Ukraine's president has signed a trade pact with the EU, seven months after his predecessor set off a crisis in the country by backing out of the same deal.
Petro Poroshenko said it may be "most important day" for Ukraine since it became independent from the Soviet Union.
But the deal has angered Russia, which, according to the Reuters news agency, warned of "grave consequences".
Kremlin spokesman Dmitry Peskov said Russia would take measures to protect its economy if it is negatively affected by the pact.
It came as the UN's refugee agency reported a sharp rise in the number of people fleeing eastern Ukraine.
More than 16,000 people have fled their homes in the past week, bringing the number of displaced within the country to 54,000.
Mr Poroshenko gives a thumbs up to Angela Merkel at a meeting in Brussels A decision by former president Viktor Yanukovych last November to turn his back on Europe in favour of closer ties with Russia prompted violent protests on the streets of Kiev.
Mr Yanukovych was eventually ousted in February, before the crisis that saw Russia annexe Ukraine's Crimean Peninsula.
Speaking on Friday, Russian President Vladimir Putin called for a ceasefire in Ukraine to allow talks between Kiev and the rebels.
His comments came as two other former Soviet republics, Georgia and Moldova, also signed agreements with the EU in Brussels.
The deals mean businesses whose goods and practices meet EU standards will be able to trade freely in any union country without tariffs.
"Over the last months, Ukraine paid the highest possible price to make her European dreams come true," said Mr Poroshenko, who claimed to have signed the Association Agreement with the same pen his predecessor would have used.
"It's absolutely a new perspective for my country."
Alongside the deal is a long-term plan for Ukraine to adopt EU product regulations, modernise its economy and strengthen the rule of law and independent courts.
Moscow previously warned Ukraine that signing the deal could end its free trade arrangement with Russia.
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