Europe issues cautious warning to Russia

European Union leaders warned last night that Russia faced "isolation" unless Moscow made a "fundamental choice" to back down from its confrontational position in the Caucasus.

After an emergency summit in Brussels, EU leaders said relations with Russia had come to a "crossroads". Future economic and political ties "may" depend on Moscow's willingness to remove troops from undisputed Georgian soil and implement an EU-brokered six-point peace plan.

Although no direct sanctions against Moscow were discussed, Britain persuaded its EU partners to postpone talks with Russia later this month on a new economic partnership agreement.

A high-level EU delegation – including the French President Nicolas Sarkozy, and the European Commission president, Jose-Manuel Barroso – will travel to Moscow and Tbilisi next Monday to try to persuade the Russians to reconsider. The German Chancellor, Angela Merkel, said last night the Russian President, Dmitry Medvedev, had "signalled" to M. Sarkozy that Russia was prepared to pull back its troops. However, this promise has been made several times before. M. Sarkozy, EU Council president until the end of the year, said that the Brussels meeting was not intended as a threat to Russia but as proof that the EU was "entirely united" in defence of its values and international law. "We cannot go back to the age of spheres of influence in Europe," he said after the summit. "Yalta [the conference which divided Europe in 1945] is dead."

The emergency Brussels summit also brushed aside a blunt warning from the Russian Foreign Minister that the EU should not strengthen its ties with Georgia. EU leaders promised to bolster economic and political links with Tbilisi, including the creation of a free trade area – implying that Georgia might one day be eligible for EU membership.

The summit conclusions were rhetorically strong, condemning the "disproportionate reaction" of Russia in the South Ossetia crisis and dismissing as "unacceptable" Moscow's decision to recognise the independence of two breakaway regions of Georgia.

As expected, no specific sanctions or punishments were even discussed, at the insistence of a conciliatory group of EU states, including Germany, France, Italy and Finland. However, at the suggestion of the Prime Minister, Gordon Brown, the summit declaration was beefed up to include a "pause" in negotiations with Moscow on a new EU-Russia partnership agreement on trade and investment.

The summit was as much at pains to avoid a public European split as to take measured action against Russia. A hawkish group, led by Britain and former Soviet-bloc countries, had already accepted that there was no point in pushing for specific sanctions or even firm threats of sanctions. They made some progress, however, in toughening up the summit declaration drafted by France, as EU council president.

The conciliatory faction argued direct measures against Moscow could provoke more painful counter-sanctions, including the suspension of gas or oil supplies to central and western Europe. Ultimately, they said, the EU might lack "hard" economic or military power but could bring Russia into line with the "soft power" of the attractions of European free trade, investment and technology.

Alexander Stubb, the Finnish Foreign Minister, also chairman of the East-West security body, the OSCE, said: "There has been too much testosterone flying around. It's time now for everyone to calm down. Otherwise, the consequences could be grave, for everyone, including Russia ..."