By Paul Taylor and Jan Strupczewski
BRUSSELS (Reuters) - European Union leaders failed to agree at a summit on Wednesday on sharing out a package of top jobs in the 28-nation bloc, including a new foreign policy chief, and postponed the decision until late August.
The talks foundered over opposition to Italian Foreign Minister Federica Mogherini's candidacy for the foreign policy role and demands by central and east European leaders that the job should go to someone from their region, diplomats said.
"It's a bit unfortunate but not dramatic at all," European Council President Herman Van Rompuy, who chaired the summit, told a news conference. "These things take time. I'm absolutely certain we will take the decision on Aug. 30."
The leaders did agree to step up sanctions against Russia over separatist violence in eastern Ukraine, shortly after Washington also tightened the screw. [ID:nL2N0PR225]
German Chancellor Angela Merkel said Moscow had failed to fulfil commitments to restore peace in the region. The EU will expand sanctions against Russia to target companies that undermine Ukrainian sovereignty and will ask the EU's European Investment Bank, and the European Bank for Reconstruction and Development to suspend new lending.
Former Luxembourg prime minister Jean-Claude Juncker has already been approved as president-elect of the executive European Commission.
But the summit stalled over the allocation of other top posts, including a successor to Van Rompuy, who will help shape Europe's response to economic stagnation, the crisis in Ukraine and Britain's wavering membership of the bloc.
Several leaders said they did not get as far as discussing names because of disagreement on the criteria under which the top jobs should be distributed.
Mogherini, 41, began the day as front-runner but Poland and Baltic states voiced misgivings about her inexperience and her emollient attitude towards Russia since its annexation of Crimea in March.
Lithuanian President Dalia Grybauskaite told reporters: "I will support a person with experience in foreign affairs and a person who is neutral and at least reflects all opinions of all member states on the conflict between Russia and Ukraine and I will not support a person who is pro-Kremlin."
That irked Italian Prime Minister Matteo Renzi, who said: "This is not about questioning one position or another, it's questioning the respect that is due to all member states, and in particular to a founding member."
He denied there had been opposition to Mogherini, but other diplomats said her candidacy was in trouble.
INSURANCE AGAINST FAILURE
Danish Prime Minister Helle Thorning-Schmidt, 47, arrived at the meeting with broad support to take the European Council job, chairing the bloc's regular summits, but France had reservations because her country is not a member of the euro zone.
Thorning-Schmidt insisted she was not a candidate. Diplomats said that was mainly to insure herself back home against the risk of failure.
Some diplomats said French President Francois Hollande could accept her if France's candidate was assured of the key economic commissioner's job, which supervises national budgets. However, Germany is not keen to see former Finance Minister Pierre Moscovici in that role because Paris is still off track to bring its deficit down to the EU limit.
Polish Foreign Minister Radoslaw Sikorski and Bulgaria's Kristalina Georgieva, the EU commissioner for development, are possible alternatives for the foreign policy job. Some west Europeans see Oxford-educated Sikorski, a respected strategic thinker, as too belligerent toward Moscow.
Bulgaria formally proposed Georgieva, 60, who spent 17 years at the World Bank as an economist and has few political enemies but little foreign policy experience.
Leaders said further talks would be necessary in the coming weeks over a package that will include an influential full-time chairman of euro zone finance ministers for five years, likely to go to conservative Spanish Finance Minister Luis De Guindos.
The selection is delicate with a wide disparity of views across the 28 EU states, spanning Britain, where some Eurosceptics want to quit the bloc, to Greece, which narrowly avoided leaving due to economic turmoil.
Other key posts at the Commission, which proposes and enforces laws for 500 million Europeans, include the commissioners in charge of economic affairs, competition, trade, the internal market and energy policy. "We need to find the right balance between political parties, between north and south, between male and female. A lot needs to be taken into account, but the most important thing is competence," Finnish Prime Minister Alexander Stubb said. The centre-right Juncker, who won an investiture vote in the European Parliament on Tuesday, attended the summit and will compose his Commission team from candidates put forward by national governments.
Juncker is seeking to put more women in top jobs. European Parliament President Martin Schulz warned the new team would be unlikely to win a confidence vote in the EU legislature if it contained fewer than the nine women in the outgoing Commission.
"Parliament will not accept a gentlemen's club," he told the leaders in a speech text distributed to reporters.
Britain may struggle to secure an important position for its nominee, little-known lawmaker Jonathan Hill, as Prime Minister David Cameron tries to renegotiate EU membership terms before a promised 2017 referendum on whether to stay in the bloc.
Britain may be satisfied if Thorning-Schmidt, who has good ties to Cameron, gets the European Council job. Other possible contenders are the former premiers of Baltic euro zone nations Estonia and Latvia, Andrus Ansip and Valdis Dombrovskis.
The leaders feted Merkel, Europe's most powerful leader, with flowers when the summit dragged on past midnight into her 60th birthday.
($1 = 0.7389 Euros)
(Additional reporting by Barbara Lewis, Robin Emmott, Francesco Guarascio, Jan Strupczewski, Martin Santa and Adrian Croft. Editing by Mike Peacock)