Stocks Slide As Greece Rows Back On Austerity

Greek stocks have tumbled for a third day after the new prime minister set a collision course with creditors by overturning spending cuts imposed under its bailout programme.

Alexis Tsipras signalled the newly installed government would stand by its anti-austerity pledges after announcing it would halt the privatisation of the port of Piraeus.

It also said it would put the sale of stakes in Greece's biggest utility company, the Public Power Corporation of Greece, on hold along with Hellenic Petroleum and halt the sales of motorways and airports.

Investors reacted with horror, with Greek bank stocks plummeting more than 26% on Wednesday - taking their cumulative losses since Mr Tsipras won the election on Sunday to 40%.

The stock market in Athens fell more than 9%, while five-year government bond yields hit around 13.5%.

Standard & Poor's cut its rating on Greek sovereign debt to negative, from stable.

Finance Minister Yanis Varoufakis, who meets Jeroen Dijsselbloem - head of the euro zone finance ministers' group, insisted there "won't be a duel between Greece and Europe".

He said he would meet with the finance ministers of France and Italy, both of whom have pressed for the EU to change its austerity course.

Mr Tsipras said the Greek people had demanded a new focus and he would not seek to build up "unrealistic surpluses" to service Greece's massive public debt - funds that are a condition of its €240bn (£179bn) rescue.

He announced that pensions for low-paid public sector workers would rise and some job cuts would be reversed as part of his efforts to grow employment, with more than 25% of Greeks currently out of work.

"Our priority is also a new negotiation with our partners, seeking to reach a fair, viable and mutually beneficial solution so that the country exits the vicious circle of excessive debt and recession," he said.

Almost two-thirds of young people in Greece are without work and 32% of children are living below the poverty line according to recent estimates.

The country's international lenders have maintained they will not let the country off the hook but indicated they may be prepared to give Greece more time to pay back its loans.

It raises the prospect of showdown talks, with Germany particularly anxious that other eurozone nations are not encouraged to deviate from austerity and place the single-currency at greater risk.

Greece is yet to get its hands on a final €7.2bn (£5.4bn) - agreed in principle with the EU, European Central Bank and International Monetary Fund - cash which is conditional on further reform.