Greek Prime Minister Alexis Tsipras and his
finance chief pledged to avoid a standoff with creditors as
stock and bond markets tumbled on the prospect of a prolonged
fight with fellow European governments.
“There will neither be a catastrophic clash, nor will continued kowtowing be accepted,” Tsipras, 40, said on Wednesday, in comments broadcast live.
The new Greek leadership
“will not be forgiven” if it betrays its pre-election pledges
to renegotiate the terms of the country’s bailout, he said.
A succession of announcements indicated the new government would not back down from its anti-austerity pledges, setting it on course for a clash with European partners, led by Germany, which has said it will not renegotiate the aid package needed to help Greece pay its debts.
Even before the first meeting of the new cabinet, ministers had hit the airwaves to reassure voters they would honour campaign pledges to roll back the tough economic policies imposed under Greece's 240-billion-euro bailout programme.
Greek stocks and bonds slumped for a third day, after new ministers said they will cease the sale of some state assets and increase the minimum wage. Yields on three-year bonds rose 2.80 percentage points to almost 17 percent as of 2:45 p.m. in Athens. The benchmark Athens General Index decreased 7.3 percent to its lowest level since 2012, led by banks.
Yields on 10-year bonds rose back above 10 percent after being as low as 5.7 percent in September. In mid 2012, they exceeded 30 percent, the highest since the country’s debt restructuring, the largest in history, Bloomberg reports.
After announcing a halt to the privatisation of the port of Piraeus on Tuesday, for which China's Cosco Group (COSCO.UL) and four other suitors had been shortlisted, the government said it would block the sale of a stake in the Public Power Corporation of Greece (PPC).
PPC, (AT:DEHr), which is 51 percent owned by the state, controls almost all of Greece's retail electricity market and accounts for about two thirds of the nation's power utility. Shares in the utility were down nearly 13 percent, while shares in Piraeus Port (AT:OLPr) were down nearly 8 percent.
The planned sale of a 30 percent stake in Public Power Corporation of Greece (PPC), the country's biggest utility, was suspended while ministers pledged to raise pensions for those on low incomes and reinstate some fired public sector workers.
The previous government of former Prime Minister Antonis Samaras had passed legislation last year to spinoff part of PPC to liberalise the energy market as part of a privatisation plan agreed under the EU/IMF bailout.
Financial markets have been worrisome, with Greek 10-year bond yields up 50 basis points at 10.30 percent, the main Athens stock index (ATG) down 4 percent and bank stocks (FTATBNK) down 12.6 percent to extend losses into a third day.
