By Robin Emmott and Justyna Pawlak
BRUSSELS (Reuters) - The European Union signed an historic free-trade pact with Ukraine on Friday and warned it could impose more sanctions on Moscow unless pro-Russian rebels act to wind down the crisis in the east of the country by Monday.
Shortly after returning to Kiev from Brussels where he signed the pact, Poroshenko announced on his website that Ukraine had extended a ceasefire by government forces against pro-Russian separatist rebels by 72 hours until 10 p.m. on Monday.
Ukrainian President Petro Poroshenko came to Brussels to sign a far-reaching trade and political cooperation agreement with the EU that has been at the heart of months of deadly violence and upheaval in his country, drawing an immediate threat of "grave consequences" from Russia.
Georgia and Moldova signed similar deals, holding out the prospect of deep economic integration and unfettered access to the EU's 500 million citizens, but alarming Moscow, which is concerned about losing influence over former Soviet republics.
The week-long ceasefire had been due to expire on Friday.
The extension was made, Poroshenko's website said, in line with a Monday deadline set by EU leaders for the rebels to agree to ceasefire verification arrangements, return border checkpoints to Kiev authorities and free hostages including detained monitors of the OSCE rights and security watchdog.
"We expect progress in the next hours," German Chancellor Angela Merkel said. "If we don't see any steps forward on any of the points, then we are also prepared to take drastic measures."
EU leaders said they were ready to meet again at any time to adopt significant sanctions on Russia. Diplomats said they could target new people and companies with asset freezes as early as next week. More than 60 names are already on the list. Continued...
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