The European Union today announced €1 billion in emergency aid for Ukraine as it called for far-reaching economic reforms and a stepped-up fight against corruption.

With EU leaders to discuss a response to Russia's annexation of Crimea at a summit tomorrow and Friday, the bloc detailed an initial €1 billion in aid to help stabilise Ukraine's faltering economy.

The money is part of a wider aid package agreed earlier this month worth €11 billion which will run for several years.

While the focus has been on the recent "dramatic security and political developments, we should not forget that Ukraine's economic and financial situation has been deteriorating rapidly," EU Economic Affairs Olli Rehn said.

"Creating the conditions for economic stabilisation is an essential step in order to help Ukraine to stabilise the political situation," he added,

Alongside the €1 billion, the EU is also making available another €610m under the terms of an EU Association Accord which now-ousted pro-Russian president Viktor Yanukovych ditched in November.

EU leaders are due to sign the political chapters of the EU accord with Ukraine's new pro-European government on Friday, having already granted tariff cuts worth €500ms agreed in an accompanying free trade agreement with Kiev.

Rehn said the €1 billion will go to meet Ukraine's immediate financial needs but are also "aimed at supporting economic reforms."

These reforms should improve overall management of the economy, thereby helping growth and the public finances, and boost the fight against corruption, Rehn said.

He singled out electricity costs as one example of needed reform, saying massive government subsidies put great pressure on public finances. Ukrainian citizens had been calling for such changes "for so many months and so many years," he added.