WRAPUP 5-U.S., EU to work together on tougher Russia sanctions

Wed Mar 26, 2014 6:04pm EDT
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(Adds IMF deal to be announced on Thursday)

* Obama, EU agree to work on tougher sanctions, energy independence

* Ukraine to raise domestic gas price 50 pct for IMF loan

* World Bank: Russia economy could contract by 1.8 pct

* Even if Crimea crisis short-lived, growth would be halved

By Jeff Mason and Lidia Kelly

BRUSSELS/MOSCOW, March 26 (Reuters) - The United States and the European Union agreed on Wednesday to work together to prepare possible tougher economic sanctions in response to Russia's behaviour in Ukraine, including on the energy sector, and to make Europe less dependent on Russian gas.

U.S. President Barack Obama said after a summit with top EU officials that Russian President Vladimir Putin had miscalculated if he thought he could divide the West or count on its indifference over his annexation of Crimea.

Leaders of the Group of Seven major industrial powers decided this week to hold off on sanctions targeting Moscow's economy unless Putin took further action to destabilise Ukraine or other former Soviet republics.   Continued...