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EU toughens Russia sanctions over Ukraine

(BRUSSELS) - European Union leaders agreed to tighten sanctions against Moscow over the Ukraine crisis on Wednesday, including moving to punish Russian firms that back actions to undermine Kiev.

The measures, announced moments after Washington beefed up its own sanctions, will target both individuals and firms providing material or financial support to efforts to undermine Ukraine's sovereignty as well as to those responsible for the annexation of Crimea or the destabilisation of eastern Ukraine.

The 28 leaders, meeting at a summit to discuss the crisis and to fill top EU jobs, also agreed to suspend new investments in Russia by the EU's European Investment Bank (EIB) and European Bank of Reconstruction and Development (EBRD).

The measures, which fall short of the new US measures that hit Russian energy groups, potentially broadens the scope to companies closely connected to the Kremlin, a move that many member states with strong economic ties to Russia had resisted.

Up until now, the EU had imposed visa bans and asset freezes against 72 Russians and Ukrainians, refusing to target private or public firms.

There were divisions over whether to adopt the hard line advocated by the US, with some member states, such as Italy and Germany, wary of putting their economic ties with Moscow in jeopardy.

In recent weeks, Germany and France spearheaded EU efforts to revive a Ukrainian truce in the hope more sanctions against Russia could be avoided.

In a statement agreed at the summit, the leaders urged Russia "to actively use its influence over the illegally armed groups and to stop the flow of weapons and militants across the border, in order to achieve a rapid de-escalation."

German Chancellor Angela Merkel said earlier Moscow had failed to meet EU demands that it cut supplies and support for pro-Kremlin rebels there.

The names of the individuals and firms targeted by the new sanctions will be listed by end-July, the statement said.

The Luxembourg-based EIB has accorded about 1.6 billion euros ($2.2 billion) in loans to Russia since 2003. The London-based EBRD has backed 790 projects in Russia since the end of the Cold War, amounting to 24 billion euros.

The EU also agreed to lift restrictions, imposed in February, on the export by member states to Ukraine of helmets and bullet proof vests.

European Council conclusions on external relations (Ukraine and Gaza)

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