Greek PM halts privatization, markets tumble

Greek Prime Minster Alexis Tsipras has openly challenged international creditors by stopping privatization plans agreed upon under the country's bailout deal.

During his first meeting with cabinet members on Wednesday, Tsipras said that they could not disappoint voters already battered by a drop in living standards caused by austerity measures. 

"We are coming in to radically change the way that policies and administration are conducted in this country," he told ministers.

"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," Tsipras added.

In series of announcements, the government signaled it would stand by its anti-austerity vows.

It said that the sale of shares in the Public Power Corporation of Greece -- the country’s biggest utility -- and refiner Hellenic Petroleum would be put on ice.

Power grid, airports, and motorway asset sales are also to be halted.

The government also announced plans to rehire employees in the public sector who had suffered unfair layoffs.

The reinstatement will include a group of Finance Ministry janitors whose plight attracted publicity last year. The government also announced pension rises for the elderly with low income.

The Greek government first signaled it was not willing to uphold creditor commitments on Tuesday after announcing a halt to the privatization of the port of Piraeus for which China's Cosco Group and other companies had been short-listed.

Stock markets suffer

Following Tsipras’s announcement, FTATBNK, Greek bank stocks, suffered a drop of over 26 percent, raising its cumulative losses since last week's election to more 40 percent. 

Greece's ATG share index dropped by nine percent and Greek five-year government bond yields landed near 13.5 percent.

In an attempt to reassure markets, Deputy Prime Minister Yannis Dragasakis said that when the government implements actions, private investors would be taken into account.

"You've got a government that's anti-privatizations, so I think all privatizations will be put on hold," said an industry banker. "The reality is, if you're a new owner, do you want to have a government who doesn't like you? Best to move on to the next thing."

New prime minster sworn in

On Monday, the Syriza leader, Tsipras, was sworn in as Greek prime minister at the Presidential Palace in the capital Athens, pledging to do his utmost to “to protect the interests of the Greek people.”

According to the Greek Interior Ministry, Syriza won 149 seats in the country’s 300-seat parliament.

Syriza is a fierce opponent of Greece’s bailout deal with the International Monetary Fund and eurozone countries, and has vowed to reconsider the austerity measures that have caused mounting dissatisfaction in the country.

Greece nearly went bankrupt in 2010. It survived, however, on international rescue packages. Athens has received 240 billion euros (USD 330 billion) in international loans in return for imposing austerity measures.

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