BRUSSELS (Reuters/AFP) - French President Francois Hollande said on Thursday that more European Union sanctions on Russia would be on the cards if the Ukraine ceasefire deal just brokered by France and Germany was not respected.

If the Minsk deal is not respected "we would get back into the procedure that you know... where sanctions would be added to the sanctions that are already in place", he indicated. If the ceasefire is fully respected, however, sanctions would progressively be lifted, he said. "It is clear that if everything falls into place, then measures will be taken at the European level to ease sanctions" imposed against Russia over its intervention in Ukraine, Mr Hollande said. "France would be part of such a process but for the moment we are not there yet."

He added that conditions were "still not right" for France to hand over the Mistral warships Moscow has ordered to Russia. Mr Hollande suspended the 1.2 billion euro (S$1.85 billion) sale last year as the Ukraine crisis deepened, fearing it would boost Russia's military capabilities and put Paris in hot water with its allies. France delayed delivery of the first vessel due last November and then postponed it "until further notice". Moscow promptly warned it would demand costly compensation if the sale was cancelled outright and the deal has been in limbo ever since.

German Chancellor Angela Merkel also said after an EU summit on Thursday that the EU may impose further sanctions if the ceasefire deal, sealed in Minsk between Ukraine and Russian-backed rebels, is not fully implemented.

Fresh from brokering the deal in Minsk between Russian President Vladimir Putin and Ukrainian President Petro Poroshenko, Dr Merkel told a news conference that EU leaders had asked the executive European Commission to prepare further sanctions in case the ceasefire did not hold.

"We hold open the possibility, if these new agreements are not implemented, that we must take further measures," she said, adding that existing sanctions could only be lifted when the grounds that led to the are removed.

The EU has already imposed sanctions on Russia and pro-Russian separatists in Crimea and eastern Ukraine, including visa bans and asset freezes on individuals, as well as curbs on access to European capital markets, weapons and technology.