Addressing his government’s first cabinet meeting on Wednesday, newly elected Greek Prime Minister Alexis Tsipras said that his government would seek to reach a “viable, fair, mutually beneficial solution” to the country’s massive debt, according to media reports. Tsipras’ comments, made just two days after his left-wing Syriza party came to power by exploiting a widespread anti-austerity sentiment in the country, have sparked fears in the euro zone over a possible Greek default.
“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 … we won't get into a mutually destructive clash but we will not continue a policy of subjection,” Tsipras reportedly said. His comments come just a day after Euclid Tsakalotos, a spokesperson for the newly elected Greek government, said that it is “unrealistic” to expect Greece to repay its debt in full.
European Union leaders had earlier warned the new Greek government against defaulting on repayment of the money owed to international lenders. Greece owes nearly $270 billion to its lenders, which include the European Union, the European Central Bank (ECB) and the International Monetary Fund, collectively referred to as the troika. The lenders have imposed severe austerity measures as a precondition of the nation's bailout after the 2008 financial crisis, but these measures have proven extremely unpopular in a country wracked by severe unemployment and soaring indebtedness.
“We are a government of national salvation. Our aim is to negotiate debt relief,” Tsipras reportedly said, adding that his government will also work toward drafting “balanced budgets” to boost economic growth in the country. However, he did not provide details of the terms his government would be willing to negotiate on.
Following Tsipras’ comments, Greek bonds weakened sharply, with the yield on the five-year bonds sold in April last year reaching an all-time high of 13.5 percent, according to a report by The Guardian.