Greek Eurozone Membership 'on a Knife-Edge'

(Newsmax) Membership of Greece in the eurozone was thrown dramatically centre stage on Wednesday with the Greek finance minister saying some countries wanted it out and Germany complaining of "a bottomless pit." The two statements amounted to the clearest evidence yet that Greece is fighting for its life in the eurozone after finance ministers issued another ultimatum late on Tuesday on a debt rescue to avert imminent Greek default. In Athens, Greek Finance Minister Evangelos Venizelos declared: "The country is on a knife's edge." He said: "We have to tell the Greek people the truth ... There are several (eurozone countries) who no longer want us." But the Greek government assured on Wednesday that it would meet the conditions by the end of the day. In Germany, Finance Minister Wolfgang Schaeuble told SWR radio: "We want to do everything we can to help Greece ... we can help but we are not going to pour money into a bottomless pit." Expressing doubts that the Greek government to emerge in coming elections would enact promised reforms, he said: "We have always said that all conditions must be fulfilled before we can take final decisions and that the time was pressing. "I have doubts that all conditions have been fulfilled." Eurozone finance ministers said they still had not received details on two conditions they have demanded for approving a second rescue of 130 billion euros ($173 billion) tied also to a debt write-off by private banks. The hours are running out because the technical procedures to restructure debt under the banking write-down take time and Greece must redeem 14.5 billion euros of debt on March 20. Eurozone finance ministers have set deadline after deadline for acceptance of conditions on the second rescue by the European Union and International Monetary Fund. Having abandoned a meeting due late on Tuesday, they were to confer later on Wednesday but their next meeting is set for Monday. Meanwhile, with new economic data showing the eurozone edging closer to recession, the single currency bloc got a boost from Beijing as China's top central banker said his country would help Europe by continuing to buy its debt. The eurozone put their approval of a new bailout on hold late on Tuesday because Greece had still not come up with an extra 325 million euros ($425 million) in promised budget cuts. Eurozone leaders are also demanding written pledges from Greek politicians, who face a snap vote in April, that all austerity measures promised to EU and IMF creditors will be implemented whatever the electoral outcome. Greece needs the 230-billion-euro rescue package -- 130 billion euros in fresh loans and a 100-billion-euro write down on privately-held bonds -- to avoid defaulting on March 20. Luxembourg Prime Minister Jean-Claude Juncker, head of the group of eurozone finance ministers, decided to switch Wednesday's meeting to a conference call among finance ministers. "I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme," Juncker said. The Greek parliament approved 3.2 billion euros in cuts on Sunday despite riots in the streets of Athens, but the eurozone, exasperated by unfulfilled promises in the last two years of crisis, wants more proof of Greece's commitment to reform. The scheduled talks in Brussels on Monday are now the new deadline although government sources said that Greece will give its assurances in a letter by Wednesday. A government source, after a cabinet meeting on Tuesday, said Prime Minister Lucas Papademos would announce how he plans to come up with the 325 million euros. The long-term sustainability of Greece's debt is also at the heart of the debate. The eurozone wants to ensure that the bailout deal will reduce Greece's debt burden, from 160 percent of gross domestic product to 120 percent in 2020. Some countries say the threshold could be eased but others insist that the 120-percent target must be met, according to a source close to negotiations. The eurozone's outlook became bleaker on Wednesday as fresh data showed the its economy shrank by 0.3 percent in the fourth quarter, a clear sign the 17-nation bloc was heading towards recession in 2012. Germany, the single currency area's biggest economy, saw its gross domestic product shrink by 0.2 percent in the fourth quarter of 2011. By comparison, Greece's economy shrank by 7.0 percent in the fourth quarter of 2011 compared with the same period a year earlier. But the reassurances from China buoyed Asian and European markets. Central bank governor Zhou Xiaochuan repeated remarks by Premier Wen Jiabao that China was ready to get more involved in efforts to solve the eurozone crisis, which is hurting demand for its exports. "As Premier Wen Jiabao said yesterday at the China-EU summit, China will... continue to invest in European government bonds and will continue... to get more involved in solving the European debt crisis," Zhou said.