EU's Jean-Claude Juncker pledges bailout only if Greece's own measures fail

The eurozone will guarantee the currency's stability if Greece cannot rescue itself from financial disaster, Eurogroup chairman Jean-Claude Juncker said today.

Juncker, who chairs meetings of eurozone finance ministers, stated his belief that Greece's economic would succeed, but said aid for Athens from German taxpayers could not be ruled out.

"It remains the case that Greece must get itself out of this self-indebted situation. Greece really has to do something. Greece is doing that now," he told German radio.

"If all this were not to suffice, the eurozone would be ready to guarantee the financial stability of the euro area but I do not expect that to be necessary because I want to expect the financial markets to register that the Greek government is goal-orientated and acting appropriately," he said.

There was strong demand for a Greek bond issue yesterday, but the country paid a steep risk premium that underscored its plea to the European Union for support to help lower its borrowing costs.

Juncker's comments were in line with the carrot and stick approach taken by European policymakers in recent weeks, saying Greece must do more to solve its own problems but would not be abandoned, while stopping short of promising direct aid.

"There is a European solidarity with Greece - at least in the eurozone - a solidarity that can be activated if the financial markets were not to acknowledge that the Greek government is acting systematically," Juncker said. "The Greeks won't be left alone."

Asked if solidarity meant financial aid, he replied: "No, we're not doing that. We are just saying to the financial markets: Pay attention, we're not leaving the Greeks alone,' and we're not giving the Greeks the impression that we will simply pass money across the table."