Greece pays higher rate to borrow for 6 months

Greece raised 1.625 billion euros ($2.14 billion) for six months at an increased interest rate of 4.95 percent on Tuesday, the Greek debt management agency said. At the last such auction on November 8, Greece had paid a rate of 4.89 percent. However, the initial amount of bonds offered for sale was 1.250 billion euros and demand totalled three times this figure. Demand had been strong for the previous similar auction which had been set at 1.0 billion euros but raised 1.3 billion euros. The issue took place in a week described as "crucial" by the Greek government which is in negotiations with auditors from the European Commission, the European Central Bank and the International Monetary Fund. Greece is also in talks with private banks over details of how the debt is to be restructured in a way which will result in them giving up about 50 percent of debt repayments due. The negotiations with the banks follow an agreement in principle reached by eurozone leaders at the end of October.