* Little progress achieved on U.S. "fiscal cliff"
* Greek debt concerns linger on; safe-haven bonds rise
* German five-year debt auction seen well-bid
By Marius Zaharia
LONDON, Nov 28 German government bonds rose on Wednesday as concerns over the lack of progress towards averting large-scale, automatic budget tightening in the United States next year supported assets seen as safe havens.
The Congress and the White House are yet to reach a deal on budget measures to avoid the $600 billion "fiscal cliff", which economists warn could send the U.S. back in recession and hit the global economy in turn.
Senate Majority Leader Harry Reid said on Tuesday that he was disappointed that there had been "little progress" on the issue.
Those signals overturned the upbeat tone among stock market investors prompted by a deal in the euro zone to release the next aid tranche to Greece. A sale of five-year German debt - the euro zone's safest bet in troubled times - was expected to go well later in the day as a result.
"As long as that (the fiscal cliff) is in play we're not going to see Bunds trade off too far ... given the growth implications next year," one trader said.
Bund futures were 33 ticks higher at 142.56, while 10-year cash Bunds yielded 1.402 percent, 3 basis points lower than the previous close.
German bonds weakened only slightly on Tuesday on the back of the Greek deal as markets applauded the escape from an imminent default but remained concerned that Athens' finances were still not back on a sustainable path.
There was little detail about a planned debt buy-back and it was unclear whether enough investors could be convinced to participate to make the operation efficient in reducing Greece's overall debt.
"Investors remain sceptical of the whole thing and I don't think it answers many questions about the sustainability of debt dynamics," said Brian Barry, fixed income analyst at Investec.
"I'm not entirely sure that ultimately the scale of buy-backs will be sufficient to have any meaning," he said. Greece will be a "drag on sentiment" for years to come, he added.
The German auction is expected to draw solid bids from investors as they seek low-risk assets for shelter from the Greek crisis and the U.S. fiscal risks.
Bets that the European Central Bank will keep official interest rates low for a protracted period have also contributed to generally strong five-year German debt auctions this year.
Five-year Bobl yields were 2.6 basis points lower on the day at 0.424 percent.
"They're not exactly yielding a great deal but if you're concerned over continued underperformance of risk assets over the next year this might be the place to be," Barry said.