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New Greek PM Alexis Tsipras says his country will not default on its debts.
Addressing his first cabinet meeting since Sunday’s victory, Mr Tsipras said he would negotiate with creditors over the €240bn (£179bn; $270bn) bailout.
“We won’t get into a mutually destructive clash, but we will not continue a policy of subjection,” said the left-wing Syriza party leader.
The EU has warned his government to stick to its commitments. A default could force Greece out of the euro.
Mark Lowen looks at the issues around a possible debt “haircut”
As the newly elected leader of the radical left party made his inaugural cabinet speech, Greek government bond yields rose to near record levels – reflecting investors’ concerns about short-term risks of a debt restructuring over the coming months. The Greek stock market fell 6.4%.
Greece has endured tough budget cuts in return for its 2010 bailout, negotiated with the so-called troika – the European Union, International Monetary Fund (IMF) and European Central Bank (ECB).
The economy has shrunk drastically since the 2008 global financial crisis, and increasing unemployment has thrown many Greeks into poverty.
Analysis: Mark Lowen, BBC News, Athens
Alexis Tsipras sought to strike a balance – defiant about negotiating debt relief from the eurozone, while reassuring his European partners.
Across the eurozone, governments oppose a debt write-off for Greece.
The Netherlands has added its voice to that of Germany and France in insisting that Greece stick to its previous commitments. The Dutch finance minister, who heads Eurozone group of ministers, will be in Athens later this week for discussions.
Both sides will try to stick to their positions – and it may come down to which will blink first.
Mr Tsipras’s speech is, perhaps, an olive branch extended from Athens after hardline pre-election rhetoric, but there is no sign that the new government will back down on its opposition to austerity.
BBC