Greece’s government may request an extension of its loan agreement for six months, according to a person familiar with the matter, a step that could ease a standoff with creditors over the country’s future financing.

Prime Minister Alexis Tsipras’s government intends to make the request Wednesday, the person told reporters in Brussels, asking not to be named as the deliberations are private. Talks are continuing between Greece and its creditors on the conditions that would be attached to the extension of the loan accord, the person said.

While Greece’s creditors in the euro area indicate that there may be some room for flexibility within the margins of the current rescue program for Tsipras’s government to pursue its policies, they insist that Greece first agree to extend the agreement. A request for an extension, albeit with the terms still unclear, might help break the deadlock that prompted talks to collapse early Monday.

“If we want to avoid going into unknown territory, the only way is to have some time and some tranquility,” French Finance Minister Michel Sapin told reporters in Brussels Tuesday. “That means the prolongation of the program. It’s the only legal tool available.”

U.S. Treasuries extended declines on the news as demand for haven assets eased, pushing 10-year yields up seven basis points to 2.12 percent. The euro advanced 0.5 percent to $1.1415.


–With assistance from Nikos Chrysoloras in Athens and Anchalee Worrachate in London.

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