Ukraine Crisis
Local residents walk past a crater caused by shelling in the village of Spartak, on the outskirts of Donetsk, September 1, 2014. Reuters

The threat of new sanctions on Russia seems to have no effect on President Vladimir Putin as he urged the European Union on Monday to show more "common sense" and not engage in mutually destructive sanctions.

Putin reasoned that there is scope to work together with EU, and Russia will never cause any harm to it by poking at one another. Putin's reaction was widely quoted by Russian news agencies, which covered his visit to the eastern Siberian city of Yakutsk.

Ukraine Forces on the Run

The Russian presence in eastern Ukraine soil had its toll on the official Ukraine forces. The recharged rebels were able to make the government forces flee with signs of panic engulfing them. For the first time, the government forces lost control of the airport at Luhansk, which was being defended against the separatists for many months.

Sensing a blood bath, Kiev ordered its army to back out from the key eastern airport after a ferocious assault from separatists backed by the Russian army tank column, was about to begin.

The rebels also targeted the sea. It attacked Ukraine's naval forces. The rebel attack on a sea patrol in Mariupol had two Ukrainian seamen missing when the rebels ambushed a patrol boat in the Asov Sea.

EU Deadline

Meanwhile, the European Union leaders continued to wield the stick of sanctions against Russia, if it does not reverse the course in Ukraine. The posturing have heightened concerns that the confrontation would overwhelm the whole of Europe.

Russia also made it known that it will resort to countermeasures to thwart any Western sanctions, after having banned most EU and US food imports.

Sergei Lavrov, foreign minister of Russia, said Russia has no intention to slam the door on Western trade or to exit the World Trade Organisation.

Putin For Statehood

In a marked change of tone, President Putin asked Kiev to start meaningful discussions on "statehood" for the south-east regions of Ukraine.

In an interview aired by the Russian state television, the President said talks between Ukrainian authorities and separatist leaders in the east have to go beyond technical things and cover the political organisation of the society and statehood for south-eastern Ukraine.

Observers see this change as tactical to rule out any Crimea like annexation of Eastern Ukraine by Russia, at the same time, send a clear message that nothing short of an autonomous state can solve the grievances of eastern rebels.