ATHENS - Europe came close to catastrophe as the talks between Greece and its creditors for a new bailout deal last weekend almost failed, European Council chief Donald Tusk said in an interview with a Greek newspaper published on Friday.
After 17 hours, the two sides finally struck a deal in the early hours of Monday morning, staving off financial meltdown in Greece and a likely exit from the euro zone currency bloc.
Tusk said German Chancellor Angela Merkel and Greece's Prime Minister Alexis Tsipras had haggled over how much money from a Greek privatization fund would be earmarked for investment.
"During the negotiations, around 0700 in the morning, when Tsipras and Merkel asked for a break, I felt that the risk that they would fail was very close," Tusk told Kathimerini.
"At that time their difference was only 2.5 billion euros," he said. "It was at that point that I told them that if the negotiations had ended without a result, I would have been ready to announce publicly that Europe was close to catastrophe for 2.5 billion euros."
Europe has moved to reopen funding to Greece after the parliament in Athens approved a new bailout program in a fractious vote that left the government without a majority. The European Central Bank increased emergency funding for Greek lenders, although capital controls will have to remain in place to avoid a run on the banks when they reopen on Monday.
Plans for a new bailout are expected to be approved in the German Bundestag on Friday, despite mounting opposition by Greece's biggest creditor to giving Athens more money. "The most important thing in the negotiations was to help Greece. However, we had to discuss the medium and long-term consequences of a Grexit as a chaotic and unpredictable procedure with political and geopolitical impact," Tusk said.
"It was a necessary solution to avert the risk of immediate chaos and default but it's just the first step," he said.