TALLINN (Reuters) - The European Union will start preparing further responses to Russia's actions in Ukraine if Moscow does not show signs of backing down by the weekend, Germany's Foreign Minister said on Tuesday.
Russian forces have consolidated their hold on Ukraine's Crimea peninsula ahead of a Russian-backed referendum on the region's future scheduled for Sunday March 16. The government in Kiev and its Western backers have denounced the planned vote as illegal.
"If the weekend passes without a visible change in Russia's conduct then on Monday in the European (foreign affairs) council we will have to discuss a next stage of measures," German Foreign Minister Frank-Walter Steinmeier said in the Estonian capital Tallinn.
"We don't want confrontation but the action of the Russian side unfortunately makes it necessary for us to prepare, as I have just outlined to you," he said on a one-day visit to the three Baltic states, all EU and NATO members whose proximity to former ruler Russia makes them nervous about the situation in Ukraine.
German Chancellor Angela Merkel has been at the forefront of a strategy of "engagement" with President Vladimir Putin since a tug-of-war between Russia and Europe over Ukraine deteriorated into their most tense stand-off since the Cold War.
EU leaders have so far taken largely symbolic action In response, such as suspending talks on visa deals. Merkel says tougher sanctions like travel restrictions and asset freezes could follow if Moscow does not take up her proposal of an "international contact group".
Its aim would be to facilitate communication between Moscow and the pro-EU government in Kiev in place since the pro-Russian president Viktor Yanukovich was ousted after bloody protests.
Russian forces have since taken over military installations across Crimea, home to the Russian Black Sea Fleet and Russian territory until Soviet leader Nikita Khrushchev gave it to Ukraine in 1954. The pro-Moscow assembly in Crimea has scheduled the referendum.
The EU is still seeking a diplomatic solution, Steinmeier said, "but so far we haven't succeeded and time is running out".
Asked if the next stage might include sanctions on arms between firms from EU/NATO states and Russia, Steinmeier said Germany - the world's third biggest arms exporter - had little such business with Moscow, but other countries had more.
"That will also have to be included if the current Crimea or Ukraine crisis turns into a permanent conflict between Russia and the European Union, or between Russia and NATO," said Steinmeier after talks with Estonian Foreign Minister Urmas Paet.
"If it remains an unresolved problem and Russia continues on this path, not just going ahead with the referendum but also integrating Crimea into Russian territory, then there will certainly be thoughts among NATO member states in that sense."
Paet said there was a "security risk for all Europe" rather than just countries close to the conflict zone like the Baltic states.
"It is outrageous that this kind of thing can happen in the 21st century," said Paet, adding that Moscow's intention was to use the referendum to incorporate Crimea into Russian territory.