Greece sank deeper into the financial mire as its borrowing costs soared to new heights on Thursday despite the government and European Central Bank insisting it did not need immediate help. 'We do not need to activate or modify any mechanism,' government spokesman George Petalotis said of last month's EU-IMF accord aimed at bolstering Greece's credibility in the markets. 'There is no need for any initiative at this time,' he added. European Central Bank head Jean-Claude Trichet meanwhile insisted that the deal, worked out by EU states to also involve the International Monetary Fund, remained a 'workable framework.' 'Taking all the information I have, a default is not an issue for Greece,' Trichet stressed Amid rising doubts that the EU would stick by the deal, the yield on Greece's key 10-year bonds soared to a record high and the Athens stock market registered its heaviest losses in weeks. The yield or return on Greek 10-year bonds topped 7.5 percent for the first time since Athens adopted the euro in 2001 but later came back to 7.35 percent -- still more than double the rate on the German 10-year bond at 3.09 percent. Finance Minister George Papaconstantinou said Athens 'is borrowing and will keep on borrowing' despite the record high costs imposed by financial markets. The government says it has covered its payment needs for all of April and now has May to consider, after which it believes interest rates on its debt will fall as its new bond issues decrease in size. But analysts continued to have doubts given the cumbersome nature of the European Union's decision-making process, which required weeks of bargaining in March before it could agree even the outline of the support mechanism. 'The bond market reaction reflects a complete lack of confidence that the Eurogroup/IMF financial assistance package will do any good or indeed whether it constitutes a package at all,' said Nicholas Kounis of Fortis Bank Nederland. 'It would make sense to make financial aid available as soon as possible. Only a more generous package will restore market confidence,' he said. A Greek banking source said: 'The markets are essentially saying -- we want this plan clarified because so far we've just heard talk. 'The Greek state needs a white knight with moneybags and our fate is pointing towards the IMF,' the source added. 'No other organisation can unlock the sums needed at this stage. A bailout of 2.0 to 5.0 billion euros would be akin to giving aspirin to a dying man.' Worse still, the economy is not doing well enough. 'The Greek economy would need to run doubly fast to keep up and there is no guarantee that it can do that,' the source said. The Greek turmoil put more pressure on the euro, which fell to 1.3299 dollars from 1.3339 dollars Wednesday before recovering to 1.3359 dollars after Trichet's comments. The Athens stock exchange slumped more than three percent, having been down five percent at one stage. Banks were heavy losers a day after the Bank of Greece governor said major lenders wanted to draw funds from a dormant state support scheme. National Bank, Eurobank, Alpha Bank and Piraeus Bank asked for guarantees worth 15 billion euros (20 billion dollars) under a 28-billion-euro support scheme put in place by the previous conservative administration in late 2008, semi-state agency ANA said. Greece has so far managed to secure the loans it needs but at high cost and dwindling demand in Europe, leading it to consider American buyers for its next bond issue. It needs to borrow some 11.5 billion euros by May to cover obligations falling due. The country, which is mired in a deepening recession, is trying to reduce a mountain of debt of nearly 300 billion euros (400 billion dollars) and a public deficit close to 13 percent of output. The finance ministry, which has been under heavy pressure to slash spending, said the public deficit was cut by 40 percent in the first quarter thanks to its austerity measures. Papaconstantinou said the first quarter reduction 'proves' that the government can reach its goal of cutting the public deficit to 8.7 percent of output this year. 