Greek bailout: Alexis Tsipras steps down to trigger new elections

Jon Henley Friday 21 August 2015

Prime minister announces his resignation and paves way for general election, with 20 September predicted as most likely date for a poll

Alexis Tsipras resigns: ‘I am proud of the battle I have fought’ Video 

Seven months after he was elected on a promise to overturn austerity, the Greek prime minister, Alexis Tsipras, has announced that he is stepping down to pave the way for snap elections next month. As the debt-crippled country received the first tranche of a punishing new €86bn (£61bn) bailout, Tsipras said on Thursday he felt “a moral obligation to place this deal in front of the people, to allow them to judge … both what I have achieved, and my mistakes”.

The 41-year-old Greek leader is still popular with voters for having at least tried to stand up to the country’s creditors, and his left-wing Syriza party is likely to be returned to power in the imminent general election, which government officials told Greek media was most likely to take place on 20 September.

Greek PM resigns to trigger snap elections - as it happened

Greece will head back to the polling booths as Alexis Tsipras asks for a new mandate to implement the third Greek bailout

Read more

The prime minister insisted in an address on public television that he was proud of his time in office and had got “a good deal for the country”, despite bringing it “close to the edge”. He added that he was “shortly going to submit my resignation, and the resignation of my government, to the president”. The prime minister will be replaced for the duration of the short campaign by the president of Greece’s supreme court, Vassiliki Thanou-Christophilou – a vocal bailout opponent – as head of a caretaker government.

Tsipras won parliamentary backing for the tough bailout programme last week by a comfortable margin, but suffered a major rebellion among members of his ruling Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained.

The revolt by hardliners, angry at what they view as a betrayal of the party’s anti-austerity pledges, left Tsipras short of the 120 votes he would need – two-fifths of the 300-seat assembly – to survive a censure motion, leading to speculation that he would call an early confidence vote.

He has now decided to skip that step, opting instead to go straight to the country in an attempt to silence the rebels and shore up public support for the three-year bailout programme, which entails a radical overhaul of the Greek economy and major reforms of health, welfare, pensions and taxation.

Government sources had long suggested that an announcement on early elections was on the cards as soon as Athens had got the first instalment of the new package – Greece’s third in five years – and completed a critical €3.4bn debt repayment to the European Central Bank, due on Thursday.

Some analysts had speculated that the prime minister might wait until early October, by which time Greece’s creditors would have carried out their first review of the country’s reform progress and perhaps come to a decision about debt relief – a potential vote-winner for the prime minister.

Greek bailout Q&A: What happens next?

Now that Greece has received approval from creditors for its third bailout, we explore the next step in the process

Read more

But he appears to have calculated that it was better to go to the polls sooner rather than later, aiming to capitalise on his popularity before the effects of some of the harshest new bailout measures – including further pension cuts, VAT increases and a controversial “solidarity” tax on incomes – started to make themselves felt.

Greece’s complex constitutional laws mean that, because Tsipras was elected less than a year ago, President Prokopis Pavlopoulos cannot immediately call an election when the prime minister resigns.

Instead, he must first consult the other major parties to see if they could form a government – a near impossibility given the current makeup of the parliament.

Greece’s main opposition party leader Vangelis Meimarakis is to meet Pavlopoulos on Friday morning, according to an official from Meimarakis’s New Democracy party said. But the move is seen as largely procedural, with Meimarakis standing little chance of pulling together the numbers to form a governing coalition.

At the end of a bruising seven months of negotiations with Greece’s international lenders that nearly resulted in the country defaulting on its mammoth debts and crashing out of the euro, Tsipras was eventually forced to sign up to a rescue package that many in his party view as an unforgivable U-turn.

Greece crisis timeline: the rocky road to another bailout

Will they, won’t they plot of latest Greek bailout drama has seemingly reached a conclusion. We look back at the year’s twists and turns

Read more

Tsipras has insisted that accepting creditor demands for further tough reforms was the only way to ensure his country remains in the Eurozone – which is what opinion polls show the overwhelming majority of the Greek population want.

Syriza is now likely to split, with a formal announcement thought to be imminent. The leader of the party’s dissident Left Platform, the former energy minister Panagiotis Lafazanis, announced last week that he intended to form a new anti-bailout movement, accusing the government of capitulating to the “dictatorship of the Eurozone”.

The prime minister’s closest aides had conceded on Thursday that the divisions within Syriza had to be dealt with one way or another. The energy minister, Panos Skourletis, told state broadcaster ERT: “The political landscape must clear up. We need to know whether the government has or does not have a majority.” The party is now thought likely to call an extraordinary congress in September to resolve its internal differences.

The credit rating service Moody’s warned that the ensuing political uncertainty could hit Greece’s ability to implement tough reforms under its bailout programme and receive rescue loans in exchange.
“The Greek prime minister Tsipras’s move to step down and call snap early elections on 20 September could elevate programme implementation concerns and potentially puts future official sector disbursements at risk,” said Moody’s.

Recent opinion polls have put support for Syriza at about 33%-34%, making it by far the country’s most popular party – but not popular enough to govern without a coalition partner. No polls have been published since late July, but Syriza insiders remain optimistic.

Dimitris Papadimoulis, a Syriza MEP, told Mega TV: “These elections ... will provide a stable governing solution. My feeling is that Syriza will have an absolute majority.”

The political uncertainty took its toll on markets on Thursday, with Greek two-year bond yields jumping 78 basis points to 12.15% – well above the level considered sustainable – and the Greek stock market closing down 3.5%.

Greek bailout: Alexis Tsipras steps down to trigger new elections | World news | The Guardian