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* New meeting of EU governments may be required for decisiveaction
* Meeting Tuesday could decide on names, companies
* Next summit scheduled for end-August
* Economic sanctions could have heavy price for fragile EU (Updates with Cameron comments on French warship deal)
By Barbara Lewis
BRUSSELS, July 21 (Reuters) - For all the tough talk, Europeis unlikely to punish Russia over last week's downing of anairliner over Ukraine beyond speeding up the imposition ofalready agreed individual sanctions when the bloc's foreignministers meet on Tuesday.
The severity of future European Union sanctions could dependon the Netherlands, which suffered the greatest loss of lifewhen the Malaysia Airlines flight was brought down.
U.S. President Barack Obama has piled pressure on Europe fora more forceful response, and the three leading EU powers -Britain, France and Germany - said they should be ready toratchet up sanctions.
But demonstrating the difficulty of getting agreement from28 member states, London clashed with Paris over France'sdecision to press ahead with the sale of warships to Russia.
British Prime Minister David Cameron said on Monday such anorder had become "unthinkable".
"We need to put the pressure on with all our partners to saythat we cannot go on doing business as usual with a country whenit is behaving in this way," Cameron said.
He also said the European Union should consider hard-hittingeconomic sanctions and that Russia could not expect access toEuropean markets, capital and technical expertise.
Diplomats said Tuesday's meeting in Brussels was still notexpected to go much further than agreeing on the people andpossibly companies to be hit with asset freezes under a moreaggressive framework agreed last week. Previously, they had onlysaid they would decide on the list by the end of July.
Several diplomats said moving towards more sweeping economicsanctions could only be decided by heads of government. Theattitude of the Netherlands, which lost 193 people in theincident, would be critical, the diplomats said.
"The impulse must come from The Hague because they have themoral mandate to demand a resolute, firm reaction. Everythingdepends on that," one EU diplomat said on condition ofanonymity.
"I think the events will serve to speed up sanctions, but aslong as no new European council (of leaders) is called,ministers cannot go further even if they want to," another EUdiplomat said.
The next scheduled summit of EU leaders is on Aug. 30,though EU members could call for another emergency meeting.
PROOF?
A summit of EU leaders on July 16, the day before theairliner was shot down, agreed the EU would punish Russiancompanies that help to destabilise Ukraine and block new loansto Russia.
The wording was deliberately vague as the meeting agreed totarget "entities, including from the Russian Federation, thatare materially or financially supporting actions undermining orthreatening Ukraine's sovereignty".
Adding companies to any sanctions list is more complicatedthan naming individuals because of the risk of legal challenges.
The United States and its allies have blamed pro-Russianrebels and Moscow itself over the downing of the plane. Russiahas denied involvement.
Speaking in parliament on Monday, Dutch Prime Minister MarkRutte said the EU would impose further sanctions on Russia if itwere proved that Russia had been directly or indirectlyresponsible for bringing the plane down.
Analysts say it could be extremely difficult to proveresponsibility for the disaster, which has been viewed as apotential turning point for international pressure to resolvethe crisis in Ukraine.
Hundreds have died in a pro-Russian insurgency in easternUkraine, which broke out after Russia annexed the Crimeapeninsula following the toppling of a Moscow-backed president inKiev in February by pro-Western protesters.
Britain has said it is ready to pay the price of movingtowards a new phase of EU economic sanctions because much biggercosts were at stake.
London is a prime destination for Russian businesses, andRussian oligarchs are major property owners in Britain.
Britain's energy major BP already faces the prospectof fallout following the U.S. decision to sanction Russia'slargest oil firm Rosneft, of which BP owns a fifth.
France has said so far it is going ahead with a 1.2 billioneuro ($1.6 billion) contract to supply Mistral helicoptercarriers to Russia because cancelling the deal would do moredamage to Paris than to Moscow.
On Monday, a French defence ministry official said anydecision on whether to suspend the delivery of the first warshipwould only take place in October.
ENERGY
EU diplomats made clear sectoral sanctions would beextremely difficult for many EU nations. They are especiallynervous about the energy sector, central to the Russian economy,but also to the European Union.
EU nations rely on Russia for about 30 percent of their gasdemand and have intertwined interests based on decades of energyreliance. According to U.N. data, excluding Russian pipeline gasexports to the EU - around $60 billion a year - the Netherlandswas the biggest destination for Russian exports last year,mostly of oil and metals.
"Energy sanctions would most likely derail the fragileEuropean recovery in general and could even lead to a completeeconomic collapse in certain member states," one diplomat said."I don't see how collective economic suicide serves us or theUkrainians."
While some member states, such as Britain, do not rely onRussian gas, others are 100 percent dependent on Russia, havingno other suppliers. In volume terms, Germany and Italy have thebiggest exposure.
Diplomats said that if energy had to be part of anysanctions regime, the European Union would have to agree ways toshare the financial burden. ($1 = 0.7395 Euros) (Additional reporting by Jan Strupczewski, Adrian Croft andJustyna Pawlak in Brussels and Marine Pennetier in Paris,Michelle Martin in Berlin and Kylie MacLellan and William Jamesin London and Tom Miles in Geneva and Thomas Escritt inAmsterdam; Editing by Philippa Fletcher and Will Waterman)
