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Alarm bells over new Greek policies

Thursday, January 29, 2015 - 02:25

There's growing alarm outside Greece over the measures already being taken by the new Greek government. And after several days of stock market turmoil in the country the ECB is warning commitments must be respected. Katie Gregory reports.

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Symbolic it may be, but these government cleaners in Greece didn't care. They've been given their jobs back - by the new Finance Minister. (SOUNDBITE) (Greek) NEW GREEK FINANCE MINISTER, YANIS VAROUFAKIS, SAYING: "One of our first moves will be the immediate cutting of costs at the ministry, for example the number of advisors, and this spending cut will fund the re-hiring of the cleaning ladies at the ministry." But not everyone is delighted with the early actions of the new government. China is "highly concerned" after a majority stake in Pireaus port was taken off the market. Other state assets - being off-loaded as part of Greece's bailout agreement - are also being withdrawn from sale. They include the Public Power Company. The new Deputy Prime Minister says Greece wants a different type of investor. (SOUNDBITE)(Greek) DEPUTY PRIME MINISTER YANNIS DRAGASAKIS, SAYING: "Our government is interested in attracting new investment, particularly in the sectors that will increase productivity and employment. We are preparing a long list of works and investment opportunities." IG's Chris Beauchamp says the warning lights are flashing fast for investors. (SOUNDBITE) (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "We have a Greek government that's committed to a showdown of one form or another with its euro zone creditors and its counterparts in the rest of the currency union and I think investors have deserted Greece as a result." Greeks stock rebounded a little after a rout on Wednesday. But there were more warnings from Europe - "stick to the rules" said the ECB. No waiver for Greece said France, although it might allow more time to pay off debts. Germany urged Athens not to burden the rest of Europe with its internal politics - the Economy Minister adding...... (SOUNDBITE) (German) GERMAN ECONOMY MINISTER, SIGMAR GABRIEL, SAYING: "It remains a sad reality that Greece still has one of the most unfair wealth distributions in Europe. We Germans have experience here. Those who still had assets after World War Two gave something away in order to help those who had lost everything." But that's not a quick process and time may not be on Greece's side. (SOUNDBITE) (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: ''Greek banks are going to come under heavy pressure, both in terms of depositors because they'll be worried that Cyprus is the example to look to here, with all the dangers that that implies for their deposits." Banks deposits were down for a third month in a row in December. Another decline is almost certain this month.

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Alarm bells over new Greek policies

Thursday, January 29, 2015 - 02:25