Greece raises $2.3 billion from financial markets

AP News
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Posted: Apr 12, 2011 9:58 AM
Greece raises $2.3 billion from financial markets

Debt-heavy Greece managed to borrow euro1.62 billion ($2.34 billion) in short-term loans from financial markets on Tuesday, at an interest rate that was only marginally higher than in a similar debt auction last month.

The auction of 26-week treasury bills had an interest rate of 4.8 percent, slightly above the 4.75 percent at a similar sale in March, the Public Debt Management Agency said.

The agency had originally been seeking to raise euro1.25 billion in the auction, but borrowed more as investor interest was strong _ the auction was 3.81 times oversubscribed, compared with 3.59 times in March.

Greece was saved from bankruptcy last year by a euro110 billion ($159 billion) package of rescue loans from its European partners and the International Monetary Fund that should see it through mid-2013.

In return, the Socialist government took harsh austerity measures, slashing pensions and civil service salaries while increasing taxes and retirement ages.

Athens has pledged to cut the runaway budget deficit from 15.4 percent of gross domestic product in 2009 to under three percent _ where it should be under EU rules _ in 2014.

Data released late Monday showed that government overspending in the first quarter of 2011 widened by 7.8 percent on the year, to reach euro4.71 billion ($6.78 billion) on a cash basis. The finance ministry said that was euro9 million ($13 million) more than targeted in this year's budget.

Spending rose 3.5 percent to euro15.75 billion ($22.73 billion), while net revenues declined 8.1 percent on the year to euro11.1 billion ($16 billion). In the budget, the government aimed to have revenue of euro12.5 billion ($18 billion). The figures do not include local authority and social security fund accounts.