Greece under fire to leave eurozone: finance minister

(ATHENS) - Greece is in great danger of being forced from the eurozone, its finance minister said on Wednesday in a dramatic admission that a debt rescue to avert bankruptcy is close to burn-out.

Evidence that Greece is fighting by the hour for its life in the eurozone despite a chaotic two-year struggle to survive was hardened by German remarks complaining of the Greek "bottomless pit."

The warning that Greece risks sinking despite massive budget cuts and a slump in living standards came from Greek Finance Minister Evangelos Venizelos.

Speaking after eurozone ministers gave him a new ultimatum on rescue conditions, and after rioting and arson in Athens on Sunday, he revealed the full force of pressures within the Eurogroup of finance ministers: "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."

In a reference to fires which gutted neo-classical buildings in the centre of Athens on Sunday, and implicitly to an increasingly hard line from countries in northern Europe, he warned against those who "play with fire, both abroad and inside (the country), some with torches, others with matches."

He declared: "In any case, the danger is great."

But he also promised to come up with the required rescue commitments by the time eurozone ministers hold a conference call, which is scheduled to take place at 1600 GMT.

"Only a few issues remain," he reassured. "They will be clarified by the teleconference."

In Germany, Finance Minister Wolfgang Schaeuble told SWR radio: "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 uphold promises, 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."

Many analysts question whether a country leaving the eurozone would be able to remain within the European Union. There are no treaty provisions to leave the eurozone while treaties do not detail procedures for leaving the European Union, although this eventually is allowed in the Lisbon Treaty.

Eurozone finance ministers switched a planned meeting Wednesday for a conference call after they did not received details on two conditions they had demanded for approving a second rescue of 130 billion euros ($173 billion) tied also to a debt write-off by private banks.

The eurozone is demanding that Greece come up with a promised extra 325 million euros in budget cuts.

Eurozone leaders are also demanding written pledges from Greek politicians, who face a snap vote in April, that whoever wins the election will enact budget reforms.

Greece's government coalition party leaders sent those letters on Wednesday, their parties said.

In his letter, conservative leader Antonis Samaras said his party would "remain committed to the objectives, targets and key policies" described in the economic recovery programme agreed with the EU, International Monetary Fund and the European Central Bank if it wins snap elections expected in April.

Polls put the conservatives in the lead.

Time to reach a deal is running out because the technical procedures to restructure debt under the banking write-down take time and Greece must redeem nearly 14.5 billion euros of debt on March 20.

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 when those bonds come due.

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, wants total commitment.

Eurozone finance ministers, which must sign off on the rescue funds and the private sector writedown, are next scheduled to meet on Monday.

Meanwhile, with new economic data showing the eurozone edging closer to recession with a 0.3 percent drop in the fourth quarter last year, the single currency bloc got a boost from China's top central banker who said his country would help by continuing to buy eurozone debt.

The reassurance from China buoyed Asian and European markets.

Central bank governor Zhou Xiaochuan repeated remarks by Premier Wen Jiabao that China was ready to help solve the eurozone crisis, which is hitting demand for its exports.

At Forex.com in London, analyst Kathleen Brooks commenting on a firm showing by eurozone stocks and bonds, said: "First, everyone believes the Greek bailout negotiations will go down to the wire but that a deal will be reached.

"Secondly, the prospect of Greece leaving the Eurozone is no longer such a taboo subject and the Eurozone could survive without Greece in it."