NEWS

Germany warming to idea of new bailout, report says

Germany may consider abandoning a push to reschedule Greek debt early, which may pave the way for Greece to receive a new package of financial aid, The Wall Street Journal reported on Tuesday.

Still, some German officials are hoping for a short-term solution ahead of a deal that would include rescheduling later in the year, the report added.

Greece is facing a financing shortfall of around 30 billion euros, according to the report.

Berlin’s concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece’s funding needs before the indebted country runs out of cash in mid-July, the Wall Street Journal’s online edition said.

The possibility of Germany softening its stance helped the euro hit a three-week high against the dollar in Asian trading on Tuesday.

Uncertainty over whether Greece will receive the 12 billion euro aid tranche, required to meet 13.4 billion euros in funding needs in July, has caused uncertainty on financial markets.

According to Reuters, senior EU officials held unannounced emergency talks with the Greek government over the weekend. On Monday, EU officials said they were working on a package to bridge the gap in Greek public finances.

“I am quite optimistic,» the chairman of eurozone finance ministers, Jean-Claude Juncker, said after discussing further aid for Athens with French President Nicolas Sarkozy in Paris.

Juncker said a total restructuring of Greece’s massive debt was not an option, leaving the door open to some tweaking of Greece’s debt profile that might involve the private sector, as Sarkozy advocated last week.