Greece markets tumble as new PM announces radical changes

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.