Germany warns of financial sanctions on Russia if it doesn't step back

BUDAPEST (Reuters) - Germany assumes that this weekend's referendum in Crimea will be followed by steps to absorb the region into Russia, German Foreign Minister Frank-Walter Steinmeier said on Thursday, and if there is no change in direction the European Union will be forced to consider a further, third stage of sanctions.

Speaking to reporters after meeting counterparts from central Europe, Steinmeier said Russia had so far rebuffed all European proposals to defuse the standoff in Crimea.

He said European states over the weekend would draw up a list of Russians who will be subject to visa restrictions and asset freezes as part of initial sanctions already agreed within the European Union.

(Reporting by Krisztina Than; Editing by Christian Lowe)