Germany, which along with some other countries had resisted extra funding, is considering concessions in efforts to support the country by dropping its push for an early rescheduling of Greek bonds, the Wall Street Journal reported on Tuesday.
A recognition that Germany must lend Greece more money even without bondholders sharing the burden in the short term would help Europe overcome its impasse over the country's funding needs before it runs out of cash in mid July, the newspaper reported, citing people familiar with the matter.
The news lifted the euro to a three-week high against the dollar in Asian trading on Tuesday as the perceived risk of an immediate debt restructuring eased.
Greece took a 110 billion euro ($158 billion) rescue package from the EU and IMF last May. The risk of a default on its 327 billion euro debt reared its head because Greece has fallen short of its deficit-reduction goals.
Moves to plug a looming funding gap for 2012 and 2013 became more urgent after the International Monetary Fund said last week it would withhold the next tranche of aid due on June 29 unless the EU guarantees to meet Athens' funding needs for next year.
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 rattled financial markets.
Senior EU officials held unannounced emergency talks with the Greek government over the weekend, an EU source said. On Monday, EU officials said they were working on a package.
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