BRUSSELS: European leaders insisted yesterday that their imminent third attempt in as many weeks to unblock bailout funds for debt-stricken Greece will likely succeed, as Athens warned that the stability of the entire euro zone depends on it.
The euro zone is a "whisker" away from a deal to unblock the money aimed at keeping Greece from going bankrupt, French Finance Minister Pierre Moscovici said just hours after marathon talks on the aid package collapsed in Brussels.
"We are very close to a deal," he said, noting that the next emergency meeting of the Eurogroup of finance ministers from the 17 states that use the single currency would be held on Monday.
Recession-battered Greece has been waiting since June for an installment of 31.2 billion euros ($40 billion) in aid, part of a 130-billion-euro financial assistance package initially granted early this year which is tied to harsh new austerity measures.
The failed bid to reach a Greek deal came a day before the European Union was headed for fresh trouble at a summit called to try and agree a hotly-contested trillion-euro budget.
German Chancellor Angela Merkel said there was "a chance there will be a solution on Monday" on Greece.
But she warned there would not be "one action, one solution in one fell swoop, one truth" to resolve the three-year crisis that has brought the euro zone to the brink of collapse.
Both Moscovici and Greek Prime Minister Antonis Samaras underlined the high stakes involved, warning that the euro zone would be threatened if no deal was reached.
"It's not only the future of our country but the stability of the entire euro zone which depends on the success of the conclusion of this effort in the next few days," Samaras said in a statement.
A source close to the failed overnight talks — also attended by International Monetary Fund chief Christine Lagarde and European Central Bank president Mario Draghi — said it was far from certain that a deal would be clinched on Monday.
"We are really not close to an agreement," the source told AFP, noting that the negotiations were bogged down by the issue of how to ensure that Greek debt is sustainable in the medium term.
Eurogroup President Jean-Claude Juncker wants an extra two years — until 2022 — to be granted to Greece to arrive at a point where it can raise its own funds on the markets.
But the IMF, which along with the ECB and the EU forms the "troika" funding the Greek bailout, is insisting on 2020 as the year when the ratio of Greek debt to output be reduced to the 120 percent of GDP mark seen as sustainable.
If that target cannot be achieved, the IMF might have to withdraw from efforts to stabilize the Greek economy as its statutes ban it from lending to a country which cannot reasonably be expected to repay its debt in the medium-term.
The IMF is thus "refusing to sign an agreement which it considers to be unrealistic," said the source who argues that a Greek deal is far from imminent.
Greece's debt burden is currently nearly 180 percent of GDP and expected to rise to 190 percent by 2014. That is about three times the EU's 60-percent limit and way beyond what the country can support, meaning it must be reduced one way or another.
The source said that the overnight talks had investigated a "patchwork of measures" to deal with Greek debt.
One route was to reduce the interest rate on loans to Greece by the euro zone and to extend the repayment period.
Several more technical arrangements had also been discussed, the source said.
"But to achieve the intended outcome, several small measures must be put together, and each of these runs into objections of various types," the source said.
Objections arose mainly from so-called "hawks" in northern Europe, the source said, pointing to Germany, the Netherlands and Finland.
By the end of 2012, Athens is also due to receive two more aid payments, worth 5.0 and 8.3 billion euros. In return, it has pledged to implement a series of unpopular austerity budget measures.
Greek deal a ‘whisker’ away despite talks collapse
Greek deal a ‘whisker’ away despite talks collapse
Gulf-EU value chain integration signals shift toward long-term economic partnership: GCC secretary general
RIYADH: Value chains between the Gulf and Europe are poised to become deeper and more resilient as economic ties shift beyond traditional trade toward long-term industrial and investment integration, according to the secretary general of the Gulf Cooperation Council.
Speaking on the sidelines of the World Governments Summit 2026 in Dubai, Jasem Al-Budaiwi said Gulf-European economic relations are shifting from simple commodity trade toward the joint development of sustainable value chains, reflecting a more strategic and lasting partnership.
His remarks were made during a dialogue session titled “The next investment and trade race,” held with Luigi Di Maio, the EU’s special representative for external affairs.
Al-Budaiwi said relations between the GCC and the EU are among the bloc’s most established partnerships, built on decades of institutional collaboration that began with the signing of the 1988 cooperation agreement.
He noted that the deal laid a solid foundation for political and economic dialogue and opened broad avenues for collaboration in trade, investment, and energy, as well as development and education.
The secretary general added that the partnership has undergone a qualitative shift in recent years, particularly following the adoption of the joint action program for the 2022–2027 period and the convening of the Gulf–European summit in Brussels.
Subsequent ministerial meetings, he said, have focused on implementing agreed outcomes, enhancing trade and investment cooperation, improving market access, and supporting supply chains and sustainable development.
According to Al-Budaiwi, merchandise trade between the two sides has reached around $197 billion, positioning the EU as one of the GCC’s most important trading partners.
He also pointed to the continued growth of European foreign direct investment into Gulf countries, which he said reflects the depth of economic interdependence and rising confidence in the Gulf business environment.
Looking ahead, Al-Budaiwi emphasized that the economic transformation across GCC states, driven by ambitious national visions, is creating broad opportunities for expanded cooperation with Europe.
He highlighted clean energy, green hydrogen, and digital transformation, as well as artificial intelligence, smart infrastructure, and cybersecurity, as priority areas for future partnership.
He added that the success of Gulf-European cooperation should not be measured solely by trade volumes or investment flows, but by its ability to evolve into an integrated model based on trust, risk-sharing, and the joint creation of economic value, contributing to stability and growth in the global economy.
GCC–EU plans to build shared value chains look well-timed as trade policy volatility rises.
In recent weeks, Washington’s renewed push over Greenland has been tied to tariff threats against European countries, prompting the EU to keep a €93 billion ($109.7 billion) retaliation package on standby.
At the same time, tighter US sanctions on Iran are increasing compliance risks for energy and shipping-related finance. Meanwhile, the World Trade Organization and UNCTAD warn that higher tariffs and ongoing uncertainty could weaken trade and investment across both regions in 2026.
