The European Union is preparing to implement sanctions on Russia, such as imposing travel bans and freezing assets.

"I can confirm that the preparatory work has started," the EU's external action service Maja Kocijancic said on Monday. The fresh sanctions could be formally approved at a summit of EU foreign ministers on March 17.

They would mark the second stage in the European Union's three-step response agreed at a summit last week. EU leaders had agreed to a three-stage process of increasing pressure on Russia over its incursion in Crimea, beginning with the suspension of visa talks and negotiations over a new investment agreement.

The third step would likely involve an arms embargo and trade restrictions.

But Moscow insists it has no control over the Russian-speaking units that have seized the peninsula.

NATO flexing its muscles

NATO said Monday it would deploy AWACS (Airborne Warning and Control System) reconnaissance aircraft to overfly Poland and Romania as part of alliance efforts to monitor the crisis in Ukraine.

The planes, many of which have their home base in Geilenkirchen, Germany, will come in addition to a recently increased number of NATO F-15 fighter jets patrolling the air over the Baltic States.

On Tuesday, German Foreign Minister Frank-Walter Steinmeier is set to visit the three Baltic European Union member states of Estonia, Latvia and Lithuania for talks on the Crimean crisis.

The United States and Europe are trying to force Moscow to engage in bilateral talks, which it so far refuses to do.

US Secretary of State John Kerry reportedly turned down an invitation to meet his Russian counterpart until Moscow agrees to direct talks with Kyiv's interim leadership.

German Chancellor Angela Merkel also reiterated calls for Russia to join such talks sponsored by an international contact group. She is scheduled to address the Bundestag parliament in Berlin about the crisis on Thursday.

Later on Monday, the World Bank said it's ready to offer $3 billion (4.2 billion euros) to aid in Ukraine this year to help with economic reform and development. The Washington-based agency said it had received a request from Kyiv's new interim leadership and was "committed to supporting the people of Ukraine in these difficult times and hope that the situation in the country stabilizes soon."

"We are moving forward with our pipeline of projects and aim to support the government to undertake the reforms badly needed to put the economy on a path to sustainability," said Bank president Jim Yong Kim.

Escalation on the ground

The situation is threatening to escalate as Crimea is set to vote in a referendum on March 16 to secede from Ukraine and become part of Russia.

Crimea has a large Russian-speaking population and Russia's Black Sea fleet, Meanwhile protests of pro-Russian and pro-Western supporters are continuing in Ukraine.

The EU is meanwhile preparing an upgrade of Ukraine's economic relations with the EU.

On Tuesday, the European Commission is expected to approve measures that would allow Ukraine freer export access to Europe's single market, which would bring benefits of nearly 500 million euros a year to the impoverished economy.

A fully fledged free-trade agreement between, however, can only be discussed after Ukraine has held presidential elections and appointed a new, permanent government in May.

rg/dr (AFP, dpa, Reuters)