File Photo: Russian President Vladimir Putin (Reuters)
European Union leaders on Tuesday threatened new sanctions against Russia over a bloody offensive by pro-Kremlin Ukrainian rebels, backing, the latest bid to pressure a defiant Russian President Vladimir Putin.
The decision came a day after Standard and Poor's downgraded Russia's foreign currency rating to junk because of its eroding economic health, weakened by a wave of Western financial restrictions last year and the plunging price of its oil exports.
The downgrade put still more pressure on Russia's depreciating ruble.
But the Western moves so far appear to have done little to change Putin's approach to the conflict in Ukraine or dent his massive approval ratings at home.
With the death toll climbing in Ukraine's separatist east and rebels refusing to return to the negotiating table, the 28 EU leaders tasked their foreign ministers with considering tough new measures when they meet on the crisis on Thursday.
Their rare joint statement voiced concern over what they said was Russian support for the rebels, who have made recent gains and are suspected of targeting the strategic port city of Mariupol in a weekend rocket attack that killed 30 people.
"We condemn the killing of civilians during the indiscriminate shelling of the Ukrainian city of Mariupol on 24 January 2015," they said.
"We note evidence of continued and growing support given to the separatists by Russia, which underlines Russia's responsibility."
EU leaders would review the situation at their next summit in Brussels on February 12, the statement added.
Under Brussels rules the foreign ministers will task the European Commission, the bloc's executive arm, with drawing up new sanctions, which would then have to unanimously be approved by the leaders.
The debate over new sanctions could test Western nations' unity in the Ukraine conflict and raise questions over how far they are willing to go to support Kiev.
Backing for existing economic measures against Moscow was previously seen as weakening among European countries that rely on Russia for trade.
The attack on Mariupol and the rebel advance have however led to mounting concern over the situation in Ukraine, with both Brussels and Washington issuing strong condemnations and threatening repercussions for Moscow.
US President Barack Obama has said he would look at all options - short of military intervention - to restrain Putin's alleged campaign to cripple Ukraine's pro-Western leadership by stripping away the country's vital eastern industrial base.
But even with its economy hard hit by sanctions and low oil prices, Russia has refused to blink.
Responding to suggestions that new sanctions could include cutting off Russia from the SWIFT international banking system, Russian Prime Minister Dmitry Medvedev said Moscow would hit back strongly at such a move.