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This analysis first appeared in Les Echos

German Chancellor Angela Merkel has only one phobia: dogs. So what did Russian President Vladimir Putin offer her when she visited him for the first time in January 2006? A toy dog.

To be fair, she sort of had it coming. Shortly after being elected in 2005, she used a trip to Moscow to meet with the opposition as a way to illustrate her political differences with predecessor Gerhard Schröder, a close friend of the Russian president.

One year later, when Putin welcomed her to his residence in Sochi, he let his black labrador Koni jump on her. "This dueling atmosphere between Merkel and Putin persists to this day," journalist Stefan Kornelius observes in his recent biography of the German leader.

And yet, as Europe is undergoing "the worst crisis since the fall of the Wall," as German Foreign Minister Frank-Walter Steinmeier has put it, any hope for a diplomatic solution rests primarily on this strange relationship. At the moment, Merkel is the only Western leader that Putin really respects.

That's in part because the chancellor grew up in Eastern Germany and speaks Russian. "She understands what others don't," says Stefan Meister of the European Council on Foreign Relations. The opposite is also true. Putin, who speaks German fluently and passed his passion for the language down to his children, was stationed in Dresden as a KGB agent when the iron curtain fell.

This understanding between the two leaders was obvious in 2008, when Merkel curbed the United States' wish to bring Ukraine and Georgia into NATO, fearing a Russian backlash. Six years on, experts are wondering if she avoided a conflict with Moscow or indeed failed to definitively pull Kiev out of the Kremlin's orbit.

Since that day, Putin has regarded the German chancellor as a difficult but reliable partner, despite the fact that they have polar-opposite convictions. Merkel, for example, sees the fall of the Berlin Wall as progress, allowing access to freedom and Western values. Meanwhile, the Russian president once described the collapse of the Soviet Union as "the greatest geopolitical tragedy of the 20th century."

At the center of it all

In any case, Germany still has a crucial role to play. In fact, because of its geographical - not to mention cultural and economic - links with the East, it has no choice but to be heavily involved. Berlin is, after all, an Eastern city: It is closer to the Ukrainian tourist town of Lviv than it is to Paris. And there are three million Russian-speaking people in Germany (almost as many as people from Turkey), who mostly come from former Soviet republics.

All of these factors explain why the tensions in Crimea are being followed so closely in Germany. Media outlets are barely covering anything else right now. In that way, the coverage is about as breathless as it was during the Chernobyl nuclear disaster.

The economic relationship between the two countries also explains this interest: Germany buys one-third of its gas and oil from Russia, and exchanges between the two countries are valued at around 80 billion euros ($110 billion). Thus Merkel's dilemma. She cannot break up this commercial relationship, but she must be credible when she threatens with economic sanctions.

"German dependence on Russian gas could effectively limit European sovereignty," Poland's Prime Minister Donald Tusk recently said. To that criticism, Berlin replies that Germany has always relied on Russian gas, even when the Cold War was at its peak, and for one simple reason: half of Russia's budget comes from its hydrocarbon exports.

At a time when the German government is pondering its global responsibility, how will it handle the Ukrainian crisis? First of all, "in close coordination with its partners," as Merkel repeated last week during an address to the Bundestag. Berlin knows that Moscow would like nothing better than to see a division among European partners and the U.S. It is not a coincidence that Vladimir Putin granted asylum to Edward Snowden, whose NSA spying revelations (including the surveillance of Merkel's mobile phone) created major tensions between Berlin and Washington.

Until now, Germany has been standing together with its European partners and the United States, despite different approaches to the speed and scale of sanctions against Russia. This success is largely due to the close dialogue between Germany's Foreign Minister Frank-Walter Steinmeier and his French counterpart Laurent Fabius, as well as with Poland's Radoslaw Sikorski, though their common intervention in Kiev resulted in President Viktor Yanukovych fleeing and burst open the crisis with Moscow.

After previously being naive and giving Putin too much credit, Merkel today believes that the Russian president had lost touch with reality, as she is said to have told President Barack Obama, according to a report in The New York Times.

But 100 years after the beginning of World War I, the chancellor will be the last person to consider a military response to Putin's maneuvers. Her diplomatic efforts have so far failed, and sanctions seem to be the inevitable way forward. The duel between Merkel and Putin is only beginning.