The European Union is readying further sanctions against Russia over its annexation of the Crimean peninsula.
German Chancellor Angela Merkel told her nation's parliament Thursday the EU is prepared to move to "Level 3" measures, which would include economic sanctions, if the situation worsens.
The EU has already imposed travel bans and asset freezes on Russian officials deemed responsible for the incursion into Crimea.
On Wednesday, Moscow signed a treaty with local authorities making Crimea part of Russia. The majority-Russian region voted to break away from Ukraine and join Russia in a referendum Sunday that the U.S. and European Union have declared illegal.
Chancellor Merkel said the Group of Eight forum of leading economies is effectively suspended as long as the diplomatic standoff with Russia continues. Russia is part of the G8, along with Britain, Canada, France, Germany, Italy, Japan and the United States.
In a continuation of efforts to end the crisis, United Nations Secretary-General Ban Ki-moon is meeting Russian President Vladimir Putin and Russian Foreign Minister Sergei Lavrov in Moscow Thursday. On Friday, he will meet in Kyiv with Ukrainian President Turchynov and Prime Minister Arseniy Yatsenyuk.