Guests from the worlds of business and politics waited for more than an hour last Monday night at St. Petersburg's Yusupovsky Palace wondering if the Russian president would make an appearance. Officials at Nord Stream AG had gathered to celebrate the 70th birthday of former German Chancellor Gerhard Schröder, head of the shareholder committee of the company, which operates a natural gas pipeline between Russia and Germany.

The Kremlin had indicated that Vladimir Putin would be late because of events relating to the Ukraine crisis and possibly wouldn't be able to make it at all. But then his limousine pulled up -- and Schröder was there immediately to greet the president. The ensuing embrace couldn't have been more heartfelt.

The photo quickly made its way through the media. The West has done all it can to censure Putin since Russia's annexation of Crimea: His invitation to the G-8 summit was rescinded and he is no longer a welcome guest in European capitals. The US and EU also imposed travel bans on his closest associates. The message sent by Schröder in St. Petersburg, however, was that Putin isn't really isolated as it seems and that the West is divided. It was precisely the impression that the German government had sought to avoid last week.

In Angela Merkel's Chancellery, officials are convinced that the only way Moscow can be swayed by way of a united trans-Atlantic front. That's the reason Merkel said little about the NSA affair  during her visit to Washington last week and instead drew a new red line for Putin together with President Barack Obama. In the event that Russia sabotages Ukraine's planned national election on May 25, the two agreed, further economic sanctions will be applied against Moscow.

In addition, German Foreign Minister Frank-Walther Steinmeier traveled to the Baltic countries and contacted his Polish counterpart Radoslaw Sikorski. European cohesion is his top priority: Putin must see that the West is united in its stance against Russian aggression.

With his embrace, Schröder thwarted precisely these policies and also created considerable difficulties for Steinmeier.

Evidence of the SPD's Russia Sympathies?

Some political observers abroad consider the former chancellor's behavior to be evidence that Germany's center-left Social Democratic Party, to which Steinmeier belongs, still hasn't abandoned its traditionally pro-Russian policies. Schröder's decision to meet with Putin and "embrace him in a bear hug sent an unacceptable signal that some prominent Europeans are willing to ignore Mr. Putin's brutish ways," the New York Times wrote in an editorial . "Schröder's appearance will have political consequences," Chancellery sources in Berlin said, expressing their concern.

This doesn't apply exclusively to foreign policy either. The diplomatic task facing Steinmeier is not only to maintain European cohesion during the Ukraine crisis, but also to prepare his own party for a new political course. Dialogue may soon have to be replaced by painful sanctions.

Within the core of the SPD, there is little understanding for taking a tougher approach to Moscow. Much of the criticism from the party's grass roots is instead being directed at the United States. "There are many within the party who share Schröder's view of Russia," says one member of the SPD's national committee. "The appearance didn't do Steinmeier any favors."

Steinmeier has had to modify the pro-Russian stance he held prior to the outbreak of the latest crisis in Ukraine. For seven years, he served as Schröder's closest confidant as chief of staff of the Chancellery. During his first term as foreign minister, from 2005-2009, he declared a strategic partnership with Moscow -- a move for which he was labelled naive and uncritical by many in Eastern Europe and the United States. Schröder's meeting with Putin has also sowed doubts in both of those regions about whether Steinmeier has in fact altered his position.

The foreign minister remained fittingly tight-lipped in his own remarks about his friend's appearance in St. Petersburg. "Mr. Schröder isn't part of the government," Steinmeier said, and it is his choice as a private citizen to decide with whom, where and when he wants to celebrate his birthday.

But the meeting in St. Petersburg wasn't completely private. In addition to Putin, the official portion of the celebration was also attended by the German Ambassador to Russia Rüdiger Freiherr von Fritsch, the German consul general in St. Petersburg and E.on board member Bernhard Reutersberg. Schröder greeted the Russian president with the words: "Even when there are differences of opinion, friendship remains."

A Conundrum for the SPD

Putin answered with a 20-minute birthday speech, speaking German at great length. Some of the Germans present said he sounded like a man cornered by the West and pursued by the US.

He also spoke with Fritsch, who explained Berlin's position to him, before heading to a restaurant with Schröder and a handful of other guests including Philipp Missfelder, the foreign policy spokesman of Chancellor Angela Merkel's Christian Democrats, former Hamburg Mayor Henning Voscherau and some industry representatives. Over a dinner of fish and crab, they spoke about the crisis in Ukraine and the captivity of seven OSCE observers at the hands of pro-Russian separatists. It was geo-politics in miniature.

One day later in Minsk, Putin said that he hoped the OSCE observers would soon be released. And the hostage-takers in Slovyansk seemed suddenly prepared to abandon their demands that separatists held by Ukrainian authorities be released in exchange.

SPD criticism of Schröder's St. Petersburg birthday party has been muted. SPD floor leader Thomas Oppermann said last week that he is certain Schröder did what he could to secure the release of the OSCE hostages.

Foreign Minister Steinmeier, also of the SPD, has tried to keep his own relationship with the former chancellor out of the public debate. The Foreign Ministry said in a statement that Steinmeier had not met with Schröder either before or after his meeting with Putin. Given Berlin's own efforts to secure the hostages' release, that is astounding. A brief meeting to find out what Putin had to say about the incident would have made sense. And it isn't as though Steinmeier doesn't speak with Schröder. The two have spoken several times since the Ukraine crisis got underway.