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Greece holds debt sale in scramble for cash

Greece sold over a billion euros worth of short-term treasury bills Wednesday in a bid to scrape together enough cash to meet is debt repayment deadlines, while a visit to Moscow might also give the country a desperately needed financial lifeline.

The Greek authorities sold 1.138 billion euros ($1.23 billion) worth of six-month T-bills at a yield of 2.97 percent Wednesday, the country's debt agency PDMA said.

There was a relatively healthy demand for the short-term debt -- the bid to cover ratio was 1.30. The auction was one of two short-term bond sales taking place this month to roll over the maturity of its six-month bills on April 14th, and raise money as a credit crunch looms.

The sale's success was crucial to Greece as it has a loan repayment of 450 million euros due to the IMF on Thursday and has to cover its pension and wages bill this month.

The Greek Parliament in Athens
Aris Messinis | AFP | Getty Images)
The Greek Parliament in Athens

Greece's room for maneuver has rapidly diminished. It has been the recipient of two international bailouts, worth a combined 240 billion euros and in February, its second bailout program was extended by the IMF, European Commission and European Central Bank by four months to give it more time to make drastic reforms in return for a final tranche of aid.

Since then, however, little concrete progress has been made in reforms with Greece's suggestions rejected by its creditors, and a final tranche of 7.9 billion euros worth of aid remains unlocked.

There is hope of a reform and aid deal can be reached on or before April when the Eurogroup of finance ministers meets in Brussels.

Unfolding drama

One analyst said that while he expected the debt sale to go well today, the drama surrounding Greece was only just beginning.

"We've got this unfolding drama throughout April," Michael Gallagher, Director of Research at IDEAGlobal, told CNBC Wednesday. "And the real drama begins in summer when we've got to negotiate a third 30 billion euro package for Greece. On balance, we think the deal will be there (on April 24 at the Eurogroup meeting) but there's a lot of politicking going on."

Greek Prime Minister Alexis Tsipras is due to meet Russian President Vladimir Putin in Moscow Wednesday and as his country apparently approaches economic ruin, analysts are concerned Tsipras could resort to drastic measures to save it from collapse.

Read MoreGreece on warpath for damages as crisis grows

Speculation has mounted that the visit, an encounter between two isolated countries in Europe that are both facing economic crisis, could yield some relief for both Greece and Russia.

Speculation has mounted that Russia could cut Greece some slack by lifting a ban on its fruit imports or giving it cut-price gas – or could even offer it an outright financial aid package and Greece could be desperate enough to take any offer.

Trojan Horse?

Any deal would raise eyebrows in Europe, however, as it could potentially prompt Greece to undermine European sanctions placed on Russia for its annexation of Crimea and role in the conflict in Ukraine. Sanctions need to be ratified by all member states and so Greece could, in theory, use its veto in return for Russian aid.

A Greek government official reiterated Wednesday that it had not asked Russia for financial aid and wanted financial issues to be resolved with the EU, Reuters reported

Nonetheless, fears of some kind of "Trojan Horse" (where Greece could undermine sanctions on Russia from inside Europe) were apparent within some European circles, Gallagher said, adding that Greece seemed to be using Russia as a bargaining chip for a better deal in its bailout program negotiations.

Read MoreIs Russia Greece's last hope of survival?

"Greece is trying to play on that (fear)," he said. "They're trying to apply pressure in a lot of different ways politically to try to get a better deal," he told CNBC Europe's "Squawk Box," although he didn't think there would be any deal with Russia.

Despite Greece's ability to repay its creditors being thrown into question, Mark Mobius, executive chairman of Templeton Emerging Markets Group, told CNBC he also has a positive outlook on Greece.

"I'm still really bullish," Mobius said Tuesday. "I was there a week ago in Athens talking to the banks and I think they will come to the table with something workable, I really do." He believed the new leftwing Greek government would be able to survive, despite its economic and political troubles.

"I think that this government will be able to do the job, being a bit more radical they will be able collect taxes a bit more aggressively than previous governments' have."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld