World leaders have threatened Russia with significant diplomatic and economic costs unless it ends its military intervention in Ukraine, but the European politician with the most clout has been far more subdued.

German Chancellor Angela Merkel, who presides over Europe's economic engine, said little publicly after Russian troops swept into Crimea.

Word leaked that she told President Obama after a phone call with Vladimir Putin that she was not sure the Russian leader was in touch with reality and that he was “in another world.”

Merkel restricted her public comments to the importance of “preserving the territorial integrity” of Ukraine. Privately, though, she is at the center of the East-West showdown with Russia, armed with the kind of economic leverage that could push Putin to adopt a more peaceful path.

Russia is Germany's biggest supplier of energy, and the two leaders have a respectful, if business-like, relationship. Putin and Merkel have spoken several times during the Ukraine crisis, and Obama is urging her to convince Putin that he has overplayed his hand.

Early in the crisis, Germany signed onto a G-7 statement condemning Russia's swift invasion of Crimea. Those countries — the U.S., Britain, Germany, France, Canada, Italy and Japan — said they would cancel plans to attend meetings in advance of the G-8 Summit scheduled for June in Sochi, Russia.

But officials in Berlin have made it clear — at least for now — that they do not support U.S. threats to cancel the summit altogether and would resist efforts to kick Russia out of the G-8.

American conservatives argue that Obama should quickly work to open U.S. energy resources to Europe, even as he works to convince its leaders that standing up to Moscow is worth it in the long run.

"[Obama] does need to step up and provide a level of leadership at a time when that's not going to be easy,” said Charles Kupchan, a senior fellow on the Council on Foreign Relations and professor of international affairs at Georgetown University.

Leon Aron, a resident scholar and director of Russian studies at the American Enterprise Institute, points out that Russia imports more than half of its whole foods from Europe.

“I think Putin would think twice before he lets Europe freeze, because Europe might think about letting Russia starve,” he said.

Merkel herself has every reason to avoid a drawn out East-West clash.

After the Soviet Union fell, former communist countries became manufacturing centers and ready marketplaces for German-produced goods.

While Germany has worked to extend new trading opportunities to Ukraine, Poland and Baltic states, it has been careful not to stir up trouble with Russia, one of its main business partners.

But if Merkel waits too long or shies away from a direct confrontation, she risks encouraging Russian land grabs like the one in Crimea.

"Putin is acting strong and reckless, and it doesn't seem like anybody wants to take him on," said J.D. Gordon, a retired Navy commander and former Pentagon spokesman under President George W. Bush. "Unless Europe steps up, Ukraine is just going to have to deal with losing Crimea."