Russia faces further sanctions from the European Union on Thursday over its annexation of the Crimea Peninsula as tensions in the region remained high despite the release of a Ukrainian Naval commander.

In an address to the German Parliament, Chancellor Angela Merkel said the E.U. was readying further sanctions and that the G-8 forum of leading economies had been suspended indefinitely. Russia holds the presidency of the G-8 and President Vladimir Putin was due to host his counterparts, including President Barack Obama, at a summit in Sochi in June.

“So long as there aren’t the political circumstances, like now, for an important format like the G-8, then there is no G-8,” Ms. Merkel said. “Neither the summit, nor the format.”

Earlier this week, the E.U. and the United States slapped sanctions on certain individuals that were involved in what they say was the unlawful referendum in Crimea over joining Russia.

Ms. Merkel said E.U. leaders would increase those “Level 2” sanctions against Russia when they meet later Thursday in Brussels to widen the list of those whose assets are being frozen and who are banned from travelling.

She also reiterated that if things worsen, the E.U. is prepared to move to “Level 3” measures, which would include economic sanctions.

“The European Council will make it clear today and tomorrow that with a further deterioration of the situation we are always prepared to take Level 3 measures, and those will without a doubt include economic sanctions,” she said.

Ms. Merkel’s tough approach came as the commander of Ukraine’s navy was freed after being held by Russian forces and local Crimean militia at the navy’s headquarters.

Rear Adm. Sergei Haiduk and an unspecified number of civilians were held for hours after the Navy’s base in Sevastopol was stormed on Wednesday. Early reports said the storming was conducted by a self-described local defence force, but Thursday’s statement by President Oleksandr Turchynov, which confirmed the release, said Russian forces were involved.

The storming came hours before Ukraine announced plans to withdraw troops from Crimea, which was formally annexed by Russia this week.

Russian forces took control of Crimea some two weeks ago in the wake of the ouster of Ukraine’s pro-Russia president Viktor Yanukovych after months of protests and sporadic violence. Mr. Yanukovych fled to Russia.

Crimea, a majority ethnic-Russian region, then organized a referendum that overwhelmingly called for becoming part of Russia. The Black Sea peninsula had been part of Russia for centuries until 1954 when Soviet leader Nikita Khrushchev transferred it to Ukraine.

Attempting to face down the unblinking incursion, Ukraine on Wednesday said it would hold joint military exercises with the United States and Britain.

Just how many retreating troops Ukraine will have to absorb in what amounts to a military surrender of Crimea was unclear. Many servicemen have already switched sides to Russia, but authorities said they were prepared to relocate as many as 25,000 soldiers and their families to the Ukrainian mainland.

With thousands of Ukrainian soldiers and sailors trapped on military bases, surrounded by heavily armed Russian forces and pro-Russia militia, the Kiev government said it was drawing up plans to evacuate its outnumbered troops from Crimea back to the mainland and would seek U.N. support to turn the peninsula into a demilitarized zone.

U.N. Secretary-General Ban Ki-moon is visiting Moscow on Thursday and is to come to Ukraine on Friday.

“We are working out a plan of action so that we can transfer not just servicemen, but first of all, members of their family who are in Crimea, quickly and effectively to mainland Ukraine,” said Andriy Parubiy, secretary of Ukraine’s National Security and Defense Council.

Mr. Parubiy also announced Ukraine would hold military maneuvers with the United States and Britain, signatories, along with Russia, of the 1994 Budapest Memorandum. He provided no details.

The document was designed to guarantee Ukraine’s territorial integrity when it surrendered its share of Soviet nuclear arsenals to Russia after the Soviet Union broke up in 1991. Ukraine has accused Russia of breaching the agreement by taking over the Crimean Peninsula.

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