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Greece delivers, Europe grumbles

January 28, 2015

Newly elected Greek Prime Minister Tsipras has quickly moved to implement his campaign promises to the Greek people. For European leaders, that is cause for serious concern.

Symbolbild Griechenland Europa
Image: Milos Bicanski/Getty Images

German and European politicians got a taste of what it will be like working with Greek Prime Minister Alexis Tsipras and his Syriza-led government on Wednesday, with the freshly-elected Tsipras taking aim at a number of carefully arranged deals made between Greece's international lenders and the previous Greek government.

Tsipras is following through on campaign promises, but many observers believed he would scale back some of his plans that would most deeply impact the terms of the international financial lifeline that has been put in place over the years.

That includes getting rid of certain public spending cuts and tax hikes that have secured Greece a line of credit but left the Greek economy in tatters.

"Our first duty is to help those on the verge of despair, who do not have the basics like good heating, and medical care," Tsipras said in his first Cabinet meeting on Wednesday.

Over the course of the day, Tsipras made a number of moves that ruffled feathers in Europe and beyond. A number of planned moves to privatize certain Greek utilities and ports have been put on hold, and many public sector employees - deemed to have been unfair victims of the previous government's austerity measures - have been rehired.

While Tsipras claims his government was not seeking a "mutually destructive clash" with his country's lenders, he would also see through his plan to "radically change the way that policies and administration are conducted in this country."

Tough negotiations ahead

The first days of the Tsipras administration have raised more than a few eyebrows in Europe.

Looking ahead to negotiations with Greece about how the country is going to uphold its commitments to international lenders, Jyrki Katainen, vice president of the European Commission, said "the commitments haven't changed and time is running out. We don't change our policy according to elections."

Referring to Greece's decision to put the brakes on the privatization plans, German Economy Minister Sigmar Gabriel said the decision should have been discussed with Greece's partners first.

"Citizens of other euro states have a right to see that the deals linked to their acts of solidarity are upheld," he said.

In France, Finance Minister Michel Sapin said he thought his country was in a good position to serve as a mediator between Greece and the rest of the eurozone.

"[It's in the Greek government's interest] to find with us, with all European governments, the right way forward to meet the upcoming deadlines and look toward the future, including by striking new deals on new programs," Sapin said on Wednesday.

He added that despite Tsipras' stated goal of getting a large part of Greek debt cancelled, that "no one is talking about debt cancellation."

Greece on watch

In addition to a turbulent day on the Athens Stock Exchange that saw shares drop 9 percent, the Standard and Poor's credit rating agency put Greece's 'B' credit rating on watch for a possible downgrade.

"In our opinion, if the new Greek government fails to agree with official creditors on further financial support, this would further weaken Greece's creditworthiness," Standard and Poor's said in a statement.

The bailout up for negotiation in Greece amounts to a total of 240 billion euros ($272 billion).

mz/sms (AFP, Reuters, AP, dpa)