Greece's new finance minister failed to convince his skeptical German counterpart to immediately back a new approach on Greece's debt as the two met for the first time since the anti-bailout Syriza swept to power in Athens.

Germany's Wolfgang Schaeuble said he and Greece's Yanis Varoufakis, "agreed to disagree" at their meeting Thursday in the German capital, and that a writedown, or haircut of Greece's debt, wasn't on the negotiating table.

"Greece belongs to the euro," Schaeuble said. "But we don't really agree on what we have to do now despite a very intense, open discussion."

Germany's views matter as it is the biggest European contributor to Greece's five-year bailout program. Germany is a staunch proponent of the strict fiscal discipline that Greece has to impose in return for the rescue money that has prevented it going bankrupt. Still, the deep income and spending cuts hit the Greek economy hard. It's now around a quarter smaller than it was six years ago while unemployment, particularly among the young, is near record-high levels.

Varoufakis — who went out of his way to praise the veteran Schaeuble as "a European statesman for whom European unity is a lifelong project" — insisted that it's not Athens' intention to default on its debts and that it wants to carve out a new compromise deal that will be to the mutual benefit of Germany and Greece.

He said Greece would do everything to avoid any default and said he was confident that Athens and its partners would "put the D-word out of court."

"We didn't discuss Greece's debt schedule for repayments, we didn't discuss a (debt) haircut," Varoufakis said. "We set the scene for deliberations that will lead to an approach that will put an end to this seemingly never-ending crisis."

Varoufakis said the Greek government is looking for a bridging program between now and the end of May to give room for talks on "a new contract" with the European Central Bank, International Monetary Fund and European Union.

Schaeuble renewed offers to help Greece strengthen its tax system and said some things the new government has announced go in the right direction — such as getting the rich to pay tax and combating corruption.

But he said that "some of the measures that have been announced ... don't necessarily go in the right direction." He also made it clear that it's important to respect existing agreements, arguing that "reliability is the condition for confidence."

The discussions came as jittery investors dumped Greek shares after the European Central Bank tightened the screws on the country's banking system, in a move that many in the financial markets think piles pressure on the new government to swiftly conclude a compromise debt deal.

Shares on the volatile Athens stock exchange dived nearly 10 percent on opening, but later recovered a bit and were trading 3.3 percent down in mid-afternoon trading. The interest rate on Greece's 10-year bonds also ratcheted 0.63 percentage point higher to 10.42 percent.

The talks came a day after the ECB said it would stop lending to Greek banks using the nation's junk-rated government bonds as collateral. The ECB justified the move by saying prospects appear uncertain for a new deal between the radical left government in Athens and its international bailout creditors. Greek banks retain access to emergency lending, but at a higher cost and subject to ECB approval.

"It is difficult to see this as anything other than a very aggressive move by the ECB," said Gary Jenkins, chief credit strategist at LNG Capital.

Prime Minister Alexis Tsipras' 10-day-old government played down the impact on Greece's banking system and insisted that it would stick to its anti-austerity agenda. It said the ECB ruling put pressure on Athens and its creditors alike to strike a deal.

A complete cutoff from the ECB, including a refusal of more emergency credit, could pull the plug on Greek banks, leaving the government with no other source of funds to rescue them except for printing a new national currency. However, analysts say the ECB will be reluctant to make such a move unless politicians have exhausted all their options for a compromise.