The Italian daily La Reppublica has published what appears to be the account of Prime Minister Matteo Renzi, of an exchange held at the 30-31 August EU summit. Commission President José Manuel Barroso is reported to have told EU leaders that Vladimir Putin had informed him that he could take Kyiv in two weeks if he wanted.

According to La Reppublica the exchange took place after Ukrainian President Petro Poroshenko left the summit table, having made a dramatic account of the situation in his country.

>> Read: Poroshenko: The EU's agenda now revolves around Ukraine

Lithuanian President Dalia Grybauskaitė reportedly made the toughest remarks, basically repeating what she had told the press hours earlier, that “Russia is at war with Europe.” She also advocated providing direct military support to Kyiv.

Then German Chancellor Merkel described as “furious against Putin”, took the floor. She reportedly said that the next target of Russia after Ukraine could be EU members Lithuania or Estonia.

Following these dramatic remarks, the silence was broken by Barroso, who shared what Putin told him over their last telephone conversation, held on 29 August. Barroso said he held Putin accountable for the military action of the separatists in Ukraine. At this point, Putin erupted: “The issue is not this. If I want, I can take Kiev in two weeks,” he is reported to have said.

A Kremlin foreign policy aide commented today (2 September) Putin’s statement with the Russian Itar-Tass news agency.

He didn’t deny that Putin had said the Russian army could capture Kyiv within two weeks, but said the words were “taken out of context”.

"It was taken out of context and had a totally different meaning," Yuri Ushakov was quoted as saying.

In any case, the disclosed exchange clearly illustrates that EU leaders do not know how to handle Putin, and that there is no consensus on how to deal with him. The same source reveals that not only Slovakia, but Hungary and Cyprus had also opposed further sanctions on Moscow.

Renzi reportedly tried to calm the discussion, stating that Russia remains strategic for the EU from an economic perspective, and also for helping manage the crisis in Iraq and Syria.

This statement reportedly helped shelve proposals for arming Kyiv, with European leaders deciding instead to give Moscow a final week to improve the situation on the ground, before “third level” sanctions are decided upon.

 In diplomatic jargon, “third level” sanctions refer to economic sanctions that are intended to hit Russia's major economic players, with negative consequences for EU businesses.  

Rebels seek ‘special status’

In the meantime, various reports suggest that Russian tactics with Ukraine are not aimed at separating territories from the country, but rather establishing a federation in which each integral part would hold veto power to decide major issues, such as EU association or NATO membership. By calling for peace talks, the EU may therefore find itself trapped by this Kremlin strategy.

A meeting of the so-called “contact group” was held in the Belarusian capital of Minsk yesterday (1 September), with the participation of pro-Russia separatists, who said they would be prepared to stay part of Ukraine if they were granted "special status".

Russia, in particular, has been pushing for a fresh meeting of the "contact group", in which Ukraine is informally represented by Ukrainian ex-president Leonid Kuchma.

The separatists issued their call as the Ukrainian military faced a number of reversals on the battlefield.

Sepratists said they wanted recognition of special status for their territories, with the right to conduct their own foreign trade policy, in order to allow them to integrate with the Russian-led Customs Union.

NATO creates ‘spearhead force’

In the meantime, NATO announced it would respond to the Ukraine crisis by agreeing this week to create a "spearhead" rapid reaction force, consisting of several thousand troops, that could be sent to a hotspot in as little as two days.

The 28-nation alliance already has a rapid reaction force, but US President Barack Obama and other leaders meeting for a NATO summit in Wales on Thursday and Friday are expected to create a new force that would be able to respond more quickly to a crisis.

"We will develop what I would call a spearhead [...] a very high-readiness force able to deploy at very short notice. This spearhead would be provided by allies in rotation, and could include several thousand troops, ready to respond where needed with air, sea and special forces support," NATO Secretary-General Anders Fogh Rasmussen told a news conference.

Speaking on condition of anonymity, a senior NATO official said that the spearhead force could range from "a very small size up to something potentially as large as a brigade size". A NATO brigade typically numbers between 3,000 and 5,000 troops.

The official said the force would be able to deploy to a crisis zone in just two days. Other NATO sources said however that some elements of the force might take longer to arrive.

Currently it takes five days for the first units of NATO's rapid reaction force to arrive.

The creation of the new force will be one of a range of measures in a "readiness action plan" that NATO will adopt at the summit to step up deterrence in response to the Ukraine crisis.

NATO leaders will also "enhance the breadth and depth" of the naval forces it has on standby, which allies take turns to contribute to.

They will also work to improve alliance intelligence capabilities and its ability to respond to the type of "hybrid" warfare used by Russia in Ukraine, which NATO officials say have included disinformation, subversion and cyber-attack.