Tsipras: Greece Will Not Default

Tsipras: Greece Will Not DefaultTsipras: Greece Will Not Default

New Greek Prime Minister Alexis Tsipras said on Wednesday his country will not default on its debts.

Addressing his first cabinet meeting since Sunday’s victory, Tsipras said he would negotiate with creditors over the €240 billion ($270b) bailout, BBC reported.

“We won’t get into a mutually destructive clash but we will not continue a policy of subjection,” said the left-wing Syriza party leader.

Germany’s vice-chancellor said it was unfair of Greece to expect other states to pick up its bills. “I cannot imagine a haircut [debt reduction],” Sigmar Gabriel said.

As Tsipras made his debut cabinet speech, Greek government bond yields rose to their highest since the 2012 debt restructuring, amid investor concern that the anti-austerity coalition was gearing up for a clash with international creditors.

The Athens Stock Exchange fell by 8% in response to Tsipras’s remarks, and as it emerged that his government was putting on hold major privatization projects, including the port of Piraeus and the main power company, the Public Power Corporation of Greece.

Greece has endured tough budget cuts in return for its 2010 bailout, negotiated with the “troika” - the EU, International Monetary Fund (IMF) and European Central Bank (ECB).

Its economy has shrunk drastically since the 2008 global financial crisis, and high unemployment has thrown many Greeks into poverty. Vowing to defend Greek dignity, Tsipras said a renegotiation of the Greek debts would aim for a “viable, fair, mutually beneficial solution.” He did not give details.

Tsipras promised “realistic proposals” for an economic recovery and vowed to fight corruption and tax evasion. His recovery plan, he said, was aimed at preventing deficits in the future.

The new coalition government - with the right-wing but equally anti-austerity Greek Independents - was sworn into office on Tuesday.