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Thu 29 Jan 2015 11:19 AM

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UAE leaders congratulate new Greek Prime Minister

In one of his first moves since victory on Sunday, Alexis Tsipras began halting privatisation plans agreed under the country's bailout deal

UAE leaders congratulate new Greek Prime Minister
Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum. (Getty Images)

Vice President and Prime Minister and Ruler of Dubai HH Sheikh Mohammed bin Rashid Al Maktoum on Wednesday sent a congratulatory cable to the newly elected Prime Minister of Greece Alexis Tsipras, the official state news agency WAm reported.

Sheikh Mohammed greeted Tsipras and wished him success on assuming his new post. He also wished further progress and prosperity to the people of Greece.

"We look forward to deepening our bilateral relations with Greece for the mutual interests of the two friendly countries," he added.

A similar cable was sent to the Greek Prime Minister by HH General Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

In one of his first moves since been sworn in on Monday, Tsipras threw down an open challenge to international creditors on Wednesday by
halting privatisation plans agreed under the country's bailout deal, prompting
a third day of heavy losses on financial markets.

A swift series of announcements signalled the newly
installed government would stand by its anti-austerity pledges, setting it on a
collision course with European partners, led by Germany, which has said it will
not renegotiate the aid package needed to help Greece pay its huge debts.

Tsipras, who was also congratulated by US President
Barack Obama in a phone call for his decisive election victory on Sunday, told
the first meeting of his cabinet members that they could not afford to
disappoint voters battered by a plunge in living standards under austerity.

After announcing a halt to the privatisation of the
port of Piraeus on Tuesday, for which China's Cosco Group and four
others had been short-listed, the government indicated it would put the whole
programme on hold.

It said it would stop the sale of stakes in the
Public Power Corporation of Greece, Greece's biggest utility, and
refiner Hellenic Petroleum, and put other planned asset sales of
motorways, airports and the power grid on ice.

The government also plans to reinstate public
sector employees judged to have been laid off unfairly, including a group of
finance ministry cleaners whose case attracted publicity last year, and
announced rises in pensions for retired people on low incomes.

Uncertainty over the new government's relations
with the European Union went beyond economic policy. A day before the EU is
expected to extend sanctions against Russia for six months, Greece's energy
minister said the country was against sanctions. Athens had already dissented
over a joint statement from the bloc on Ukraine on Tuesday.

Tsipras, who met Russia's ambassador to Athens on
Monday and the Chinese envoy the next day, told ministers that the government
would not seek "a mutually destructive clash" with creditors. But he
warned that Greece would not back down from demanding a renegotiation of debt.

"We are coming in to radically change the way
that policies and administration are conducted in this country," he said.

Financial markets have taken fright. Greek bank
stocks plummeted more than 26 percent on Wednesday, taking their
cumulative losses since the election to over 40 percent.

The overall Athens stock market fell over 9 percent, while Greek five-year government bond yields hit around 13.5 percent.
This marked their highest level since a 2012 restructuring which wrote off a
large proportion of Greek debt held by private investors.

Reflecting the concern, Standard and Poor's cut its
outlook on Greek sovereign debt to negative from stable.

Deputy Prime Minister Yannis Dragasakis sought to
reassure markets, saying private investors would be taken into account when the
administration implements actions, but the business world remained sceptical.

"You've got a government that's
anti-privatisations, so I think all privatisations will be put on hold,"
said one industry banker, who spoke on condition of anonymity. "The
reality is, if you're a new owner, do you want to have a government who doesn't
like you? Best to move on to the next thing."

Newly appointed Finance Minister Yanis Varoufakis,
who on Friday meets Jeroen Dijsselbloem, head of the euro zone finance
ministers' group, said negotiations would not be easy but he expected the sides
would find common ground.

"There won't be a duel between Greece and
Europe," he said, at his first meeting with reporters since taking office.

Varoufakis said he would meet the finance ministers
of France and Italy -- both countries which have pressed for a change of course
in Europe from rigid budget orthodoxy -- in the coming days.

France has ruled out a straight cancellation of
Greece's debt, about 80 percent of which is held by other euro zone governments
and multinational organisations such as the IMF. However, Paris has said it
would be open to talks on making Greece's debt burden more sustainable and
Tsipras is expected to meet President Francois Hollande before an EU summit on February

The response from Germany was frosty. Economy
Minister Sigmar Gabriel said Athens should have discussed the halt to
privatisations with its partners before making an announcement.

"Citizens of other euro states have a right to
see that the deals linked to their acts of solidarity are upheld," he
said, adding that it would be the "wrong solution" for Greece to quit
the euro but it was up to Athens to decide.

Fears that talks between the new government and its
creditors will break down, with unforeseeable consequences for Greece's future
in Europe, fuelled a third successive day of turmoil on the markets.

However despite the air of crisis, some observers
thought a deal was possible that could satisfy both Athens and Berlin. A French
diplomatic source said he expected that the Feb. 28 deadline with European
lenders would probably be extended.

"It's not decided yet because there needs to
be an agreement and the Germans and the Finns must go back to their parliament,
but we will probably extend the expiration date of the programme," the
source said.

Tsipras said the government would pursue balanced
budgets but would not seek to build up "unrealistic surpluses" to
service Greece's massive public debt of more than 175 percent of gross domestic

Priorities would be helping the weakest sections of
society, with policies to attack cronyism and corruption, reduce waste and cut
Greece's record unemployment.

* With Reuters

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