact with Ukraine and warned it could impose more sanctions on Moscow unless pro-Russian rebels act to wind down the crisis in the east of the country by Monday.
Ukrainian President Petro Poroshenko came to Brussels to sign a far-reaching trade and political cooperation agreement with the EU that has been at the heart of months of deadly violence and upheaval in his country, drawing an immediate threat of "grave consequences" from Russia.
Georgia and Moldova signed similar deals, holding out the prospect of deep economic integration and unfettered access to the EU's 500 million citizens, but alarming Moscow which is concerned about losing influence over former Soviet republics.
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EU leaders meeting in Brussels demanded that, by Monday, Ukrainian rebels agree to ceasefire verification arrangements, return border checkpoints to Kiev authorities, free hostages and launch serious talks on implementing Mr Poroshenko's peace plan.
If Ukrainian rebels do not de-escalate tensions, the EU may expand sanctions against Russia as early as next week, by targeting new people and companies with asset freezes. More than 60 names are already on the list.
Although it has drawn up a list of hard-hitting economic sanctions against Russia, the EU still does not appear ready to deploy them because of fears among some member states of antagonising their major energy supplier.
Mr Poroshenko said: "We are talking about possible sanctions against Russia but we do not have to introduce sanctions for the sake of sanctions. We do have a need for a dialogue. I hope this dialogue will take place and we will have a real ceasefire."
He has drawn up a 15-point peace plan to defuse the crisis in eastern Ukraine, where hundreds of people have been killed in clashes between security forces and pro-Russian rebels.
Ukraine, Georgia and Moldova have made clear their ultimate goal is EU entry but Brussels, under pressure from voters who are weary of possible further expansion, has made no promise it will allow them in. Ukraine's former pro-Moscow President Viktor Yanukovich turned his back on signing the EU agreement last November in favour of closer ties with Moscow, prompting months of street protests that eventually led to his fleeing the country.
Soon afterwards, Russia annexed Ukraine's Crimea region, drawing outrage and sanctions from the US and EU, and pro-Russian separatists began an uprising in eastern Ukraine.
"Over the last months, Ukraine paid the highest possible price to make her European dreams come true," Mr Poroshenko said, calling the accord the most important day for his country since independence from the crumbling Soviet Union in 1991.
Symbolically, he signed the agreement with the same pen that had been prepared for Mr Yanukovich to sign the document last year.
Russia's Deputy Foreign Minister Grigory Karasin immediately said the signing would have "grave consequences" for Ukraine.
Mr Poroshenko urged the EU to reward Ukraine for its sacrifices by promising the country would be eligible for membership of the EU once it was ready.