Malta will not write off money it loaned Greece four years ago but flexibility in repayment terms may be necessary, according to Prime Minister Joseph Muscat.

Cutting Greek debt was not an option for the eurozone but some form of compromise will have to be reached, Dr Muscat said yesterday as Greece’s far-left Syriza party lost no time to form an anti-austerity coalition government.

“Lengthening repayment terms is a compromise that shows flexibility but the money Malta and other countries have loaned Greece will have to be paid back,” he insisted.

This was the same line adopted by eurozone finance ministers at their meeting yesterday.

Opposition leader Simon Busuttil said solidarity with Greece must go hand in hand with responsibility by Greece. “I would not support a new deal that increases the burden on Maltese taxpayers.”

Syriza leader Alexis Tsipras was sworn in as prime minister yesterday after his party formed a coalition with right-wing anti-austerity independents. Syriza won Sunday’s election ending two seats short of an outright parliamentary majority.

Syriza wants to renegotiate the €240 billion bailout and slow austerity cuts that have plunged many Greeks into poverty.

The victory initially sparked big falls on financial markets sending the euro to an 11-year low against the dollar. However, Europe’s main markets reversed earlier falls and the euro regained lost ground as talks of a compromise over Greece’s bailout terms rekindled hope.