Meanwhile, even previously agreed measures did not seem set in stone with Germany suggesting Greece's most recent bailout package may be renegotiated as argument rages over whether private creditors should take bigger losses .

December Bund futures were 30 ticks higher at 136.18. Two-year bond yields were 2 basis points lower at 0.524 percent, with 10-year yields down 4 basis points at 1.92 percent.

"We seem to be getting back in the real world, there's a lot of cracks and time isn't on the politicians' side," said a trader.

"There's a limit to how far markets can go on unfounded optimism."

Talk of proposals to leverage up the soon-to-be 440 billion euro bailout fund lifted global equities and weighed on bond markets on Tuesday.

"With speculation about another EFSF/ESM...revamp having come a long way, we feel that Bunds may have sold off too quick too far," Commerzbank strategist Marcel Bross said in a note.

Finland votes later in the day to approve proposals from earlier this year to increase the EFSF's firepower to 440 billion euros and Germany on Thursday.

Appetite for low-risk assets will be tested as Germany launches a 5-year 1.25 percent October 2016 bond for 6 billion euros, the lowest coupon on such paper since the euro was launched, according to Credit Agricole.

Grey market prices shows the new bond offering a yield pick-up of around 10 bps over the current benchmark, while the 5-yr section of the German curve has cheapened vs the 2- and 10-year portions over the last couple of weeks.

"Uncertainty in euro zone government bond markets remains high, and further flight-to-quality moves cannot be ruled out, especially if enhanced rescue plans mooted over the weekend fail to be fleshed out to the satisfaction of markets," Barclays Capital strategists said, adding it was a supportive factor for the sale.