Greece raises $1.6 billion in debt auction

[July 13, 2010]  ATHENS, Greece (AP) -- Greece on Tuesday successfully raised euro1.25 billion ($1.6 billion) in its first debt auction since receiving international bailout loans.

The country's Public Debt Management Agency said the sale of 26-week treasury bills was oversubscribed 3.64 times, at an interest yield of 4.65 percent.

The sale was seen as an important test of Greece's financial recovery effort amid continued Europe-wide concern over sovereign debt.

Debt-strapped Greece narrowly avoided default in May, when it received the first installment of a euro110 billion rescue package from euro-currency partners and the International Monetary Fund.

To secure the loans, Greece's center-left government imposed painful austerity measures and began overhauling its pension and labor systems, angering labor unions and triggering a series of strikes and protests.

In Athens, the ancient Acropolis was closed for several hours Tuesday by site workers who were demanding back pay.

Flights are also set to be disrupted Thursday, with air traffic controllers planning a work stoppage between 0800 and 1200 GMT.

On Monday, the Finance Ministry said Greece's bloated budget deficit has been cut by 46 percent in the first half of the year, beating government targets.

It said overspending was reduced to euro9.6 billion in that period from euro17.8 billion in the first half of 2009.

Greece has promised to bring the deficit from a hefty 13.6 percent of annual output in 2009 to 8.1 percent in 2010.

[Associated Press]

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