KIEV, Ukraine — Russia faces further sanctions from the European Union on Thursday over its annexation of the Crimean Peninsula as tensions in the region remained high despite the release of a Ukrainian naval commander.

In an address to the German Parliament in Berlin, Chancellor Angela Merkel said the EU was readying further sanctions and that the G-8 forum of leading economies had been suspended indefinitely. Russia holds the presidency of the G-8 and President Vladimir Putin was due to host his counterparts, including President Barack Obama, at a summit in Sochi in June.

“So long as there aren’t the political circumstances, like now, for an important format like the G-8, then there is no G-8,” Merkel said. “Neither the summit, nor the format.”

Earlier this week, the EU and the United States slapped sanctions on certain individuals that were involved in what they say was the unlawful referendum in Crimea over joining Russia. Moscow formally annexed Crimea earlier this week in the wake of the poll. The Black Sea peninsula had been part of Russia for centuries until 1954 when Soviet leader Nikita Khrushchev transferred it to Ukraine.

Russian forces effectively took control of Crimea some two weeks ago in the wake of the ouster of Ukraine’s pro-Russia president, Viktor Yanukovych, after months of protests and sporadic violence. The crisis erupted late last year after Yanukovych backed out of an association deal with the EU in favor of a promised $15 billion bailout from Russia. That angered Ukrainians from pro-European central and western regions.

Merkel said EU leaders would increase those “level 2” sanctions against Russia when they meet later Thursday in Brussels to widen the list of those whose assets are being frozen and who are banned from traveling.

She also reiterated that if things worsen, the EU is prepared to move to “level 3” measures, which would include economic sanctions.

“The European Council will make it clear today and tomorrow that with a further deterioration of the situation we are always prepared to take level 3 measures, and those will without a doubt include economic sanctions,” she said.

Merkel’s tough approach came as the commander of Ukraine’s navy was freed after being held by Russian forces and local Crimean militia at the navy’s headquarters.

Rear Adm. Sergei Haiduk and an unspecified number of civilians were held for hours after the navy’s base in Sevastopol was stormed Wednesday. Early reports said the storming was conducted by a self-described local defense force, but Thursday’s statement by acting President Oleksandr Turchynov, which confirmed the release, said Russian forces were involved.

Attempting to face down the unblinking incursion, Ukraine on Wednesday said it would hold joint military exercises with the United States and Britain, signatories, along with Russia, of the 1994 Budapest Memorandum — a document designed to guarantee Ukraine’s territorial integrity when it surrendered its share of Soviet nuclear arsenals to Russia after the Soviet Union broke up in 1991.