German Chancellor Angela Merkel told President Vladimir Putin that Russia had not done enough to implement the Geneva accord and that further sanctions against Russia must be contemplated.
At a news conference in Berlin with Poland's Prime Minister Donald Tusk, Merkel said Friday Russia has the means to convince the pro-Russian separatists in Ukraine to take a peaceful route.
"I spoke to the Russian president this morning and made clear again that on the one hand Ukraine has taken a whole series of steps to implement the Geneva accord but on the other side I see no Russian backing for the accord which would of course have an effect on the separatists in Ukraine," she said.
"Russia has the power, or could have the power, to bring the separatists on to a peaceful path of discussions about the constitution and preparations for elections, but such signals are unfortunately lacking."
Merkel added: "We will therefore have to react. This will be a joint European action and an action by the G7...because of the lack of progress we will have to contemplate further sanctions within the second stage of sanctions."