"We have relations with Russia that are in our mutual interests," said the Chancellor. But the action taken in Ukraine and over Crimea demand a response.

She made it quite clear that the planned referendum on the future status of Crimea is contrary to the Ukrainian Constitution. The announcement has further aggravated an already tense situation.

European Union responds to Crimean crisis

The latest events once again influenced the conclusions of the 28 heads of state and government, said Angela Merkel. The EU’s first step is to suspend negotiations on visa liberalisation and on the New Agreement between the European Union and Russia.

Call for a contact group to be set up

The Chancellor underlined the importance of a contact or coordination group, which would deal with questions of territorial integrity, minorities and the preparations for elections.

The European Union would play an important part in this contact group "We expressly confirm our commitment to this group and we want to see a coordination or contact group of this sort put in place. The outcome of talks so far does not yet make this possible, though," said the Chancellor.

European Union’s three-step approach

Angela Merkel then laid out the further steps agreed by the EU heads of state and government as response: should no contact group be established, or should a contact group fail to achieve results, the EU would, as a second step, reserve the right to restrict the travel of certain individuals and freeze the assets held by this group. This would happen in close consultation with the United States of America.

Should there be any further destabilisation of the situation in Crimea, or should military action ensue, the third step would "lead to severe and far reaching consequences for relations between the European Union and the Russian Federation," added Angela Merkel. She did, however, stress, "I hope it will not come to that".

The EU would still like to see a diplomatic process, and is gearing all efforts to achieving this.

Financial support and Association Agreement

Angela Merkel also pledged Ukraine the financial and political support of the European Union. It is very important to ensure that material assistance reach Ukraine swiftly.

Initially 610 million euros can be provided at short notice. A further sum of one billion euros can then be made available on the basis of a European Council decision.

The political chapters of the Association Agreement with Ukraine can also be signed very rapidly, said the Chancellor. This would be a sign of friendship and solidarity with the Ukrainian people.

European Council President Herman Van Rompuy called the extraordinary meeting of EU heads of state or government on 6 March in Brussels in response to the current situation in Ukraine. The President of the European Commission, José Manuel Barroso, and the High Representative of the Union for Foreign Affairs and Security Policy, Lady Catherine Ashton, also attended. The heads of state and government had the opportunity to meet the Ukrainian Prime Minister Arseniy Yatsenyuk.