Chancellor Angela Merkel’s government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds, according to two people familiar with Germany’s position.

While the Germans still insist on a package of steps that includes higher taxes, state asset sales and less generous retirement benefits, they may settle for a clear commitment by the Greek government to a measure up front to unlock aid, said the people, who asked not to be identified discussing the government’s negotiating stance.

With Greece’s aid program set to expire on June 30 and no deal in sight, the comments reflect more German flexibility than the government’s public statements. Merkel and French President Francois Hollande may hold talks with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit on Wednesday to try to break the impasse.

“Where there’s a will, there’s a way,” Merkel told reporters as she arrived in Brussels. “The goal is to keep Greece in the euro area.”

Merkel says Greece must honor an accord struck with its euro-area partners in February that gave Tsipras an extra four months to carry out economic reforms needed to unlock its final aid installment of 7.2 billion euros ($7.6 billion). The chancellor hasn’t spelled out details of a possible deal in public and said that whatever measures Tsipras undertakes, they have to “add up” to make Greece’s debt load sustainable.

David Fuller's view

If anyone thought Greece might not be very important for not only the European Union but also confidence in the global economy, today’s upward dynamics by many stock market indices around the globe suggest otherwise. 

Yes, Greece produces only a tiny proportion of the EU’s total GDP but it has approximately €320bn of debt, according to Bloomberg, which is now mainly held by the ECB, IMF and Greek banks.  Moreover, the prospect of a moderately successful ‘Grexit’ would invite endless speculation within the EU concerning who’s next?

Within the Eurozone, Italy and Germany had the biggest upward dynamics today in rallies of 2.5% and 2.4%, respectively.  Upside follow through on Thursday would provide additional evidence that lows of at least near-term significance had been achieved.  Closes beneath Tuesday’s lows would be required to indicate deeper corrections and offset current scope for further recoveries. 

(See also this video: Idea of a ‘Grexit’ Is Unrealistic: Piccoli, featuring Wolfango Piccoli, Roger Bootle and Bloomberg’s Guy Johnson, plus this article: If You Think Greece’s Crisis Will End Soon, Think Again)