Borrowing costs have soared

The state was forced to borrow at a far higher interest rate yesterday than three months earlier when it asked the market to buy its three-month Treasury bills. The rate yesterday reached 1.67 percent, against just 0.35 percent last October for similar T-bills. This rate is 1 percent higher than the mean Euribor rate for three-month bonds and even higher than that for the 26-week bills, which amounted to 1.38 percent. Demand was also disappointing, as the offers amounted to just 3.8 billion euros, down from 7 billion euros submitted in October 2009. The state had asked to borrow 1.2 billion euros, so the original amount was covered 3.23 times. In October, it had been covered 4.69 times. This shows that Greece may be able to find the money it needs to borrow, but it will cost it dearly. «The mere fact that we are looking closely into how the sale of 13-week bills went is illustrating how big Greece’s problems are,» market analysts said yesterday.

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