Greece and Ukraine have something in common: They could both sink the euro zone

LISBON, Portugal — Europe's twin nightmares have collided this week, forcing the continent's leaders into desperate efforts to head off the risk of wider conflict with Russia and a breakup of the euro zone economic bloc.

Russian forces and their local allies have pushed ahead with a land grab in eastern Ukraine, in defiance of a cease-fire agreement. With concern growing, senior officials are now talking openly of the risk of conflict between Russia and the West.

"I believe the Russians are mobilizing right now for a war that they think is going to happen in five or six years," the US Army's commander in Europe Lt. Gen. Ben Hodges told the Wall Street Journal last week.

Anders Fogh Rasmussen, who stepped down as NATO's secretary general in October, warns there's a "high probability" Russian leader Vladimir Putin will soon test the alliance's collective defense commitments by intervening in the Baltic States.

"This is not about Ukraine. Putin wants to restore Russia to its former position as a great power,” Fogh Rasmussen told London's Daily Telegraph newspaper.

British diplomats warn Russian defense planners have lowered the threshold for using nuclear weapons — and are seeking to intimidate the West with unannounced flights over Europe by nuclear-armed bombers.

Against that background German Chancellor Angela Merkel has relaunched a peace initiative to halt fighting in Ukraine. She's met Putin, US President Barrack Obama and Ukrainian President Petro Poroshenko in the past few days.

On Wednesday, she hopes to bring Putin and Poroshenko together with herself and French President Francois Hollande for talks in Minsk, Belarus, where the last ceasefire was signed in September.

“If we don’t manage to find not just a compromise but a lasting peace agreement, we know perfectly well what the scenario will be. It has a name, it’s called war,” Hollande cautioned over the weekend.

House of cards

Obama said Monday the US will consider sending arms to Ukraine's embattled armed forces if peace talks fail, a move Merkel fears will bring a dangerous escalation of the crisis.

The German leader is also central to hopes of defusing the other looming threat to Europe's established order: Greece.

Germany is leading resistance to efforts by the new Greek government — led by the radical left SYRIZA party — to get a new deal from its international creditors that will allow it to abandon six years of austerity policies it blames for miring the country in a deep economic depression.

If Greece fails to strike a compromise with Germany and its other euro zone partners, the country could be forced out of the currency bloc. Many fear the long-dreaded "Grexit" could trigger a wider euro zone unraveling.

"The euro is like a house of cards. If you pull away the Greek card, they all come down,” Greek Finance Minister Yanis Varoufakis told Italian TV on Sunday. He warned that Portugal and Italy could be the next to fall.

“Do we really want Europe to break apart?" Varoufakis asked. "Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous."

Europe's double crises are linked.

The new government in Greece has made no secret of its sympathies with Russia. It could block tougher EU or NATO measures over Ukraine.

For the first time since its election on Jan. 25, the Greek government on Monday raised the prospect of turning to Russia for economic help if it cannot get a deal from the EU.

"If we see that Germany remains unbending and wants to blow Europe apart, then we have the obligation to go to Plan B," said Defense Minister Panos Kammenos. "Plan B is to get funding from another source."

He suggested that other source could be the United States, China, or Russia. While there is little sign of Washington or Beijing stepping forward, Russia's Finance Minister Anton Siluanov has announced Moscow is open to an aid request from Athens.

Greece's Foreign Minister Nikos Kotzias is heading for talks in Moscow on Wednesday, on the eve of the European Union summit in Brussels that will debate the Greece and Ukraine crises.

Euro zone finance ministers are also set to meet at EU headquarters in Brussels to discuss Greece's proposals for a new deal. Without one, Greece could run out of money as soon as next month.

Dividing Ukraine: The best-case scenario?

There's another link between the two crises. Diplomats who accompanied European leaders in meetings with Putin before the Ukraine conflict erupted in late 2013 say he regarded the EU's disorganized and divided response to the euro zone debt crisis as a sign of weakness.

They believe that convinced him he could get away with intervention in Ukraine without fear of a muscular European response.

The EU has joined the US in imposing economic sanctions that have hurt Russia, but in recent months the Europeans have been reluctant to take tougher steps.

European nations are divided over sanctions, and there is little support for the idea of arming the Ukrainians if talks fail.

At a White House news conference with Obama on Monday dominated by Ukraine, Merkel stressed that such conflicts need a political solution.

Putin may not be convinced. His forces have over recent years imposed military solutions in Chechnya, Transnistria, Georgia and Crimea, and are pressing ahead in eastern Ukraine.

Reports from the ground say pro-Moscow forces are closing in on the key railway town of Debaltseve and are massing near the Black Sea port of Mariupol. Nobody is sure where they will stop.

Western options if Putin doesn't order a halt currently do not look dissuasive. Experts say that even if the US does authorize supplies of defensive weapons to Ukraine it could be months before they are effective on the battlefield.

Obama himself acknowledged the lethal aid being considered would not be sufficient to allow Ukraine's army to repulse a determined Russian attack.

The EU is looking at further economic sanctions, but many European nations are wary of provoking Putin with tougher action.

On Monday, EU foreign ministers delayed a plan to add just five relatively minor Russian officials to a travel and banking blacklist in order not to jeopardize this week's talks.

That means the biggest concrete threat the EU is brandishing going into the negotiations with Putin is that one of his deputy ministers may not be able to vacation in Spain or stash his cash in a Luxembourg bank.

Nevertheless, diplomats are hopeful the talks might bring a solution.

Leaked details of European proposals suggest a de facto division of Ukraine with a demilitarized line of control separating east from west. Eastern territories occupied by pro-Moscow forces would remain technically part of Ukraine but have wide autonomy.

Comparisons have been drawn with the division of Cyprus after the Turkish invasion of 1974, or the emergence of East and West Germany following World War II.

Optimistic Europeans hope that would bring peace, while over the longer term economic support from the United States and EU would see the western part of Ukraine flourish, eventually creating a re-unification movement in the east.

But it’s not certain Putin will buy into that. The Russian parliament is currently mulling a resolution to denounce the reunification of Germany in 1990 as an illegal "annexation" by the West.

At a conference in Munich over the weekend, Russian Foreign Minister Sergei Lavrov drew a direct line to Ukraine, suggesting German re-unification had less legitimacy than Moscow's takeover of Crimea last year.