Russian military aggression in Ukraine damages the Kremlin itself, President of the United States Barack Obama said at the Group of Seven summit in Germany.

President of Russia Vladimir Putin is wrecking his country’s economy trying to “re-create the glories of the Soviet empire,” Obama said at the Bavarian Alps, according to CNN.

It's Obama vs. Putin

“Ultimately, this is going to be an issue for Mr. Putin. He’s got to make a decision,” Obama said, referring to Putin. “Does he continue to wreck his country’s economy and continue Russia’s isolation in pursuit of a wrong-headed desire to re-create the glories of the Soviet empire, or does he recognize that Russia’s greatness does not depend on violating the territorial integrity and sovereignty of other countries?”

Putin was not present at the summit for the reason that he had been ousted from the Group of Eight over his annexation of Crimea in 2014 and his ongoing aggressive moves in eastern Ukraine.

“As we’ve seen again in recent days, Russian forces continue to operate in eastern Ukraine, violating Ukraine’s sovereignty and territorial integrity,” Obama said.

The US President also stated that Russia’s actions in Ukraine are hurting Russia itself and its citizens. He also reaffirmed that the Western economic sanctions will not be lifted as long as Russia continues fueling its aggression in eastern Ukraine, while not adhering to the Minsk cease-fire agreement signed 4 months ago.

“If Russia, working through separatists, doubles down on aggression inside of Ukraine,” then the US along with European Union will increase their sanctions, Obama promised.

The official Kremlin did not reply to Obama’s accusations but said that Putin was absent at the summit as he preferred “other formats” that were more effective and more reflective of the current economic balance in the world.

“It’s impossible now to get together in seven or eight people and effectively discuss global problems,” Putin’s spokesman Dmitry Peskov said, according to the RIA news agency.

Are there differences on Russia within the G7?

However, Russia was not the central subject of discussions at the Group of Seven summit.

The leaders of the seven countries outlined the necessity to fight such terrorist organizations as Islamic State and Boko Haram. The present leaders at the summit also stated that forming a unity government in Libya would also be a major step in fighting terrorism.

The Group of Seven warned that the countries could pressure Moscow with further economic restrictions depending on Putin’s willingness to adhere to the Minsk agreement.

UK Prime Minister David Cameron said that the implementation of the Minsk agreement requires actions from both Russia and Ukraine. Chancellor of Germany Angela Merkel simply pointed out that the sanctions imposed on Russia directly depend on the Ukrainian crisis.

President of France François Hollande urged the Group to continue the dialogue with Moscow, which would help reach solutions on the matters of Iranian nuclear program and global warming.

Prime Minister of Italy Matteo Renzi said that Russia has played a major role in settling the most important issues of international relations. Prime Minister of Japan Shinz? Abe pointed out that he intends to continue the dialogue with Russia, however he did not see the G7 turning into the G8 in the nearest future.

Prime Minister of Canada Stephen Harper was more discreet and expressed his satisfaction over the results of the summit, the leaders of which maintained a united position toward Russia.

It is also interesting to point out that before the summit, Merkel said that it was impossible to come back to the G8 format as long as Russia fails to comply with basic common values of democracy and states based on rules of law. However, German Minister for Foreign Affairs Frank-Walter Steinmeier is convinced that the Group of Seven would not be effective in the long term and does not comply with interests of other leading countries.

How will Putin respond to Obama? Pragmatic course or more hot-headed approach?

The main question is: will Putin continue his ‘pragmatic’ course or will he opt for a more ‘hot-headed’ policy toward the West? Before Obama’s statements, Putin has been acting differently. Russia’s support of separatists in Ukraine has been effective but highly secretive.

And yet, Russia hopes to improve its relations with the West, or at least Europe. Putin, in turn, does his best to cover the fact of Russia’s presence in Ukraine to buy time and use the differences between the US and Europe and the differences between some European states.

Putin’s unwillingness to make radical changes in his diplomatic path explains the hybrid war that Russia is waging in Ukraine: meaning that Russia supports separatists militarily, while making it officially look like Moscow takes no part in the one-year old conflict.

However, Russian denies of being involved in the conflict look unconvincing and somewhat ridiculous. These denies simultaneously turn Russia into a ‘victim’ of criticism and give Washington and Europe hope that Russia will not be able to sustain its growing casualties in the conflict. In the conflict in which Russia, as it says itself, takes no part of.

However, Putin’s attempts to pursue the pragmatic course, while trying to realize a more hot-headed approach cannot go on for much longer. Many Putin’s advisors believe that any hopes on restoring relations with the West are doomed to fail. The US and the Western states will never make any decision that would satisfy at least some Russia’s demands.

Apart from the sanctions, there are also two other factors that can influence Putin’s choice: a military defeat of separatists in eastern Ukraine or Ukraine joining NATO.