EU extends sanctions against defiant Russia

The European Union (EU) extended damaging economic sanctions against Russia on Monday amid sharp differences over relations with Moscow which struck back with a furious tirade and its own import ban against Ukraine.

Russia said the decision showed the EU did not really want improved relations so as battle common threats such as terrorism.

"It is necessary to point out that instead of building constructive cooperation to counter the key challenges of our times such as international terrorism, the EU in Brussels prefers to continue its short-sighted game of sanctions," the Russian foreign ministry said in a statement.

The European Council of all 28 EU member states rolled over the economic sanctions because peace accords -- agreed by France, Germany, Ukraine and Russia at talks in the Belarusian capital Minsk -- would not be fully executed by year's end as required.

"Since the Minsk agreements will not be fully implemented by 31 December 2015, the duration of the sanctions has been prolonged whilst the Council continues its assessment of progress in implementation," it said in a statement.

EU officials say there can be no let up in sanctions until Russia ensures pro-Moscow rebels in eastern Ukraine stick to the Minsk deal.

Brussels meanwhile blamed Russia today for the failure of last-ditch talks meant to ease Moscow's fears about an EU free trade accord with Ukraine due to take effect on January 1.

"We were quite close to finding some solutions but today there was not enough flexibility from the Russian side," EU Trade Commissioner Cecilia Malmstroem said, describing 18 months of repeated efforts to meet Russia's demands.

The trade pact is part of a wider EU-Ukraine association agreement which sparked the overthrow of the pro-Moscow government in Kiev in early 2014.

Moscow claims it undermines its economic interests in Ukraine, a former Soviet-era satellite, and will allow a flood of cheap EU products into one of its key markets.

Russian Prime Minister Dmitry Medvedev said in Moscow: "Neither Ukraine nor the European Union are ready to sign a legally binding agreement which would take into account Russia's interests."

The EU sanctions decision was meant to have been a formality, with member country ambassadors supposed to approve the rollover in early December and thereby avoid debate at the leaders summit which took place last week in Brussels.

But it ended up delayed after several countries, especially Italy, raised questions about how the EU could both punish Russia over Ukraine yet still seek its help on key international issues, including the Syrian conflict.