Germany and the chairman of the group of countries using the euro ruled out immediate financial aid for Greece before talks on Friday with Prime Minister George Papandreou.
Greece's hopes of solving its debt crisis got a boost when it attracted heavy demand for the sale of an important bond issue on Thursday, but an opinion poll on Friday showed the government faces stiff opposition to planned austerity measures.
The European Union and European Central Bank have praised the proposed new pay cuts, pension freeze and tax increases.
But Greece's biggest public and private sector unions called a new strike for March 11 and Athens faced a fresh call from a senior ECB member for the steps to be closely monitored. Papandreou hoped to win support at talks in Luxembourg with Prime Minister Jean-Claude Juncker, chairman of the 16-country Eurogroup, and at talks in Berlin with German Chancellor Angela Merkel, who leads the EU's biggest economy.
Greece really has to do something. Greece is doing that now, Juncker told Deutschlandfunk radio.
If all this were not to suffice, the euro zone would be ready to guarantee the financial stability of the euro area but I do not expect that to be necessary, he said. Merkel said the bond issue raised optimism for further measures and described it as a good sign, underlining that Germany should stand at Athens' side. A spokesman for the German chancellor said her meeting with Papandreou would be about offering political support and not financial aid.
German Economy Minister Rainer Bruederle said each EU member state was responsible for its own affairs and Athens had to implement its austerity plan effectively. The German government does not intend to give a cent, he said.
The crisis threatens the credibility of the euro and, despite Eurogroup reluctance to provide financial assistance, it wants to avoid Greece turning to the International Monetary Fund for help because doing so could be seen as weakness.
BOND SALE BOOST
Athens needs to borrow 53 billion euros ($72 billion) this year -- at least 20 billion of it by the end of May -- to repay existing debt and cover its huge budget deficit.
A day after announcing 4.8 billion euros of austerity steps for 2010 to reduce its budget deficit, Thursday's 5 billion euro 10-year syndicated bond was more than three times oversubscribed.
The bond sale tested investors' belief that the steps can be effective. Greece's debt agency chief said most of the bond deal was placed outside Greece, showing foreign investors' readiness to buy Greek debt at high yields.
The Greek/German 10-year bond yield spread edged up to 303 basis points from 299 basis points at Thursday's European settlement close.
At 0859 GMT on Friday, the Bund future was up 3 ticks at 124.32. The 10-year German bond yield was 3.123 percent, up 1 basis point while the two-year Schatz yield was all but flat at 0.877 percent.
Merkel's cautious approach, and even greater hostility from her Free Democrat (FDP) coalition partners, has stoked tensions with Greece. Some Greek lawmakers have demanded Germans pay reparations for the Nazi occupation.
But leaving Greece to fend for itself could unnerve markets further. Athens' troubles could then spread to other euro zone states such as Spain or Portugal -- a scenario that would deepen the crisis in the euro zone.
The Greek government also faces strikes and protests over the austerity measures.
Private sector union GSEE announced a strike for March 11 and public sector sister union ADEDY said public workers would also stop work that day. The two unions represent about 2.5 million workers, half of Greece's workforce.
An opinion poll carried out by Public Issue for Skai TV showed about three-quarters of 530 people surveyed in Greece disapproved of the higher taxes on fuel, VAT increases, a freeze on public pensions and cuts in bonuses for civil servants.
But 50 percent backed bigger salary cuts for public service workers, 65 percent supported higher duty on alcohol and cigarettes and 82 percent approved of a levy on luxury goods. Seventy-eight percent believed there was a high probability that all the government's moves would be implemented.
Underlining continuing uncertainty over Greece's ability to carry out its promises, European Central Bank member Mario Draghi said the new measures would need to be monitored so that they were successful and long lasting.
Of course, we need now to monitor their implementation to ensure that this success stands throughout in the future, he told reporters.
(Additional reporting by Angeliki Koutantou and Lefteris Papadimas in Greece and by Paul Carrel in Berlin; writing by Timothy Heritage; editing by Janet McBride)