Greece's new government seeks allies in ending painful austerity measures

Greece's radical new government has begun a search for European allies for its anti-austerity agenda, but German Chancellor Angela Merkel once again ruled out debt relief for Athens.

Prime Minister Alexis Tsipras and his maverick Finance Minister Yanis Varoufakis are reaching out to France and Italy, whose centre-left governments are most likely to sympathise with Greece's determination to end painful reforms. Varoufakis was heading to Paris late yesterday, bringing forward a European tour that was due to start in London tomorrow and will also include Rome.

Predictably, the tour does not include Germany, which has shouldered the bulk of Greece's huge bailout and where officials have already expressed outrage at the new Greek government's plans to renegotiate the rescue.

Merkel yesterday ruled out fresh debt relief for Greece."There has already been voluntary debt forgiveness by private creditors. Banks have already slashed billions from Greece's debt," she said.

Greece is lumbered with a debt pile of more than €315 billion (HK$2.76 trillion).

The hard-left Greek government, which took office on Monday, has pledged to rip up the terms of the rescue package that helped Greece avoid a financial meltdown in 2010 and erased half the country's debt. In its first week in power, the government scrapped the privatisation of the country's two main ports, including a stake by China's Cosco Group, and the state power company, and announced a major raise in the minimum wage.