Eurozone finance ministers have put a new Greek bailout on hold, saying the country has failed to meet conditions set by lenders.The ministers were due to meet Greece's finance minister in Brussels on Wednesday (local time), but will hold a conference call instead.
Luxembourg prime minister Jean-Claude Juncker, head of the group of eurozone finance ministers, says further work is needed to find Greek budget cuts.
"I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program," he said in a statement.
He said "further technical work" was needed between Greece and EU and IMF auditors "in a number of areas" including finding the extra 325 million euros ($400 million) of savings and finishing an analysis of the sustainability of Greece's debt.
Eurozone finance ministers will instead prepare for previously scheduled talks in Brussels on Monday.
Greece desperately needs the 230 billion euro ($283 billion) rescue package - 130 billion euros ($160 billion) in fresh loans and a 100 billion euro ($123 billion) write down on privately-held bonds - to avoid defaulting on 14.5 billion euros ($18 billion) in debt owed on March 20.
The eurozone wants to ensure the bailout deals will drastically reduce Greece's debt burden, from 160 per cent of gross domestic product to 120 per cent in 2020.
The enormous problems confronting Greece were illustrated by new data showing the economy, in recession for a fifth year, shrank by 7 per cent in the fourth quarter of 2011 compared with the same period a year earlier.
The Greek parliament approved 3.2 billion euros ($4 billion) in cuts on Monday despite protests and riots in the streets of Athens, as Greek workers were hit by a 22 per cent cut in the minimum wage.
But eurozone partners, who no longer trust Athens after the country failed to live up to past promises, want a commitment to austerity in writing from politicians who face an election in April.
A Greek government spokesman said Athens will put down its assurances in a letter that a source in the finance ministry said would be ready by Wednesday (local time).
Luxembourg finance minister Luc Frieden cranked up the pressure, warning that if Athens failed to deliver, then the eurozone will move on without it.
"Our preferred scenario is Greece complying, the eurozone giving additional funds and - I cannot insist enough on this aspect - clear monitoring of the implementation of what Greece has promised to do," he said on Monday (local time).
"If they don't do all this, I think then we must go on with 16 countries."
Other hurdles remain before Greece can secure bailout funds as the German and Dutch parliaments separately need to approve it, with Berlin's vote scheduled for February 27.
Europe has been looking for outside help to resolve the debt crisis.
Chinese premier Wen Jiabao told EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso in Beijing that China was ready to increase its participation in the effort.
Mr Wen said he wanted to see Europe - China's biggest trading partner - "maintain stability and prosperity," a day after ratings agency Moody's downgraded Italy, Spain and Portugal.