22 Apr 2010

Greek borrowing cost at new high

6:41 am on 22 April 2010

The cost of borrowing for the Greek government has hit a new high as talks begin on a joint eurozone and International Monetary Fund rescue plan.

The interest rate on 10-year government bonds was 8.3% - the highest since the euro was introduced.

Rates rose as it became clear that talks over the aid package may not be finished until days before a multi-billion-euro loan is due for repayment.

The BBC reports investors are becoming more convinced that Greece will need to be rescued.

Greece's finance ministry said the talks with the European Commission and the IMF would take about two weeks, with a joint text issued on about 15 May.

Greece is due to repay a bond worth 8.5 billion euros on 19 May.

Athens needs to raise about 11 billion euros by the end of May and about another 35 billion euros during 2010 to pay its bills.

Almost 2 billion euros was raised by selling three-month Treasury bills on Tuesday. However, the interest rate was 3.65%.