EUROPE'S government debt crisis has flared up again in the run-up to two crucial meetings of European Union leaders as Portugal had to pay 50 percent more to raise cash in the markets yesterday than it had to just six months ago.

Investor tensions grew after the Portuguese government revealed it is paying 5.99 percent interest to raise 1 billion euros (US$1.4 billion) in two-year bonds. That was way above the 4 percent demanded at the last similar auction in September and about 4.5 percentage points more than the rate Germany has to offer - even though the two countries share the same currency.

The yield on Portugal's 10-year bonds rose a further 0.06 percentage point to 7.68 percent, a euro-era record and above the rates Greece and Ireland saw before accepting bailouts from the EU and International Monetary Fund last year.

The major concern in the markets is that the March 24-25 summit of EU leaders in Brussels will not yield the "comprehensive solution" to the debt crisis that has been trumpeted.

There's also a realization higher borrowing costs will make it far more difficult for countries like Greece and Portugal to grow themselves out of the debt mire they find themselves in.

Portugal's government has repeatedly spurned talk of a bailout. Portugal needs to raise 20 billion euros this year, and the Finance Ministry said it has already collected about 30 percent of that amount.