France Pays Lower Rates at Bond Auctions

The French treasury said Thursday that it had sold a total of 8.46 billion euros ($11 billion) in short- to medium-term bonds at sharply lower interest rates, a development seen also in Spain.

Pressure thus appeared to be easing on indebted Eurozone members since a Greek bailout was secured and the European Central Bank made a second massive injection of cash into the Eurozone banking sector.

The French result was at the upper end of a range set by treasury officials, and Paris took advantage of strong demand to borrow, for example, for five years at an average of 1.78 percent, down from 1.93 percent at the last comparable auction on February 16.

On February 29, the European Central Bank staged a second long term refinancing operation, pumping nearly 530 billion euros in cheap loans to Eurozone banks, and their appetite for public debt has since strengthened.

Improved prospects for the Eurozone economy, in particular with the approval of a second financial bailout of Greece, has also eased pressure on indebted governments.

Spain, a country that saw borrowing costs climb dramatically in the thick of the crisis, said Thursday that it had raised 3.0 billion euros at mostly lower rates in auctions of three-, four- and six-year bonds.

They were the first auctions since Madrid and European Union officials agreed on a higher Spanish deficit target for 2012.