Soldiers, believed to be Russian, are seen in the Crimean port city of Sevastopol in Ukraine. (File photo)
Germany said it assumes that Sunday's referendum in Crimea will be followed by steps to absorb the region into Russia and warned the EU will be forced to consider further, financial sanctions if Moscow does not change course.
Speaking to reporters on Thursday after meeting counterparts from central Europe in the Hungarian capital, German Foreign Minister Frank-Walter Steinmeier said Russia had so far rebuffed all European proposals to defuse the standoff in Crimea.
He said European states would draw up a list over the weekend of Russians who will be subject to visa restrictions and asset freezes as part of a second stage of measures against Russia already agreed within the European Union.
On another round of sanctions he said: "This is not anything we will want to see but if the situation continues in a way that we have seen it continue, and if we witness an interest of Russia that extends beyond Crimea and if Russia continues to refuse to cooperate in attempts to de-escalate the situation, there will be a third stage of measures to be considered."
A third stage is likely to involve financial sanctions on Russian firms and entities, as opposed to measures targeted at individuals.
Steinmeier said European Union countries did not want the third round of sanctions "at any price" but will be forced to consider them if Russia continued to reject efforts to de-escalate the situation.
"Sanctions are not an end in themselves... no one in Europe wants an economic war," Steinmeier said via an interpreter.
"Russia seems to have taken the decision to separate Crimea from Ukraine," he said. "The preparations are underway for a referendum on Sunday... We assume that this will be followed by steps to prepare the integration of Crimea into Russian territory."
© Thomson Reuters 2014