Left-wing Greek Prime Minister Alexis Tsipras threw down an open challenge to international creditors on Wednesday by halting privatisation plans agreed under the country’s bailout deal, prompting a third day of heavy losses on financial markets.
A swift series of announcements signalled the newly installed government would stand by 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.
Mr. Tsipras told the first meeting of his Cabinet members that they could not afford to disappoint the voters who gave them a mandate in Sunday’s election, which his Syriza party won decisively.
After announcing a halt to the privatisation of the port of Piraeus on Tuesday, for which China’s Cosco Group and four other suitors had been shortlisted, the government said on Wednesday it would block the sale of a stake in the Public Power Corporation of Greece (PPC).
It also plans to reinstate public sector employees judged to have been laid off without proper justification and announced rises in pension payments for retired people on low incomes.
Uncertainty over the new government’s relations with the European Union (EU) went beyond economic policy. A day before the EU is expected to extend sanctions against Russia for six months, it was unclear if Athens would back its European partners on this move, after dissenting over a joint statement from the bloc on Ukraine on Tuesday.
Mr. Tsipras, who met Russia’s ambassador to Athens on Monday and the Chinese envoy the next day, told Ministers that the government would not seek “a mutually destructive clash” with creditors. But he warned Greece would not back down from demanding a renegotiation of debt.
Newly-appointed Finance Minister Yanis Varoufakis, who meets Jeroen Dijsselbloem, head of the eurozone Finance Ministers’ group on Friday, said negotiations would not be easy but he expected they would find common ground.
