An armed pro-Russian separatist holds leaflets about a referendum outside an administrative building in the eastern Ukrainian city of Lugansk May 10, 2014. Photo: Reuters

Germany and France are ready to agree more extensive sanctions against Russia if a planned presidential election in Ukraine on May 25 is foiled, Chancellor Angela Merkel and President François Hollande said yesterday.

In a joint statement, they agreed to support tougher sanctions against Russia – affecting areas such as energy, defence, financial services and engineering – than EU leaders outlined at a meeting in Brussels on March 6.

“We would be ready to take further sanctions against Russia if the May 25 elections in Ukraine fail,” Merkel said at a joint news conference with Hollande in the Baltic port of Stralsund, although sanctions would not be “an end in themselves”.

Germany, which relies on Russia for 40 per cent of its natural gas supplies, has been seen as hesitant to ratchet up and broaden sanctions, which are opposed by most Germans.

Stern magazine reported German growth could be cut by 0.9 percentage points this year if tougher sanctions are imposed.

The May 25 election is to choose a successor to President Viktor Yanukovych, the pro-Russian president of Ukraine toppled by unrelenting protests. Russia then seized and annexed Ukraine’s Russian-majority Crimea region, citing threats from what it called far-right extremists in the new Kiev government.

Western countries responded by imposing limited sanctions against Moscow targeting some Russian political and business leaders and interests seen as involved in the Ukraine crisis.

But pro-Russian separatists have since stirred turmoil in eastern Ukraine, declaring autonomous republics in what the West sees as an attempt by Moscow to cement Russian domination there, much as occurred in Crimea, and thwart a nationwide election.

Merkel and Hollande called on Russian President Vladimir Putin to personally intervene to ensure that the election takes place across the whole of Ukraine. Merkel said Putin had taken encouraging steps by appealing to pro-Russian militants to suspend a planned autonomy referendum today. “But the Russian President has to send more signals of de-escalation,” Merkel said. Hollande added that he and Merkel were both doing all they could to impress on Putin what is at stake now in Ukraine.