Athens--Greece's new hard-left government on Wednesday scrapped key privatisation tenders and pressed home its demand for debt relief, causing sharp falls on the Athens stock market as investors fretted over the risk of a default.
Prime Minister Alexis Tsipras said his "national salvation" government would not sell a majority stake in the main ports of Piraeus and Thessaloniki, and would also halt the privatisation of the top electricity and petroleum companies.
The news sent Greek stocks tumbling, with the main index losing over 9.0 percent and banks falling by a quarter.
Yields on Greek 10-year bonds also rose above the symbolic barrier of 10 percent.
Tsipras, comfortably elected on Sunday on a pledge of ending painful austerity in a country worn down by six years of recession, said he wanted a "fair" renegotiation with Brussels of the country's 240 billion euro ($269 billion) bailout.
His finance minister, Yanis Varoufakis, insisted there would be no "showdown" between Greece and the European Union, while calling the austerity cuts a "toxic mistake" that ultimately benefited no one in Europe.
In a speech to the cabinet -- his first since taking office -- 40-year-old premier Tsipras however insisted that Greece's new leaders were no longer willing to bow to the "politics of submission", in a clear swipe at Brussels and the International Monetary Fund.
The new government had already on Tuesday taken the EU to task for threatening to impose further sanctions on Russia over the war in the Ukraine without consulting Athens about the warning.
"Our people are suffering and demand respect... We must bleed to defend their dignity," Tsipras said on Wednesday.
The new government's radical anti-austerity agenda has alarmed financial markets, reviving fears that Greece could crash out of the eurozone.
After his Syriza party stormed to power on Sunday, Tsipras forged a coalition with the nationalist Independent Greeks (ANEL), who are equally opposed to the fiscal cuts imposed over the past five years in return for bailout loans.
The ruling Syriza party has made frequent references to a "New Deal", harking back to the stimulus programme that pulled the United States out of the Great Depression in the 1930s.
The new coalition -- which has 162 seats in the 300-member parliament -- must address an end-of-February deadline set by the EU for Greece to carry out more reforms in return for a seven billion euro tranche of financial aid from the bloc and the IMF.
Tsipras, who has vowed to reverse many of the severe spending cuts and other measures that Greece's creditors insist on, must soon decide whether to delay the deadline.
Outgoing finance minister Gikas Hardouvelis said Greece had "quite acute" financing needs in March and could not afford to have negotiations drag on until the summer.
- EU 'flexible' -
Greece's European partners have been quick to stymie the prospect of debt forgiveness, with German Chancellor Angela Merkel's spokesman saying that Greek membership of the eurozone "means... sticking to its previous commitments."
However the EU's governing body indicated Wednesday that it was willing to show flexibility with the new Greek leaders to keep the debt-stricken nation in the eurozone.
European Parliament chief Martin Schulz will be in Athens on Thursday, the first foreign dignitary to hold talks with the new government.
The European commissioner for economic and financial affairs, France's Pierre Moscovici, said he ruled out any "break" between the European Commission and the new Greek administration, the French daily Le Parisien reported Wednesday.
AFP
