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* Benchmark yields briefly dip below key 1.8 pct level * Safe-haven demand may support 10-year note auction By Chris Reese NEW YORK, May 9 (Reuters) - U.S. Treasury debt prices rose on Wednesday as Greece's political stalemate and concerns about Spain's ailing banking sector stoked fears of another round in the long-running euro zone debt crisis, supporting demand for low-risk assets. Greece's struggle to form a government after weekend elections made the outlook for implementing its austerity program unclear. If it fails to follow up on pledges it made for a European Union/IMF bailout, officials estimate it could run out of money as soon as next month. Greece will not receive any further tranches of aid under the planned bailout program unless it continues with reforms, German Foreign Minister Guido Westerwelle said in Brussels on Wednesday. Greece looked to be moving closer to a second snap election as bickering politicians struggled to form a government Spain remains at the forefront of the debt crisis, with its 10-year yields rising back above 6 percent after financial sources said the country's banks could be forced to raise new money to cover property loans, piling pressure on the struggling sector. Benchmark 10-year Treasury debt prices were trading 12/32 higher in price to yield 1.8 percent, down from 1.85 percent late Tuesday, 30-year bonds were trading 27/32 higher to yield 2.99 percent from 3.04 percent. "Treasuries may seem like they are ridiculously expensive, but if you look at the uncertainty that is mounting in Europe and the way things are going with our own economy, there is a potential turn that could be very negative (for the global economy)," said William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts. The safe-haven buying on Wednesday morning briefly pushed 10-year note yields below 1.8 percent, which is seen as a key technical resistance level. Yields dipped to 1.795 percent, which is the lowest since Jan. 31. If yields hold below 1.8 percent, analysts said Treasuries may be set for another leg higher in price. "If we break through this 1.8 level it is going to be a new game, a new heightened level of fear," Larkin said. The market backdrop was likely to support a Treasury sale of $24 billion of 10-year notes later on Wednesday, after Tuesday's sale of $32 billion in three-year notes marked the second highest ever bid-to-cover ratio. "The never-ending eurozone crisis and the global duration grab that it has triggered has pushed US 10-year yields to levels that could lead to a record low stop out yield," Nomura Securities International said in a note. Yields on 10-year notes in the when-issued market , considered a proxy for where the high yield may come in at the auction, were trading AT 1.833 percent early Wednesday. The Treasury will auction $16 billion of 30-year bonds on Thursday to round out the $72 billion of debt sales this week under the Treasury's quarterly refunding.