Although it was supposed to address global financial and economic questions, the first day of the G20 summit in Brisbane was dominated by the conflict in Ukraine. German Chancellor Angela Merkel held inconclusive discussions with Russian President Vladimir Putin regarding the crisis in Europe that many already view as the starting point for a new Cold War.

Without question, the new confrontation between Russia and the West was sparked by the issue of Ukraine's political future, and the Russian annexation of Crimea and the Kremlin's destabilizing politics in eastern Ukraine have exacerbated it massively. Nevertheless the West should not react hysterically and let itself be forced into a new Cold War by Russian hawks.

Prudence, insight into the real possibilites and dangers, as well as a new strategy are needed. What Angela Merkel is doing is entirely right and proper, namely keeping open communication channels to the Kremlin - to President Putin in particular - even if these discussions are fruitless for the moment.

New insight needed

Russian policies have generated much mistrust and consternation, but it must be an important goal of the West to remain in discussion with Putin. Only when a minimal amount of trust arises are tenable agreements possible at all. It's not just the fragility of the Minsk Agreement and the continually flaring violence in Donetsk that show this necessity. The greater danger for world peace is that Russia's flexing of its military muscles - be it bombers over the north Atlantic or warships near Australia - will cause uncontrollable escalations.

Furthermore, the West and the Ukrainian government should accept the unpleasant truth that it will be virtually impossible to improve the economic and social conditions in Ukraine without Russia's cooperation. The Kremlin has leverage over gas supplies, gas transit fees, the market for Ukrainian industrial goods, and rubel transfers from Ukrainians working in Russia. In view of Russia's Donbass and Crimea policies, no one should doubt any more that the Kremlin is prepared to use such leverage to maximize its own advantage.

Russian goals, Western responses

What is needed therefore is an agreed-upon concept between the leadership of Kyiv and the West, in order to make the Kremlin an offer that addresses Russia's underlying political goals. Of course there can be no recognition of neo-imperialist spheres of influence. And the development of a European-style constitutional state and market economy in Ukraine should not be subject to outside influence.

But a possible compromise could be that Ukraine remains neutral from a security politics standpoint, does not seek NATO membership for the time being, does not create any grave economic problems for Russia through its association agreement with the EU, and agrees to grant more autonomy to disputed regions. Ukrainian President Petro Poroshenko has already promised the last point in principle, and Brussels has already in fact agreed to avoid the economic difficulties for Russia stemming from Ukraine's EU association by delaying the implementation of the agreement until January 1, 2016.

A viable political compromise is certainly still a long way off. It will also not be easy to convince the Kremlin to step back from its aggressive line. But instead of repeatedly announcing disconnected penalties, Western governments should link their sanctions and sanctions threats to the achievement of such a political compromise. The sanctions can then be sharpened step by step, or indeed removed again.

Simply appeasement?

Understandably, anger and mistrust continue to dominate. The demand for a compromise has the potential to be quickly branded as a naive policy of appeasement, and this danger does actually exist. But Ukrainians are helped neither by moral self-righteousness nor by military measures, as the severe Ukrainian government troop losses in August have shown.

It is also clear that there will be no quick return to pre-crisis Russia-Western relations. A lot must change before a strategic partnership can be spoken of again, and a large Western "Marshall Plan" for Ukraine is also no way around the problem. The USA and the European Union are required to make this sacrifice. But without a compromise with Russia, all efforts will be in vain. President Putin knows this all too well, which is why he was so intransigent in Brisbane.