Source: Australian Broadcasting Corporation

MARK COLVIN: It may seem hard to believe after all the brinkmanship, but the Greek crisis may finally be drawing to an end.

The current president of the European Union, Donald Tusk, says the end of this week is a real deadline for Greece to propose a real deal to keep the country in the euro.

He said otherwise the Greek state could go bankrupt and its banks become insolvent.

All eyes will be on Brussels on Sunday for what may be the last round of this long-drawn-out crisis.

Pierre Vimont is senior associate at Carnegie Europe and France's former ambassador to the EU.

I asked him if it finally came down to Greece leaving the Eurozone - could it still stay in the European Union itself?

PIERRE VIMONT: If Greece has to leave the leave the Eurozone, which again, I think everybody would like to avoid, but if that was the case, of course it would leave bad blood on the table, and the relationship with Greece will not be all that easy afterwards.

MARK COLVIN: It would also, surely there would also be huge practical problems because the European Union means freedom of trade and freedom of labour movement and so forth and if their currency is completely collapsed and their banking system is cut off, all of that would be extremely difficult.

PIERRE VIMONT: Now it would be difficult, you're absolutely right, we will be in a financial and economic situation that would, that would need to be looked at and this would take time.

But of course we have already a situation where we have countries, think about Great Britain, that is part of the single market but not part of the Eurozone, so we could live with that, but the real...

MARK COLVIN: Yes but the United Kingdom hasn't got a collapsing currency and a collapsing economy.

PIERRE VIMONT: Exactly, exactly, no no, you're right, and this is really the main point, and you know, every day where we can't find a solution increases Greece's economic turmoil.

We've heard about the banks, but it's not only the banks now it's even food in the market, medical supplies and so forth, and even the industry and all the business community that is facing major difficulties today because the whole economy can't be supported by the necessary financial resources, so this cannot last too long.

MARK COLVIN: Doesn't it come down though to two possibilities: one is that, and it always has, that the creditors take an enormous haircut, as they say, or the other is that Greece really becomes a failed state on the southern edge of the European Union.

Neither is really palatable to the EU.

PIERRE VIMONT: Yes, in fact you have three types of issues we're facing now at the moment: one is short-term support, you know, how to come over the next few days and help the banking sector to move again.

The second one is the longer-term financial issue, which is how do we deal with the new bailout and how do we deal with what should be in the end what you were saying, which is some sort of restructuring of the Greece, of Greece debt, and the third one, maybe the most important one we never discuss really, is how to help the Greek economy to find a way out of this crisis and to find a growth model and a business model that they have never found so far.

It means that Greece needs to find - inside its own economic system - resources and new ways of moving ahead and finding growth again.

This is a country that has been mostly living off public expenditure and people living way out of their normal means thanks to the very low interest rate that was given to them by the European Economic Union, but this cannot last.

Now we need to find a more solid base for the economic growth of Greece in the next few years.

MARK COLVIN: From this perspective, on the other side of the world, it has sometimes seemed in the last few weeks like we were watching the approach of a slow-motion train crash, and nothing really could have been done to avert it.

Has all of this been inevitable, ineluctable, all along?

PIERRE VIMONT: I think to some extent we were all hoping that this could be avoided, you know, this discussion has been going on now for four or five months, and everybody is somewhat surprised that there was no possibility to come earlier on with an agreement.

The truth is what we have seen yesterday has been another example of how things have been badly managed.

We were all hoping that by yesterday the Greek authorities would come up with a plan to put it in simple terms, and we had some indication from the meeting yesterday that this would be precisely the case.

We have discovered unfortunately through the meetings that have taken place yesterday that this was not the case.

So everybody has agreed to give a few more days, but now we're coming to the end of it and I think what is most striking now is that there is a new school of thought now here in Brussels, whereby some people are saying maybe it would be better for all of us to put an end to it and to have Greece coming out of the Eurozone, whereas a few days ago everybody admitted that this was a very risky option and that maybe we should try to avoid that at all costs.

MARK COLVIN: Pierre Vimont, senior associate at Carnegie Europe and former French ambassador to the EU.

This broadcast was originally aired on the Australian Broadcasting Corporation’s PM.