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Tsipras Plans to Avert Catastrophe as Greek Markets Sink Further

Wednesday, 28 Jan 2015 06:26 AM

Greek Prime Minister Alexis Tsipras promised to avoid a "catastrophic clash" with creditors and European governments, as stock and bond markets extended their declines to lows not seen since the peak of the country's debt crisis.

At the same time, the new government "will not be forgiven" if it betrays its pre-election pledges to renegotiate the terms of Greece's bailout, Tsipras told ministers in Athens at the inaugural meeting of his cabinet.

"There will neither be a catastrophic clash, nor will continued kowtowing be accepted," Tsipras, 40, said on Wednesday, in comments broadcast live on Greek television.

The new premier named a cabinet yesterday that includes a foreign minister who raised questions over European Union sanctions against Russia and a finance minister who has called Greece's bailout a trap. Germany warned the Mediterranean nation not to set off on a collision course.

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 223 basis points to 16.3 percent as of 12:40 p.m. in Athens. The benchmark Athens General Index decreased 7 percent to its lowest level since September 2012, led by banks.

Statements of newly appointed ministers "imply confrontation and tense negotiations in the near future," Vangelis Karanikas, head of research at Athens-based Euroxx Securities wrote in a note to clients.

The Greek government is willing to hold negotiations with everyone, Tsipras said. He was speaking ahead of a planned visit from the president of the European Parliament, Martin Schultz, in Athens on Thursday, and Jeroen Dijsselbloem, president of the Eurogroup the following day.

After the initial congratulatory notes on Tsipras's election, euro member states hardened their stance.

"The message 'we want your support but not your conditions' won't fly," said Dijsselbloem, who is also Dutch finance minister. "My message will be that we're open to cooperation but that the support from Europe also means the Greeks have to make an effort."

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Greek Prime Minister Alexis Tsipras promised to avoid a catastrophic clash with creditors and European governments, as stock and bond markets extended their declines to lows not seen since the peak of the country's debt crisis.
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Wednesday, 28 Jan 2015 06:26 AM
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