"I am convinced that after the election in Russian Federation we will have a new start whereby we can make a true attempt and see whether we can make qualitative progress on the Minsk agreement", she added.
Merkel also said she supported the deployment of a United Nations peacekeeping force to eastern Ukraine.
After annexing Crimea in 2014, in a move that has not been recognized internationally, Russian Federation said it would not return the region.
In 2014, crisis in the eastern Ukraine and Crimea's reunification with Russia following a referendum prompted the European Union to introduce anti-Russian sanctions.
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"I would first like to see a few steps and then we could talk about the sanctions issue, but they would have to be important steps", she said.
Ukraine must pass the law in order to qualify for more aid from the International Monetary Fund, but the Fund has expressed "serious concern" that the legislation's current draft form will not guarantee the new court's independence.
The European Union's 28 member states have prolonged economic sanctions against Moscow over the annexation of Crimea by another six months, the European Council said on Monday.
During her press briefings, Mogherini insisted that the EU has "no fatigue" from Ukraine and confirmed that the European bloc is to continue supporting Ukraine politically and financially.