Greece Rescue Hopes Fueled By Possible Loan Guarantees

Germany is considering loan guarantees for Greece and other troubled European countries, the Wall Street Journal reported, fueling hopes that the EU will work out some kind of rescue plan for debt-strapped Greece.

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Germany's Finance Ministry has reportedly been in discussions on such a plan with the head of the European Central Bank, Jean-Claude Trichet, and may be looking to take a lead position in debt guarantees for Greece, the Journal said.

A final decision may not come this week, however, the WSJ said. The ECB declined to comment.

Reuters reported earlier on Tuesday that major European governments had agreed in principle to aid Greece. Various options were under consideration and no final decision had been taken, but the most likely possibility was to offer "bilateral help,'' the source said.

But German government spokesman Ulrich Wilhelm quickly called the report "unfounded,'' causing markets to falter briefly. Read more

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Traderone: Read the denial. Well I guess the market needs to find a reason for its technical rebounce. Further more it is not just Greece that they need to address.