EU targets Russian economy after 'deluded autocrat' Putin invades Ukraine

European Union leaders agreed on Thursday to impose new economic sanctions on Russia, joining the United States and Britain in trying to punish President Vladimir Putin and his allies for unleashing a full-scale attack on Ukraine.

However, the bloc held back from taking the harshest measures sought by Ukraine and split over just how far to take the sanctions, leaving details to be worked out in the coming days.

Russia's forces rained missiles on its southern neighbour through the day in the biggest attack by one state against another in Europe since World War Two.

Leaders of the 27-nation bloc lambasted Putin at an emergency summit in Brussels, with Latvian Prime Minister Krisjanis Karins describing him as "a deluded autocrat creating misery for millions".

The EU will freeze Russian assets in the bloc and halt its banks' access to European financial markets as part of what EU foreign policy chief Josep Borrell described as "the harshest package of sanctions we have ever implemented".

The sanctions will also target Russia's energy and transport sectors among others, and seek to stifle its trade and manufacturing with export controls.

"Our sanctions will hurt the Russian economy in its heart," said Belgian Prime Minister Alexander De Croo.

But a sense of powerlessness was tangible after Western failed to to stop a war that they leaders had seen coming.

"We were not successful enough, not decisive enough, to prevent Russia from this step, which is a tragedy for Ukraine, a tragedy for Europe and a tragedy for Russia itself," said Lithuanian President Gitanas Nauseda.

There are differences within the EU over how far to go with sanctions, with countries that would face the biggest economic backlash keen to keep the most severe steps in reserve.

"Hopefully, we will make big strides tomorrow on how these sanctions will look specifically," said Dutch Foreign Minister Wopke Hoekstra. "For the Netherlands, SWIFT is part of the discussion."

'MASSIVE AND SEVERE CONSEQUENCES'

An EU diplomat said the bloc, like the United States, would stop short of taking steps to cut Russia off from the SWIFT global interbank payments system.

Ukraine and the EU's ex-Soviet Baltic states had been pushing to remove Russia from the system. But asked about SWIFT, German Chancellor Olaf Scholz said: "We need to keep sanctions ready for later times."

Germany has already put approval of the Russian-owned Nord Stream 2 Baltic gas pipeline on ice.

In a statement agreed at the summit, EU leaders said the new round of sanctions "will impose massive and severe consequences on Russia for its action, in close coordination with our partners and allies".

Russian assets in the EU would be frozen and Russian banks' access to Europe's financial markets would be blocked.

An EU diplomat said Italy, Germany and Cyprus were among those that preferred a step-by-step approach, while central European and Baltic states - those closest to Russia - wanted a harder stance.

"Russia needs to feel that the price of aggression is significant," said Slovenian Prime Minister Janez Jansa, wearing a tie with the Ukrainian flag's yellow and blue colours.

The EU had already approved a first round of sanctions on Wednesday, including blacklisting Russian politicians and curbing trade between the EU and two breakaway regions of eastern Ukraine whose independence Moscow has recognised.

The EU will also prepare a new aid package for Ukraine and new sanctions against Belarus, used by some of the Russian invaders to enter Ukraine.

Separately, the bloc also promised support to Moldova, another ex-Soviet republic where a pro-Western government is at odds with its former overlord Moscow.

"If he (Putin) can attack Ukraine, it could be any other European country. The democratic ideas, if they were to get to Russia, they would overturn his government. He is fighting for power," said Latvia's Karins.