Greece government reverses austerity policies, stocks hit

Athens: Greece's new hard-left Prime Minister Alexis Tsipras sent the Athens stock market diving on Wednesday after his government scrapped key privatisation projects and pressed home its demand for debt relief. In sweeping announcements two days after taking power, Tsipras began reversing many of the unpopular measures that underpin Greece's 240-billion-euro ($269 billion) bailout programme.

His ‘national salvation’ government said it was putting on hold the previous administration's plans to sell a majority stake in the ports of Piraeus and Thessaloniki, and would also halt the privatisation of the top electricity and petroleum companies. China's giant COSCO group is among the bidders for Piraeus, one of Europe's busiest ports.

With European leaders preparing to make their first visits to Athens since Syriza swept to power on Sunday, the president of the European Commission reiterated that cancelling Greece's huge debt was not an option, urging Athens to "respect, the rest of Europe".

"Greece must comply with Europe," Jean-Claude Juncker said in an interview with French newspaper Le Figaro published Thursday, stressing that "there is no question of cancelling the debt".

European Parliament chief Martin Schulz will visit Athens Thursday, the first foreign dignitary to hold talks with the new government, while Jeroen Dijsselbloem, president of the Eurogroup club of eurozone finance ministers, will arrive Friday.

"We respect the popular vote in Greece, but Greece must also respect others, public opinion and parliamentarians from the rest of Europe," Juncker said.

"Arrangements are possible, but they will not fundamentally alter what is in place."

"Tsipras promises that Greece will not accept austerity any more. The euro countries respond that there will be no more credit if Greece abandons its commitments," he said.

Athens' main stock index fell more than 9.0 percent Wednesday and the major banks tumbled by a quarter although European markets remained largely unaffected.

Yields on Greek 10-year bonds rose above the symbolic 10-percent barrier, and ratings agency Standard and Poor's put the country's 'B' credit rating on watch for a possible downgrade, warning the government was heading for a confrontation with its international creditors.