21 May 2011

Cost of borrowing rising for Greece

8:05 am on 21 May 2011

The cost of borrowing for Greece is rising, as bond markets price in a growing risk of an outright debt default.

The BBC reports the country's 10-year borrowing cost has risen by one percentage point over the last two days, to a new high of 16.7%.

Its short-term borrowing cost has also risen steadily in the past two weeks, from 5.4% to 6.4%.

Prime Minister George Papandreou on Friday played down the risk of a default.

''I want to say here that we will pay back these loans,'' he said.

The Fitch rating agency has cut its rating of Greek debt again.

The BBC reports the agency lowered its credit rating by three notches to B+ and warned of further downgrades if the EU and International Monetary Fund fail to come up with a credible rescue plan.