EU steps needed if Russian troops stay -Sweden's Bildt

STOCKHOLM (Reuters) - The European Union will need to take further action if Russia fails to withdraw its troops from Georgia in line with a ceasefire agreement, but should stop short of sanctions, Sweden's foreign minister said on Tuesday.

European Union leaders agreed at an emergency summit on Monday to postpone talks on a new EU-Russia accord due later this month until Moscow pulls its troops to pre-conflict positions in Georgia.

Carl Bildt, former United Nations special envoy to the Balkans and a vocal critic of Russia in the Georgia crisis, gave no details of what steps he favoured, but told Reuters in an interview he hoped Russia would forestall them by withdrawing.

"The determining point will be if they carry out the full withdrawal they have promised or not. If they don't do it, then of course there will be further measures of some kind," he said.

Russia crushed its southern neighbour in a brief war last month after Georgia sent troops to retake the separatist region of South Ossetia. Moscow drew Western condemnation by pushing beyond the disputed region, deploying troops well inside Georgia proper.

IT has now withdrawn most of its troops but has kept soldiers in "security zones" which include Georgian territory around South Ossetia and another breakaway region, Abkhazia.

EU leaders on Monday also condemned Russia's recognition of South Ossetia and Abkhazia as independent states.

NO SANCTIONS

The moves were aimed at bridging national differences within the bloc on how to deal with Russia and shied away from imposing sanctions on the EU's biggest energy supplier.

While Sweden has sided with Britain and eastern European states in urging a tougher line than countries such as Germany and France, Bildt said trade sanctions were hardly realistic.

"I can't really see that, and I have not seen anybody calling for it either," he said.

"I always have a sceptical view on sanctions in general. I think that long-term economic ties benefit a positive development of different societies, be it China or the Soviet Union back in those days, or Russia of today."

Bildt said that whatever steps the EU took it should not halt its dialogue and a planned EU-Russia summit in November should go ahead even if Russia did not comply with the ceasefire agreement brokered by current EU president France.

"It is always valuable to keep the contact channels open, even if the content of these channels, so to speak, changes quite dramatically," Bildt said.

"It is important that the summit is held, though the atmosphere at the meeting will be different now than it would've been, no doubt about that."

The Georgia crisis fanned fears about energy security in Europe, since many EU members are heavily dependent on Russian natural gas.

Bildt said he did not believe this would hamper EU efforts to pressure Russia, but urged an intensification of the bloc's efforts to diversify gas supply.

(Editing by Robert Hart)