Greece's ambitious hard-left government on Thursday ran into trouble with Germany and the European Central Bank but vowed to push ahead with its electoral pledge to renegotiate the country's unpopular bailout.
After a positive start to this week's meetings with European leaders, Berlin poured cold water on Greece's hopes just as the ECB dealt a blow to its funding.
"We even didn't agree to disagree from where I'm standing," a subdued-looking Greek Finance Minister Yanis Varoufakis told a news conference following talks with his counterpart Wolfgang Schaeuble.
Since winning elections on January 25, the Syriza government of 40-year-old Prime Minister Alexis Tsipras has asked its creditors for time to propose new reforms that will replace the unpopular EU-IMF bailout agreement.
But Germany remains opposed and in a stunning move, the ECB said it would no longer accept Greek government bonds as collateral for loans.
The ECB move makes it less attractive for the banks to hold the government bonds, for which they have been practically the only buyers, thus putting the government's ability to raise short term funds on the market in question.
Addressing his newly elected lawmakers in parliament on Thursday, Tsipras insisted he would carry out his party's promises to end the "nightmare" of austerity in Greece.
"We are a sovereign country, we have democracy, we have a contract with our people, we will honour this agreement," Tsipras said in a speech frequently interrupted by applause.
"Fear is over in Greece. Terror and blackmail are over.... The Greek republic cannot be blackmailed because democracy in Europe cannot be blackmailed," he added.
A few hours later, several thousand people gathered in Syntagma Square in Athens, the scene of some of the most violent protests against the programme of austerity imposed by Greece's creditors, to urge the government to stay strong.
"We support our government's unshakeable position," the protest organisers said on Facebook, where they had announced the demonstration shortly after the ECB's announcement late on Wednesday.
"We send our solidarity to all people in Europe who are waiting on Greece to send the message of dignity," they said.
- 'Down from the clouds' -
During a tour of European capitals this week, Tsipras and Varoufakis had received a friendly welcome, while their creative proposals for restructuring Greece's huge international loans were cautiously welcomed by economists.
Syriza promised to regain the country's dignity in negotiations with creditors, and the strong government line has struck a chord at home.
"I like how we are no longer going to Europe on our knees, but standing up. We may go down, but we'll go down with our heads held high," said Athens taxi driver Panagiotis Poulopoulos.
But Berlin remains sceptical about Greece's bailout proposals and is strongly opposed to any reduction in Greece's debt, while the ECB move was a brutal return to reality.
"The ECB decision is the beginning of a process to bring the Syriza government down from the clouds," said Thanassis Diamantopoulos, a professor of political science at Athens' Panteio University.
Analysts say Germany's rebuff could again inflame anti-German sentiment dating back to the Nazi occupation of the country during the Second World War.
"The intransigence of the ECB and of Germany could backfire," said political analyst Ilias Nikolakopoulos.
"People will close ranks around Syriza. Europeans underestimate the anti-German feeling in Greece," he said.
In Berlin, Varoufakis also refered the rise of Nazism in Germany after World War I as a reminder of the dangers of pushing a country to desperation.
"I think that of all countries in Europe the Germans understand best this simple message," he told Germany's ARD public broadcaster.
"If you humiliate a proud nation for too long... without light at the end of the tunnel, then the pressure will rise in this country at some point."