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Greek debt deal gets more difficult

Wednesday, January 28, 2015 - 02:10

Greece's Prime Minister has spoken of ''radical change'' and pledged to negotiate responsibly with international creditors. But as Sonia Legg reports doing both is looking increasingly difficult.

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He's shrunk the cabinet from 20 to 10 - but Greece's debt may not be so easy to reduce. The line-up is dominated by left-wing academics. And only one minister has any previous experience of government. Prime Minister Alexis Tsipras sees the transformation as a positive. He wants to show Greeks they will get the change they voted for. (SOUNDBITE)(Greek) GREEK PRIME MINISTER, ALEXIS TSIPRAS, SAYING: "We did not come here to take over institutions and to enjoy the trappings of power. We have come to radically change the way in which politics and governance is carried out in this country." But the challenges are daunting and Greek markets continued to be battered. Three days after the election short-term borrowing costs had topped 17% - even longer-term ones were above 10% Athens Stock Exchange also fell another 7%, with bank shares down 22% Other major fallers included the Piraeus Port Authority after ministers halted plans to sell off state assets. Investors are finding it hard to see how Syriza's electoral promises to abandon austerity can be achieved while carrying through agreed fiscal and structural reforms. Nick Beecroft is from Saxo Bank. (SOUNDBITE) (English) SAXO BANK, SENIOR MARKET ANALYST, NICK BEECROFT, SAYING: "Those things could turn out to be mutually incompatible. At the moment I would only put a 20 - 25% chance of a Grexit. But I don't think it is not inconceivable by any means and I do think the market and possibly the German government is underestimating the possible impact of that." No chance of Greece's new Finance Minister underestimating the task he has ahead. And friction with EU partners may not stop with economics. Greece also appeared to distance itself from an EU call to consider broader sanctions against Russia. (SOUNDBITE) (English) SAXO BANK, SENIOR MARKET ANALYST, NICK BEECROFT, SAYING: "This refusal to join with all the other EU states in imposing sanctions on Russia gives one a flavour of how difficult the negotiations over debt can be." They later said they hadn't signed the sanctions statement because they hadn't been consulted. But either way is suggests a long haul ahead - even with talk from the finance minister of a new relationship of trust and honesty between Greece and its European partners.

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Greek debt deal gets more difficult

Wednesday, January 28, 2015 - 02:10