Formation of a rescue fund for Europe would not be a solution for Greece's budget crisis, Jean-Claude Juncker, head of the group of euro area finance ministers, said Tuesday.

The Eurogroup chief reportedly questioned the need to add an 'additional pillar' for euro instruments beyond the Greek crisis. He was speaking to reporters after a meeting with German Chancellor Angela Merkel. He said both of them were convinced that the European version of the International Monetary Fund is not a solution for the debt-stricken Greece.

Juncker said it is necessary to avoid a notion that the proposal of a European Monetary Fund should give possibility for countries which do not take budgetary discipline seriously. Meanwhile, Merkel said the fund must not clash with the European Union's Stability and Growth Pact. Elsewhere, French Economy Minister Christine Lagarde said the EMF should not be the current priority.

Last week German Finance Minister Wolfgang Schaeuble proposed setting up the EMF, which became a hot topic for discussion among European policymakers.