Greece on a 1.5 billion euro auction on Jan 11 (AP) (07-01-2011)

ATHENS – Greece is about to auction 1.5 billion euros ($1.96 billion) in 6-month treasury bills next week, as long-term borrowing rates reached new record highs.

According to the public debt management agency on Friday the sale will take place on Jan.11 with its size possible to increase as much as 30 percent.

Debt-ridden Greece only avoided bankruptcy in May through massive foreign rescue loans that will total euro110 billion ($144 billion) by mid 2013. In return, the Socialist government slashed salaries and pensions, while raising sales taxes and retirement ages, moves that sparked repeated union protests.

Treasury bills were sold by Athens on Nov. 16, raising 390 million euro ($510 million) from a 13-week issue that was oversubscribed, but resulted in a high yield. The last six-month sale, in October, raised 1.17 billion euro ($1.53 billion) at a yield of 4.54 percent.

On Friday, the interest rate for the country's 10-year bonds came close to 13 percent -- a new record high and nearly 10 percent more than what Germany has to pay for its benchmark issues of the same maturity.

Greece stays under strict supervision by the International Monetary Fund and European Union and is obliged to reduce its bloated budget deficit from 15.4 percent of gross domestic product in 2009 to 2.6 percent in 2014.

Source: AP