Angela Merkel and Poland's prime minister have said that if immediate progress is not made in the Ukraine crisis then further EU sanctions against Russia will follow.

Angela Merkel spelled out a three-step approach to the crisis in Ukraine after talks with Poland's Donald Tusk in Warsaw on Wednesday - aid and an agreement with the Kiev government and dialogue but also possible sanctions against Moscow.

"As soon as possible we support the signing of the political part of the association agreement [between the EU and Ukraine], which could even be possible at the next European Council," Chancellor Merkel said at a joint press conference with Prime Minister Donald Tusk in Warsaw.

"Ukraine will also have the right to export its goods to the EU without customs barriers,” she said.

"We want to work together to support the Ukrainian government," Merkel said, adding that there was also a need to create a contact group with the participation of the United States and Russia to find a way out of a growing crisis in Crimea and relations between Kiev and Moscow.

She also threatened that if dialogue was not possible with Russia then sanctions could follow.

"Almost a week ago we said if that wasn't successful within a few says we'd have to consider a second stage of sanctions. Six days have gone by since then and we have to recognize, even though we'll continue our efforts to form a contact group, that we haven't made any progress," she said.

Prime Minister Tusk said that a "second wave of sanctions" could be used against Russia - mentioning asset freezes and and withdrawal of visas to officials and business people associated with President Putin - "in a situation where we do not see progress and positive steps by Russia in Crimea".

The EU has already suspended visa and investment talks with Russia and held out the prospect of a full-blown trade and economic conflict unless there was a diplomatic breakthrough.

The exact nature of possible sanctions will be thrashed out at a meeting of EU foreign ministers next Monday, Donald Tusk said.

"We hope that in the coming days there will be signs of a possible de-escalation [in Crimea] but we must be prepared for worst case scenarios," Tusk said.

Merkel added: “We are hoping for a de-escalation [of the conflict], but if that is not the case, which is a likely scenario, the EU’s foreign ministers will focus on details related to the implementation of the second stage of sanctions [against Russia] at their summit on Monday.”