France, Germany drop plans for Russia summit after EU outcry

* France, Germany suggest summit with Putin

* Poland, Baltics very wary of Russia

* New sanctions also on the table

* Russia had welcomed the idea

By Marine Strauss, Robin Emmott and Sabine Siebold

BRUSSELS, June 25 (Reuters) - European Union leaders failed to agree on a proposal by France and Germany to hold a summit soon with Russian President Vladimir Putin after Poland and Baltic countries said it would send the wrong message as East-West ties deteriorate.

After U.S. President Joe Biden met Russian President Vladimir Putin in Geneva on June 16, French President Emmanuel Macron said the first EU summit with Putin since January 2014 would be "a dialogue to defend our interests". He insisted the EU could not only be reactive in its diplomacy with Russia.

But after late night talks at their meeting in Brussels, the 27 EU leaders failed to reach an agreement, German Chancellor Angela Merkel said early on Friday.

"It was a very comprehensive discussion, and not an easy one," she told reporters. "There was no agreement today on an immediate leaders' meeting," she said.

EU summits with Russia ended after Moscow annexed Ukraine's Crimea peninsula in March 2014 and the West imposed sanctions.

While Austria's Chancellor Sebastian Kurz said he supported the Franco-German proposal, many other leaders were opposed.

"It was a common position of many leaders" not to change the stance on Russia, Lithuanian President Gitanas Nauseda said after the meeting broke up. He earlier said the idea was like "trying to engage the bear to keep a pot of honey safe".

Latvia's Prime Minister Krisjanis Karins said the EU risked rewarding Russia with a summit even though diplomacy has failed to end the conflict in eastern Ukraine with Russian-backed separatists.

Instead, EU leaders fell back to a familiar position of warning of more sanctions on Moscow if it continued what the EU says is a Russian policy of disinformation, cyber and covert attacks and interference to try to divide the bloc.

Russia denies any wrongdoing.

In a summit statement, leaders called on the European Commission and the EU's top diplomat Josep Borrell "to present options for additional restrictive measures, including economic sanctions" against Russia.

The EU has sanctions on the Russian energy, financial and arms sectors and individual sanctions on Russians accused of human rights abuses and for using banned chemical weapons.

Diplomats say further sanctions could target Russian money laundering or powerful oligarchs suspected of serious corruption abroad, as non-EU member Britain did for the first time in April.

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Macron had tried in September 2019 to seek less frosty ties with Putin, without success, and Germany's outgoing Chancellor Angela Merkel met Putin in Moscow in January 2020. Putin held a phone call with European Council President Charles Michel, who chairs EU summits, on June 7 this year.

France and Germany want to be able to work with Russia on combating climate change and to find ways to stabilise relations. Merkel said even without a summit: "Formats will be explored ... under which dialogues can be started."

Many EU countries are concerned that the Kremlin does not take the bloc seriously, after Borrell was publicly humiliated in February by the Kremlin. Russia expelled EU diplomats during Borrell's visit to Moscow without warning.

Lithuania's Nauseda said: "We should be extremely cautious, this is not like the relationship of Russia with the United States".

While France is a nuclear power, the EU relies on NATO for its territorial defence and takes decisions among 27 states, making it easier for the Kremlin to exploit divisions.

The Kremlin earlier welcomed the idea of a summit, saying both Brussels and Moscow needed dialogue, although Russian Foreign Minister Sergei Lavrov said he wanted more details.

On opposing sides in standoffs in Ukraine and Belarus, and at odds over human rights, the EU and Russia accuse each other of threatening security and stability from the Baltics to the Black Sea.

The EU on Thursday imposed economic sanctions on Belarus, an ally of Russia that the Kremlin sees as a buffer state between Russia and NATO. (Reporting by Robin Emmott, Gabriela Baczynska, Francesco Guarascio and Philip Blenkinsop in Brussels, additional reporting by Thomas Escritt and Caroline Copley in Berlin and Ekaterina Golubkova in Moscow; editing by Angus MacSwan, Philippa Fletcher, William Maclean and Raju Gopalakrishnan)