ATHENS, Greece – GREECE has raised euro1.95 billion (US$2.62 billion) in a 13-week treasury bill auction that was more than four times oversubscribed, the public debt management agency said yesterday.

But the good news on the debt front was offset by figures showing a spike in unemployment, with 62,000 jobs lost in January as Greece remained locked in recession.

The auction was aimed at shaving the country’s crucial borrowing requirement for May, as Athens mulls whether to use a joint eurozone-International Monetary Fund rescue package. Talks with European and IMF officials on the package are due to start in Athens today.

Finance Minister George Papaconstantinou said he would travel to the United States Friday to attend an IMF meeting, and would hold talks with US Treasury Secretary Tim Geithner and IMF chief Dominique Strauss-Kahn.

Struggling to cope with a debt pile of euro300 billion (US$406 billion), Greece needs to borrow about euro54 billion this year alone and has a projected public debt of more than 120 per cent of gross domestic product through 2011, before easing slightly the following year.

Greece has been promised euro30 billion (US$40.3 billion) in standby loans from eurozone countries this year, but will now begin negotiations for a potential “multiyear programme.”

George Provopoulos, the governor of the Bank of Greece, suggested markets remain unsettled by Greece’s large debt and borrowing needs.

“In the coming year, our borrowing needs will continue to be high — as they are this year — and this creates the perception that the public debt will continue to follow an upward trend instead of being stabilised,” he said, adding that promised help from the eurozone and IMF was key to “restoring credibility”.

Tuesday’s auction sought to raise euro1.5 billion (US$2 billion) and was oversubscribed by 4.61 times, with euro6.921 billion in offers, the debt management agency said. It also accepted euro450 million in non-competitive bids, it said. The yield for the 13-week bills stood at 3.65 per cent, compared to the 1.67 per cent yield from a similar bill issued in January that was oversubscribed by 3.23 times.

“The message of today’s auction is that we raised euro1.95 billion, so our borrowing requirements for May have fallen below euro10 billion — and that’s very important,” Finance Minister Papaconstantinou said during a news conference.

Last week, Greece successfully raised euro1.56 billion in six and 12-month treasury bill auctions, but at punishingly high rates. The yield for the 12-month bill sold last Tuesday stood at 4.85 per cent compared to 2.2 per cent for the previous issue in January, while the yield for the six-month bills was 4.55 per cent compared to 1.38 in a similar auction in January.

Greece’s cost of borrowing has spiralled in recent weeks. The interest rate gap, or spread, between Greek 10-year government bonds and their benchmark German equivalent on Tuesday hit another record high at 4.74 percentage points. Greece is struggling to borrow at acceptable cost so it can avoid default or asking for a eurozone bailout.

Data released yesterday showed that unemployment hit a five-year high of 11.3 per cent in January, when the total number of unemployed people reached 567,132. In December 2009 unemployment was 10.2 per cent, and 9.4 per cent in January 2009. Weak economic growth prospects lead some analysts to say that even if Greece gets a bailout this year, it will be difficult to pay its huge debt load over the coming years.

Wednesday’s talks with the IMF and European Central Bank officials in Athens aim at hammering out details of the rescue package announced in Brussels earlier this week.