China pledges support as Greek bailout is delayed by eurozone

The eurozone gave Greece a new ultimatum and delayed a decision on a debt rescue, but China expressed support for the euro pushing up stock markets yesterday.

The ministers called off a meeting on the rescue to avert imminent default for Greece complaining that Athens still had not fulfilled two vital conditions, with time running out for a debt restructuring.

China’s top central banker meanwhile said in Beijing that the Asian giant would help Europe by continuing to buy eurozone government debt.

The eurozone put their approval of new bailout on hold late Tuesday after Greece was still at pains to come up with an extra €325 million in budget cuts.

Eurozone leaders are also demanding written pledges from Greek politicians, who face a likely snap vote in April, that all austerity measures promised to EU and IMF creditors will be implemented no matter the electoral outcome.

“I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme,” Luxembourg Prime Minister and head of the group of eurozone finance ministers Jean-Claude Juncker said in a statement.

With the delay, previously scheduled talks in Brussels on Monday become the new deadline though government sources said that Greece will put down its assurances in a letter by yesterday.

Global markets rose in Asia and at opening in Europe encouraged by the reassurances from China.

Central Bank Governor Zhou Xiaochuan repeated remarks by Prime Minister Wen Jiabao that China was ready to get more involved in efforts to resolve the eurozone debt 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.

Wen had told EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso that China was ready to increase its participation in the effort.

Greece desperately needs the €230 billion rescue package – €130 billion in fresh loans and a €100 billion write down on privately-held bonds – to avoid defaulting on €14.5 billion in debt owed on March 20.

A government source, after a long Cabinet meeting on Tuesday, said Prime Minister Lucas Papademos would announce how he plans to come up with the €325 million “in the coming days.”

“The steps to take in the coming days and weeks are numerous and crucial” and will demand “an enormous and constant effort by the government,” Papademos warned his ministers.