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Plot thickens over third bailout for Greece

Investors and euro zone-watchers were left scratching their heads Tuesday, after mixed reports on whether Europe was considering a third bailout for Greece.

On Monday, Spain's economy minister said euro zone countries were discussing a new rescue plan for the country worth between 30-50 billion euros ($33-56 billion) -- but European Union (EU) officials said there were no such talks.

Speaking at an event in Pamplona, northern Spain, Economy Minister Luis de Guindos said a third bailout would set more flexible conditions for Greece.

Read MoreDoes Greece need a THIRD bailout?

However, the plot thickened when a spokeswoman for Jeroen Dijsselbloem, who chairs the Eurogroup of euro zone finance ministers, said there was no discussion of a new rescue plan, and senior euro zone officials agreed, Reuters reported.

Greek Finance Minister Yanis Varoufakis (R) and Spanish Finance Minister Luis De Guindos Jurado (L) are seen during an emergency meeting of Eurozone finance ministers to discuss the Greece bailout program at the European Council in Brussels on February 20, 2015.
Dursun Aydemir | Anadolu Agency | Getty Images
Greek Finance Minister Yanis Varoufakis (R) and Spanish Finance Minister Luis De Guindos Jurado (L) are seen during an emergency meeting of Eurozone finance ministers to discuss the Greece bailout program at the European Council in Brussels on February 20, 2015.

That Greece desperately needs financial aid – perhaps more than is on offer - is nothing new, but talk of a third bailout comes as a surprise to some. It's only two weeks since the country's international creditors extended its second bailout for four months to give the new left-wing Greek government time to implement reforms.

Analysts reacted to the mixed messages with bewilderment Tuesday.

"In Europe, the only country which loves to stay in headlines is Greece," Naeem Aslam, chief market analyst at Ava Trade said in a note Tuesday. "Despite establishing a four-month extension on their loan agreement, (Greece's) finance minister is making bold statements, and there is no shortage of counter statements from creditors either."

Read More'It's treason!'Greek anger at government U-turn

In the meantime, Aslam said, Greece could struggle to pay its expenses at the end of this month. The vital last tranche of aid from its second bailout – worth 7.2 billion euros -- will only be released by creditors "once the country has actually brought all the agreed reforms in action," he warned. Reforms promised by the new government include pension and tax system changes and measures to tackle corruption and tax evasion.

CMC Markets Chief Markets Analyst, Michael Hewson, said that Greece remained in the spotlight for investors.

"Greece in particular continues to be a cause for concern with contradictory noises coming out of Athens with respect to the government's willingness to abide by the agreement that appeared to be sealed last week," he said in a note Tuesday.

"There still appears to be significant pushback from politicians in Athens about abiding by the terms of the current bailout agreement."

Playground squabbles

In the meantime, relations between Greece and its euro zone neighbors have hit a low point, after Greece lashed out at Spain and Portugal this weekend. Greek Prime Minister Alexis Tsipras accused them of having an anti-Athens "axis" during recent bailout negotiations.

Germany also waded into the argument Monday, accusing Greece of "foul play."

"By European standards, this was very unusual foul play. We don't do that in the Eurogroup, that's not appropriate," a spokesman from German Finance Minister, Wolfgang Schaeuble, said on Monday, Reuters reported.

Officials from the euro zone's biggest economy – and therefore Greece's largest creditor -- are fed up with the ongoing bailout drama, with one politician telling CNBC last week that Greece's finance minister Yanis Varoufakis had an "insulting" manner during discussions.

Read MoreGermans fed up with 'insulting' Greeks

As squabbles among the euro zone countries intensified, the EU's executive arm, the European Commission, was forced to step in to mediate, saying it was seeking to maintain unity.

Greece is playing a risky game alienating its neighbors, especially as it seeks to reduce the tough austerity measures imposed as a condition of its two bailouts, worth a total 240 billion euros ($272 billion).

Other countries that have received aid, such as Portugal, Ireland and Spain, are keen for Greece not to be let off the hook. They have implemented the reform requirements of their bailout programs and argue that Greece is getting preferential treatment.

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld