BERLIN — The Group of Seven nations are preparing new measures against Russia, German Chancellor Angela Merkel said Friday, after Secretary of State John Kerry accused Russia of trying to impose its will at “the barrel of a gun.”

President Barack Obama discussed deepening sanctions against Russia with Merkel and leaders from France, Britain and Italy in a conference call Friday, a day after Kerry said Russia is running out of time to ease tensions in Ukraine. They spoke after Russia began new military exercises on its neighbor’s border and explosions in two Ukrainian cities wounded eight people.

U.S. and European officials said Russia hasn’t fulfilled its part of an April 17 accord signed in Geneva aimed at calming the crisis. The conflict — the biggest between Russia and its former Cold War enemies since the collapse of the Soviet Union — escalated Thursday when Russian President Vladimir Putin warned Ukraine against continuing an anti-separatist offensive that killed five rebels.

“Russia has or would have the possibility, I’m deeply convinced, to guide separatists in Ukraine onto a peaceful path,” Merkel said alongside Polish Prime Minister Donald Tusk in Berlin Friday. “Such signals have failed to emerge so far, unfortunately. Secondly, we will therefore have to act and I think it will be a joint European action and a joint action by the G-7 states.”

During the conference call between Merkel, Obama, British Prime Minister David Cameron, French President Francois Hollande and Italian Prime Minister Matteo Renzi, the leaders condemned “the absence of any efforts on the part of Russia to support the implementation of the Geneva agreement,” Cameron’s office said in a statement.

“The five leaders agreed that in the light of Russia’s refusal to support the process, an extension of the current targeted sanctions would need to be implemented, in conjunction with other G-7 leaders and with European partners,” it said.


EU foreign ministers agreed in principle to expand a “stage two” blacklist on April 14, possibly targeting Russian companies alongside government officials and military officers. So far, the bloc has slapped asset freezes and travel bans on 55 Russians and Ukrainians.

“Stage three” sanctions — EU code for sweeping economic measures — are more controversial within the 28-nation bloc and would need to be decided by the bloc’s leaders.

John Baird, the foreign minister of G-7 member Canada, said “there is no doubt” that sanctions were having an effect on Russia through depreciation in the ruble and market instability, even as Putin has argued the impact is limited.

“The message that Russia is sending that they are not having any effect — really that’s a call for us to go further, which we would certainly support,” Baird said during a visit to Latvia Friday.

There will be no new sanctions announced Friday, according to two U.S. officials who spoke on condition of not being named because they were not authorized to discuss internal deliberations. The situation may change as early as the start of next week, they said.

In the wake of capital flight and a Russian credit rating downgrade today by Standard & Poor’s, the country’s central bank unexpectedly raised its key interest rate to 7.5 percent, from 7 percent. All but one of 23 economists in a Bloomberg survey had forecast no change.


The ruble has lost almost 9 percent this year against the dollar, the second-worst performance among 24 emerging currencies tracked by Bloomberg after Argentina’s peso.

Russia’s Micex Index of stocks fell for a fifth day after S&P lowered Russia’s sovereign rating to BBB-, the lowest investment grade, from BBB. It fell 1.6 percent in Moscow, taking its decline to 15 percent this year.

Ukrainian Prime Minister Arseniy Yatsenyuk accused Russia of seeking to disrupt the presidential election, remove the pro- European government in Kiev and seize Ukrainian territory.

“All those plans will fail,” Yatsenyuk told a Cabinet meeting in Kiev Friday. “Russian military aggression on Ukrainian territory will lead to a military conflict all across Europe. The world has not yet forgotten World War II, while Russia wants already to start World War III.”

A meeting of the Eastern Partnership initiative attended by ex-Soviet republics Ukraine, Moldova, Armenia, Azerbaijan and Georgia in Prague “recommended” Russia withdraw what North Atlantic Treaty Organization officials estimate are as many as 40,000 troops from Ukraine’s border.

“We are facing the most serious crisis since 1945,” Stefan Fule, EU enlargement commissioner, said at the meeting. “Ukraine, its citizens and their freedoms cannot become victims of political games. That doesn’t belong to the politics of the 21st century.”


Russia has more than tripled the number of helicopters at a base close to the Latvian border to about 100, Latvian Foreign Minister Edgars Rinkevics said Friday. NATO has responded by providing a reassurance package for region, signaling the Baltic states are part of military alliance.

Kerry said Thursday that Russia was engaging in a “full- throated effort” to sabotage Ukraine’s democratic process through “gross external intimidation” in which military and intelligence operatives were providing personnel, weapons, money and planning to destabilize its neighbor.

Russian Foreign Minister Sergei Lavrov accused the United States of making “unilateral” demands on the government in Moscow to disarm the separatist militias. In comments on Russian state television Friday, he said pro-Russian leaders in the east would be ready to abide by the deal if the Ukrainian government moved to clear Kiev’s Independence Square of its supporters and disarmed the nationalist Pravyi Sektor group.

Ukraine’s defense minister, Mykhaylo Koval, said the Russian army, conducting exercises, came close to the frontier Thursday without crossing it. Ukraine’s army is “fully ready to fight any aggression,” he told reporters in Kiev Friday.

Koval described the offensive against separatists in the eastern city of Slovyansk, where the five rebels died Thursday, as “a surgical operation,” saying that the security forces are aiming to “liquidate separatists and protect the lives of peaceful citizens at the same time.”

Acting Ukrainian President Oleksandr Turchynov’s chief of staff, Serhiy Pashynsky, said troops had begun a “second phase” of the operation, putting in a complete blockade of Slovyansk to prevent the arrival of rebel reinforcements, according to a statement on the presidential website.


One member of the government forces has died and nine have been wounded since the operation started last week, according to the official in charge of Ukraine’s anti-terrorist center, Vasyl Krutov. A helicopter pilot was injured when his aircraft came under fire today, setting the fuel tank alight, he said.

Police in the southern Ukrainian city of Odessa are also investigating an explosion that injured seven people this morning as a terrorist attack, Interfax reported, citing police chief Petro Lutsyk.

Russia has 200 tanks and Grad artillery systems on the border, Ukraine’s permanent representative to the United Nations, Yuriy Sergeyev, told the Voice of America.

Donahue reported from Berlin, Meyer from Moscow. Contributors: Daria Marchak and Volodymyr Verbyany in Kiev, Anna Andrianova, Jason Corcoran, Irina Reznik and Ksenia Galouchko in Moscow, Dakin Campbell in New York, Margaret Talev and Phil Mattingly in Seoul, Jones Hayden in Brussels, Joi Preciphs and Terry Atlas in Washington and Peter Laca in Prague.

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