Greece markets tumble as new PM announces radical changes

<p>Alexis Tsipras said the government is ready for debt talks.</p>

Greek markets tumbled after the country's new government today (January 28th) unveiled an agenda that includes radical changes.

Investors worried that the new anti-austerity government was determined to defy its international creditors, with consequences for Greece's future in Europe.

"The floor is zero if things go badly in the negotiations between the new government and the rest of the eurozone," Simon Maughan, head of research at OTAS Technologies, told Reuters.

Greek five-year bond yields jumped to a record high of 13 per cent, while the main Athens Stock Exchange (ASE) was down 7.6 per cent. Banks have seen 23 per cent of their value wiped off since the election.

Port of Piraeus' sale halted

"Our priority is to support the economy, to help it get going again. We are ready to negotiate with our partners in order to reduce debt and find a fair and viable solution," prime minister Alexis Tsipras said.

He also confirmed the planned sale of the state’s 67 per cent stake in the main port of Piraeus had been halted.

Greece’s public sector reform minister also announced that the government would reinstate some of the public sector employees deemed to have been laid off without proper justification and announced rises in pension payments for retired people on low incomes.

In response to these comments, the German economy minister Sigmar Gabriel said Athens should have discussed the halt to privatisations with its partners before making an announcement.

"Citizens of other euro states have a right to see that the deals linked to their acts of solidarity are upheld," he said, adding that it would be the "wrong solution" for Greece to quit the euro but that it was up to Athens to decide.

More information about Greece and other European markets can be found at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.