By David Mardiste and Andrius Sytas
TALLINN/VILNIUS (Reuters) - The European Union will start preparing further responses to Russia's actions in Ukraine if Moscow does not show signs of backing down by the weekend, Germany's foreign minister said on Tuesday, a warning echoed by the Polish prime minister.
Since the fall of Ukraine's president to pro-Western unrest, Russian forces have consolidated their hold on Ukraine's Crimea peninsula ahead of a Russian-backed referendum on the region's future on Sunday. The new government in Kiev and its Western backers have denounced the planned vote as illegal.
"If the weekend passes without a visible change in Russia's conduct then on Monday in the European (foreign affairs) council we will have to discuss a next stage of measures," German Foreign Minister Frank-Walter Steinmeier said during a visit to the Estonian capital Tallinn.
"We don't want confrontation but the action of the Russian side unfortunately makes it necessary for us to prepare, as I have just outlined to you," he said on a one-day swing through the three Baltic states, all EU and NATO members whose proximity to ex-ruler Russia makes them nervous about events in Ukraine.
Speaking in Warsaw, Polish Prime Minister Donald Tusk told reporters: "When it comes to sanctions on Russia, a decision has in fact already been made, especially on the procedure of introducing sanctions. The consequence of this will be the start of sanctions on Monday."
Poland has a special interest in Ukraine and has taken a tough line. They share a border and large parts of western Ukraine were Polish before World War Two. Polish foreign policy is driven by a fear of Russia, its former overlord, pushing west into Ukraine and then threatening Poland's own borders.
German Chancellor Angela Merkel has been at the forefront of a strategy of "engagement" with Russian President Vladimir Putin since a tug-of-war between Russia and Europe over Ukraine deteriorated into their most tense stand-off since the Cold War.
Participants at a meeting of Merkel's Christian Democrats on Tuesday said she had told them she is prepared to accept negative consequences of sanctions against Russia. "Events on the Crimea amount to an annexation and Russia cannot be allowed to do this," the chancellor said with emotion, though she added the EU must keep talking with Russia, the sources said.
EU leaders have so far taken largely symbolic action against Moscow in response, such as suspending talks on visa deals. Merkel says tougher sanctions like travel restrictions and asset freezes could follow if Moscow does not take up her proposal of an "international contact group".
Its aim would be to facilitate communication between Moscow and the pro-EU government in Kiev in place since the pro-Russian president Viktor Yanukovich was ousted after bloody protests.
Russian forces have since taken over military installations across Crimea, which is home to the Russian Black Sea Fleet and was Russian territory until Soviet leader Nikita Khrushchev gave it to Ukraine in 1954.
The EU is still seeking a diplomatic solution, Steinmeier said, "but so far we haven't succeeded and time is running out".
Asked if the next stage might include sanctions on arms between firms from EU/NATO states and Russia, Steinmeier said Germany - the world's third biggest arms exporter - had little such business with Moscow, but other countries had more.
"That will also have to be included if the current Crimea or Ukraine crisis turns into a permanent conflict between Russia and the European Union, or between Russia and NATO," he said.
"If it remains an unresolved problem and Russia continues on this path, not just going ahead with the referendum but also integrating Crimea into Russian territory, then there will certainly be thoughts among NATO member states in that sense."
(Reporting by David Mardiste; Writing by Stephen Brown in Berlin; Editing by Madeline Chambers and Mark Heinrich)