As to what Europe, meaning the EU and its constituent nations, should do. Sanctions?
...
using the built-in European majority to remove Russia from G8.

Further, why would Europe want to take a confrontational approach to Russia? How would it be in our interest to further alienate them? What possible purpose would that serve?

If we want to live in a world of international law we better start building it. That mean treaties, and long term building of trust. Asymmetrical treatment of display of force by Great Powers amount to little more than taking sides in a petty game of Power. There is precious little to convince me that the United States should be afforded more benefit of the doubt in its wrongdoings than Russia. Thus, with very recent precedents in such matters, I don't see how Europe could take any kind of punitive action against Russia. We could perhaps muster a sternly worded letter, condemning both sides for blah, blah, blah.

For future stability in Europe it may help to quit NATO, kick out American troupes, and assume a position of neutrality with respect to World Military Powers. Other than that, continued trade and economic interdependence with our neighbours, and treating them with respect might be a good idea.