ATHENS: Greece’s new anti-austerity government on Wednesday called for a “pan-European New Deal” for bloc-wide growth and denied seeking a “showdown” with Europe over controversial plans to redraft its multi-billion bailout.

“There will be no showdown between our government and the European Union. There will be no threats, it’s not about who climbs down first,” said new Finance Minister Yanis Varoufakis.

Prime Minister Alexis Tsipras earlier told his cabinet that Greece would seek a “fair, mutually beneficial solution” with its EU peers to renegotiate its 240bn euro ($269bn) EU-IMF bailout and make its huge debt socially manageable.

In a speech to the cabinet — his first since taking office — the 40-year-old premier however insisted that Greece’s new leaders were no longer willing to bow to the “politics of submission”, in a clear swipe at Brussels and the International Monetary Fund.

“Our people are suffering and demand respect... We must bleed to defend their dignity,” Tsipras said.

But the new government’s radical anti-austerity agenda has alarmed financial markets, reviving fears that Greece could crash out of the eurozone.

Greek stocks were shedding over 7 per cent in late afternoon trade — after losing 3pc the previous day — and yields on 10-year bonds also rose above the symbolic barrier of 10pc.

And in another move that spooked markets, the government halted the privatisation of Greece’s main port, Piraeus, which Chinese shipping giant COSCO had planned to turn into its new European hub.

After his Syriza party stormed to power on Sunday, Tsipras forged a coalition with the nationalist Independent Greeks (ANEL), who are equally opposed to the fiscal cuts imposed over the past five years in return for bailout loans.

Varoufakis, a fierce critic of the conditions imposed by creditors, on Wednesday called the cuts “a toxic mistake...that took a toll in human lives, either lost or undermined. “The ruling Syriza party has made frequent references to a “New Deal”, harking back to the stimulus programme that pulled the United States out of the Great Depression in the 1930s.

The new coalition — which has 162 seats in the 300-member parliament — must address an end-of-February deadline set by the EU for Greece to carry out more reforms in return for a seven billion euro tranche of financial aid from the bloc and the IMF.

Tsipras, who has vowed to reverse many of the severe spending cuts and other measures that Greece’s creditors insist on, must soon decide whether to delay the deadline.

Published in Dawn, January 29th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play