LONDON (Reuters) – EU foreign ministers will gather tomorrow for an emergency meeting in Luxembourg to try to overcome Austria’s contention that talks should spell out an explicit alternative to full membership. Turkey insists on full membership as the only option for what will amount to an over 10-year accession process. The vast majority of analysts and investors believe Turkey and the EU will come to an agreement on the negotiating framework in time to meet the Monday start time. Merrill Lynch’s emerging market economist and strategist Mehmet Simsek believes the talks will in fact start on time, but he does not believe Turkey is unwilling to walk away either. «Looking at recent treasury roll-over ratios, Ankara seems to be building up cash reserves against an unlikely worst-case scenario. Therefore we don’t think Turkey is bluffing when it says it will walk away if red lines are crossed.» «There is a risk but we think it is highly likely that a compromise will be made at the meetings that is acceptable to both the EU-25 and Turkey,» Simsek said. Simsek also said the market is having a difficult time trying to price in the impact of a worst-case scenario, calling estimates of the impact on Turkish assets «arbitrary» due to what he believes is the unlikely failure of the talks. Even if the talks were to fail, analysts say Turkey’s improving macroeconomic conditions has increased its resilience to external shocks. Financial markets are unlikely to react dramatically if European Union foreign ministers fail to agree on terms for opening membership talks with Turkey, a senior IMF official said in Brussels yesterday. «I would not expect something dramatic in markets hinging on this (tomorrow’s) decision,» the head of the IMF’s European department told journalists. «There would be a negative effect on the lira and bonds, but in our view it would not be disastrous,» he added.