Merkel Warns Putin: You Have Failed The Peace Process, And New Sanctions Are Coming

German Chancellor Angela Merkel said Friday the G-7 nations are contemplating further sanctions on Russia amid a lack of progress toward de-escalation in the wake of the deal reached in Geneva, Switzerland, last week.

According to Bloomberg, Merkel told reporters she spoke with Russian President Vladimir Putin on Friday, and she told him she was dismayed with the lack of progress from Russia on implementing the terms of the deal. She said at this point, it was clear the Geneva accord process has "failed."

The Kremlin confirmed the telephone call, but said in a statement Putin conveyed his disappointment with the Ukrainian government in implementing the Geneva accord. The Kremlin said both leaders "underscored the importance of holding talks as soon as possible" among Russia, the European Union, and Ukraine on security for transit and supplies of Russian gas.

The U.S. and its allies have been ratcheting up their rhetoric and warning of new "costs" for Russia in the wake of its latest moves in Ukraine, with U.S. Secretary of State John Kerry giving a final warning of sorts to Moscow on Thursday night. But Merkel's blunt comments are noteworthy, as she has been the leader advocating the most cautious approach toward Russia over the Ukrainian crisis.

On the ground in eastern Ukraine Thursday, the crisis escalated, as Russia embarked on new military drills along the Ukrainian border after Ukraine said it had killed up to five pro-Russian militants. Ukraine's Foreign Ministry then gave Russia a 48-hour ultimatum to explain its military drills. Amid the escalating tensions, Ukrainian Prime Minister Arseny Yatseniuk accused Russia on Friday of wanting to start World War Three.