German Chancellor Angela Merkel on Thursday said that the Group of Eight is essentially dead while the diplomatic standoff with Russia persists, and the Ukrainian ambassador to the UN in Geneva warned that Russia could be planning further expansion in Ukraine.
Ambassador Yurii Klymenko told UN diplomats that "there are indications that Russia is on its way to unleash a full blown military intervention in Ukraine's east and south."
A Russian diplomat in Geneva refuted Klymenko's statement, however, saying that Russia would never invade east and south Ukraine, Reuters reported.
Russia's State Duma is set to meet Thursday to approve a treaty to annex the Crimea region.
Merkel appeared before the German parliament to warn Moscow that it faces increased sanctions and expulsion from the G8 in response to its actions in Ukraine.
"The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase-3 measures if there is a worsening of the situation," Merkel said, before offering a bleak assessment of the G8's ability to fulfill its role.
"As long as there is no political climate for an important format such as the G8, as is the case at the moment, the G8 no longer exists, neither does the summit nor the format as such," she added.
Russia has not been formally booted out of the G8, but the other members have all pulled out of preparations for a summit planned for Sochi in June. The G7 will meet in The Hague next week without Russia to discuss the next step in their coordinated response to Moscow's behavior, Reuters reported.
Germany, which is Russia's largest eurozone trading partner, has canceled a number of business deals with Moscow.
On Wednesday the German government prohibited defense contractor Rheinmetall from delivering combat simulation gear to the Russian military.
France, which is supposed to deliver the first of two Mistral class assault carriers to the Russian Navy this year, said that it was considering suspending the contracts as part of the EU's phase-3 sanctions if Russia did not change its course.
Deputy Prime Minister Dmitry Rogozin said that France should either honor the contract that the two nations signed in 2011, or return Russia's money, RIA Novosti reported.
European Energy Commissioner Guenther Oettinger hinted at the type of sanctions that might be discussed next week.
"We have products that Russia needs — machines, equipment, hardware, software, vehicles," he said on German television.
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