Juncker warns not to underestimate Cyprus financial problem

Cyprus could cause wider problems for the euro zone if a bailout for the country is not agreed soon, said Jean-Claude Juncker, who stepped down as chairman of the euro zone`s finance ministers group last week.

"One should not underestimate the Cyprus problem," the ex-Eurogroup head told Austria`s Kleine Zeitung in an interview published on Wednesday.

"If we don’t definitively solve the problem case of Cyprus, there is a contagion risk even from this very small national economy," he said. "Time is pressing on."

Asked whether Cyprus could ever repay the 17 billion euros it is estimated to need, Juncker said: "It will be an enormous challenge for both Cyprus and the euro zone”.

But he said there were limits to what Europe should be prepared to do to help Cyprus. "I don`t believe that Greece was worth saving at any price and in the case of Cyprus we will also not tolerate a bailout at any price. But we must negotiate."

Juncker handed over the chairmanship of the Eurogroup, which he had headed since 2005, to Dutch Finance Minister Jeroen Dijsselbloem last week.