Ukraine declares state of emergency as EU leaders to hold emergency summit tomorrow

THE EU will hold an emergency summit tomorrow after Ukraine declared a state of emergency in the face of Russian aggression.

The nationwide state of emergency comes after Russia recognised the independence of two separatist-controlled territories in the east of the country as the Kremlin said it was deploying troops there.

Russian President Vladimir Putin on Monday recognised the independence of two separatist enclaves in the Donbass region of eastern Ukraine that adjoin Russia, deepening Western fears of a major war in Europe.

The measure, which does not include the crisis-hit Donetsk and Luhansk regions, would last for 30 days but can be extended.

Earlier, Vladimir Putin claimed Moscow was ready to look for “diplomatic solutions” in the ongoing Ukraine crisis.

Meanwhile, tomorrow’s emergency meeting of EU leaders comes after a first, limited round of sanctions was approved.

The EU sanctions include blacklisting more politicians and banning trade between the EU and the two breakaway regions.

"It is important that we continue to be united and determined and jointly define our collective approach and actions," EU Council chief Charles Michel said in a letter inviting EU leaders to Brussels.

He said a special European Council meeting would be held on Thursday from 7pm.

Mr Michel said the agenda of the meeting would include discussing "how we protect the rules-based international order; how we deal with Russia notably holding Russia accountable for its actions; how we will further support Ukraine and its people."

The impact of the first round of sanctions is likely to be limited, as Western governments are for now preferring to keep the much larger sanctions packages that they have planned in reserve should the crisis escalate.

The United States and its allies sought to step up sanctions pressure on Russia on Wednesday over the deployment of troops in separatist regions of eastern Ukraine, in one of the worst security crises in Europe in decades.

The Ukrainian military said one soldier had been killed and six wounded in increased shelling by pro-Russian separatists using heavy artillery, mortar bombs and Grad rocket systems in the two breakaway regions over the previous 24 hours.

Russian President Vladimir Putin has massed more than 150,000 troops near Ukraine's borders, according to U.S. estimates, and signed a decree on the deployment of troops in the breakaway Donetsk and Luhansk enclaves to "keep the peace" - a justification the United States says is "nonsense".

Putin’s move to recognise the separatist enclaves in the Donbass region has deepened Western fears of a major war in Europe by raising the prospect of a full-scale invasion beyond the breakaway areas.

The United States, the European Union, Britain, Australia, Canada and Japan responded with plans to target banks and elites while Germany froze a major gas pipeline project from Russia.

The flow of “Russian money through the IFSC” in Dublin will be targeted and interrupted by a sanctions package on Russia which the EU will sign off on tomorrow, Foreign Minister Simon Coveney has said.

Joe Biden has also warned that President Putin had begun to invade Ukraine and was preparing to advance further into the country, potentially bringing “untold suffering to millions of people” in an all-out war.

The US president said: “This is the beginning of a Russian invasion of Ukraine. He’s setting up a rationale to go much further.”

Mr Biden announced plans to sanction Russian banks and oligarchs, and to “cut off” the Russian government from Western financing.

British Foreign Secretary Liz Truss, announcing more measures on Wednesday, said Britain would stop Russia selling sovereign debt in London.

"We've been very clear that we're going to limit Russian access to British markets," Truss told Sky. "We're going to stop the Russian government with raising sovereign debt in the United Kingdom."

Britain on Tuesday announced sanctions on three billionaires with close links to Putin, and five small lenders including Promsvyazbank.

But, like other U.S. allies, it has said more sanctions would come if Russia launched a full invasion of its neighbour.

"There will be even more tough sanctions on key oligarchs, on key organisations in Russia, limiting Russia's access to the financial markets, if there is a full scale invasion of Ukraine," Truss said.

Russian Foreign Minister Sergei Lavrov brushed off the threat of sanctions no Tuesday.

"Our European, American, British colleagues will not stop and will not calm down until they have exhausted all their possibilities for the so-called punishment of Russia," he said.

China said it never thought sanctions were the best way to solve problems, a foreign ministry spokeswoman said. She called for "dialogue and consultation".

Moscow is calling for security guarantees, including a promise that Ukraine will never join NATO, while the United States and its allies offer Putin confidence-building and arms control steps to defuse the stand-off.

Satellite imagery over the past 24 hours shows several new troop and equipment deployments in western Russia and more than 100 vehicles at a small airfield in southern Belarus, which borders Ukraine, according to U.S. firm Maxar.

Ukraine has started conscripting reservists aged 18-60 following a decree by President Volodymyr Zelenskiy, the armed forces said.

U.S. Secretary of State Antony Blinken and French Foreign Minister Jean-Yves Le Drian cancelled separate scheduled meetings with Lavrov on Tuesday as weeks of frantic diplomacy failed to end the crisis.

Plans announced by U.S. President Joe Biden to bolster Estonia, Latvia and Lithuania include sending 800 infantry soldiers and up to eight F-35 fighter jets to locations along NATO's eastern flank, a U.S. official said, but are a redistribution, not additions.

Putin did not watch Biden's speech and Russia will first look at what the United States has outlined before responding, according to Kremlin spokesperson Dmitry Peskov, cited by Russian news agencies.

Putin said he was always open to finding diplomatic solutions but that "the interests of Russia and the security of our citizens are unconditional for us."

Germany said on Tuesday it was halting the $11 billion Nord Stream 2 pipeline owned by Russian state-owned gas giant Gazprom , a move likely to raise gas prices in Europe.

Built and awaiting German approval, the pipeline had been set to ease the pressure on European consumers facing record energy prices but critics including the United States have long argued it would increase Europe's energy dependence on Russia.

German Economy Minister Robert Habeck warned that gas prices in Europe were likely to rise in the short term. Dmitry Medvedev, Russia's former president and now deputy chairman of its Security Council, suggested prices could double.

The Kremlin said it hoped the Nord Stream delay was temporary and Putin said Russia "aims to continue uninterrupted supplies" of energy to the world.

U.S. sanctions target Russian elites and two state-owned banks, excluding them from the U.S. banking system, banning them from trading with Americans, and freezing their U.S. assets. They also seek to deny the Russian government access to Western financing.