The budget situation in Greece is "tense" but the country should avoid bankruptcy, Jean-Claude Juncker, the president of the eurogroup, which unites the 16 countries that share the euro, said on Thursday.
Speaking at a meeting of centre-right EU leaders from the European People's Party, Juncker said of the crisis in Greece, a eurozone country: "The budgetary situation is very tense, that's the least you can say."
Juncker, who is also prime minister of Luxembourg, said: "I totally exclude a state bankruptcy in Greece."
Greece's sovereign debt was downgraded on Tuesday by the international ratings agency Fitch, prompting financial market jitters amid a collapse in confidence in the Greek economy.
Internal eurozone worries are now beginning to extend to Ireland and Spain, which have each received warnings from the ratings agencies. Standard and Poor's has also since cast doubts over Portugal's prospects.
The affair has put significant downward pressure on the euro in the international foreign exchange markets.
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