ATHENS: Europe must remain “vigilant” against new financial challenges as it struggles to overcome the lingering effects of the debt crisis, said the European Commission’s incoming head Jean-Claude Juncker.

The day after Brussels gave the green light for a state rescue of Portuguese banking giant Banco Espirito Santo (BES), Juncker warned the recession-hit region remained vulnerable to fresh economic strains.

“I believe that we have gone a long way and we are nearing the end but we have not yet turned a corner,” said Junker during a visit to crisis-hit Greece, his first official visit to a member state since being elected as the head of the EU’s executive arm.

Brussels earlier gave the green light for a near 5.0-billion-euro ($6.7 billion) rescue plan for stricken BES in a bid to “restore confidence in financial stability” and avoid hurting the broader Portuguese economy.

Junker said the situation in Portugal remained “fragile,” adding that “we must remain vigilant ... across Europe, we could be affected by things which we cannot predict.”

The crisis at BES has shaken confidence in Portugal, which has only just emerged from a three-year EU-backed aid plan, one of several countries to be rescued when they were frozen out of international debt markets.

After holding talks with Greek Prime Minister Antonis Samaras, Juncker emphasised that member states must continue with “fiscal discipline” despite the improving outlook in financial markets.

As head of the 18-nation euro zone group of finance ministers, Juncker was crucial in negotiating two rescue packages for Greece in return for a hugely unpopular austerity program that sank the economy into a deep six-year recession.

Juncker played down the option of an outright writing off of part of the euro zone loans to Greece to make the country’s debt more manageable.

But he praised Greece as an example for debt-stricken nations like Argentina to follow, a show of support for the country where the euro zone debt crisis began.

Bailed out twice by the European Union and International Monetary Fund, Greece has sharply reversed course since nearly crashing out of the euro in 2012. But it is still expected to require further debt relief, talks on which are expected to start later this year.

Juncker’s latest comments appeared in line with indications from Greek and EU officials that Athens will likely get lower interest rates and an extension of loan maturities rather than outright write-off of debt as part of any new debt relief.

Asked whether Greek debt could be sustainable without a so-called “haircut” or writeoff, Juncker declined to go into specifics but said: “When it comes to Greece, the question you’re mentioning is not part of my meditation.”

Juncker dismissed suggestions that Greece was similar to Argentina, which is facing a new debt crisis since defaulting in 2002.

“Comparing Greece to Argentina doesn’t offer any parallel. Greece would have been a good example for Argentina to avoid the problems Argentina was not able to avoid,” Juncker said.

Greece’s fortunes have revived sharply in recent months. The country surpassed expectations and posted a budget surplus before interest payments last year, has successfully returned to bond markets for two small issues, and is expected to return to growth this year after a six-year recession.

Still, Juncker cautioned that the euro zone crisis had not fully ended.

“We have covered a huge distance but we have not yet reached the end,” he said. “Certainly, many developments, events show us how fragile the situation is not only in Greece but elsewhere. But there are also positive signs, also in Portugal.”

Juncker said he had discussed the case of Banco Espirito Santo — which Lisbon agreed to rescue — with the Portuguese prime minister and added: “We are not yet fully out of the tunnel, and I wouldn’t want to give the impression that we’ve left all the ills behind but there has been a lot of progress.”

“I fully trust Portuguese authorities that they will solve the problem they are facing in the financial sector,” he said.

Juncker, who takes office on Nov. 1, also reiterated that he would push for growth and investment in Europe as part of his new role.