G-7 meeting will officially mark the new Cold war.

The Canadian Prime Minister made it crystal clear that there won't be normal relations with Russia until Putin is in charge.

Chancellor Merkel added that there is no chance of Moscow rejoining the G-7 any time soon.

Left with no option but to play for pride Mr. Lavrov said that Russia is not interested in G-7 format any more.

At the moment it is hard to imagine a sensible plan how this tougher line will reflect on other formats, including the G-20. Recent stories in Australia are not reassuring either.

The West and Russia are in for a long fight - at least as long as Putin is able to hold on to power or to force the West to accept his terms. This was an inevitable outcome as the gap between Moscow's and the West's red lines for compromise has been irreversibly widening.

Russia is rearming at a pace unseen since the collapse of the Soviet Union, regardless of shrinking budget base. President Putin can's sustain this brinkmanship for long - it is either act soon or loose in waiting.

The nuclear threat is of little use.

He has to act and force a truce on his own terms or at least on terms that will allow his country to return to the global markets. Seems unlikely that the end of June will see any loosening of the sanctions, which is another milestone in the tug war that will last for years.

Russia's is digging in heels and gets ready for a continuous confrontation with the West - this besieged mentality is essential for Putin's grip on power.

But this is unsustainable in the long run. Setting the Russian economy on a war footing might be seen as shot of adrenaline but is unable to reverse a terminal economic malaise.

It is time for adjustment of policies and economic ties with Russia, accordingly. No room for middle ground politics.