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 A swift series of announcements signaled the newly installed
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 honor campaign pledges to
roll back the tough economic policies imposed under Greece's
240-billion-euro bailout program.
The planned sale of a 30 percent stake in Public Power Corporation
of Greece (PPC), the country's biggest utility, was halted while
ministers pledged to raise pensions for those on low incomes and
reinstate some fired public sector workers.
"We are coming in to radically change the way that policies and
administration are conducted in this country," Tsipras told
ministers at their first cabinet meeting.
Financial markets have looked on nervously, 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.
 Saying that the mood towards Greece was changing since his leftwing
party's sweeping election victory on Sunday, Tsipras said he would
avoid antagonism with European Union and International Monetary Fund
creditors.
"Our priority is also a new negotiation with our partners, seeking
to reach a fair, viable and mutually beneficial solution so that the
country exits the vicious circle of excessive debt and recession,"
he said.
ASSET SALES HALTED
He said the government would pursue balanced budgets but would not
seek to build up "unrealistic surpluses" to service Greece's massive
public debt of more than 175 percent of gross domestic product. He
added that he expected a "productive" meeting on Friday with Jeroen
Dijsselbloem, head of the euro zone finance ministers' group.
Priorities would be helping the weakest sections of society, with
policies to attack endemic clientelism and corruption in the
economy, reduce waste and cut Greece's record unemployment.
After announcing a halt to the privatization 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).
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PPC, <DEHr.AT>, 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
<OLPr.AT> were down nearly 8 percent.
"We will halt immediately any privatization of PPC," Energy Minister
Panagiotis Lafazanis told Greek television a few hours before
officially taking over his portfolio.
"There will be a new PPC which will help considerably the
restoration of the country's productive activities," he said.
The previous government of former Prime Minister Antonis Samaras had
passed legislation last year to spinoff part of PPC to liberalize
the energy market as part of a privatization plan agreed under the
EU/IMF bailout.
In a sign of the potential sensitivity of the move to cancel the
privatizations, Tsipras met China's ambassador to Athens, Zou Xiaoli
on Tuesday to stress the importance of good relations with Beijing.
As well as announcing a halt to selling state assets, ministers have
promised to reinstate laid-off public sector workers whose dismissal
was ruled unconstitutional and restore cuts to pensions.
"What we have said during the election campaign will be our guide,
starting with measures that do not have large spending impact,"
Deputy Social Security Minister Dimitris Stratoulis told Antenna TV.
(Additional reporting by George Georgiopoulos and Angeliki
Koutantou; writing by James Mackenzie; editing by Anna Willard)
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