German Chancellor Angela Merkel said on Thursday that the European Union would review its energy policy and reduce its reliance on Russian oil and gas. "There will be a new look at energy policy as a whole," she said in a joint press conference with visiting Canadian Prime Minister Stephen Harper, adding that the EU was highly dependent on Russia for fuels. The EU is threatening that economic sanctions would be slapped on Russia, if the crisis in Crimea escalated. 33 officials from Crimea and Russia have been blacklisted by the 28-member union. Economists warned that given the close trade ties between EU and Russia, economic sanctions would also hurt the recovering economy in Europe. In Germany, roughly 31 percent of total crude oil and natural gas imports came from Russia. "Germany cannot afford to cease trade with Russia entirely in the short-term," said Erdal Yalcin, an expert from market research institute Ifo. The Munich-based institute found in its recent survey that German business morale in March dipped after four consecutive monthly increases, due to the events in Crimea. GfK, another research institute, also warned earlier this week that German consumers' sentiment would be negatively affected by the events. As Germany has decided to phase out nuclear energy, a gap exists before the country reaches its target of having 80 percent of power from the renewables by 2050. For filling the power gap, conventional sources such as oil, gas and coal are needed. On the Thursday press conference, when she was asked whether Germany would consider using Canadian energy as an alternative for that from Russia, Merkel said as Europe looked to diversify its energy supplies, Canadian energy imports would be a long-term project for Germany, since there was lack of infrastructure for getting Canadian energy currently.