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Greek bailout: Alexis Tsipras to 'step down and call snap elections' Greek bailout: Alexis Tsipras steps down to trigger new elections
(about 3 hours later)
The Greek prime minister, Alexis Tsipras, has decided to step down and call snap elections for 20 September, government officials said. Seven months after he was elected on a promise to overturn austerity, the Greek prime minister, Alexis Tsipras, has announced he is stepping down to pave the way for snap elections next month.
As the debt-crippled country received the first tranche of its new €86bn (£61bn) bailout, Tsipras was set to make the formal announcement later on Thursday, government sources told Reuters.. 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 leftwing 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.
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Once he submits his resignation the prime minister would be replaced by the president of Greece’s supreme court, Vassiliki Thanou-Christophilou – a vocal bailout opponent – who would oversee the elections as the head of a transitional government. 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 he was “shortly going to submit my resignation, and the resignation of my government, to the president”.
Tsipras won parliamentary backing for the tough bailout programme last week by a comfortable margin despite a large-scale rebellion among members of his ruling leftwing Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained. Syriza governs in a coalition with the rightwing, anti-austerity party Independent Greeks (Anel). 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.
The revolt by hardliners angry at what they view as a betrayal of the party’s pledge to fight austerity left Tsipras short of the 120 votes he would need – two-fifths of the 300-seat assembly – to survive a censure motion and he was widely expected to call a confidence vote this week or next. 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.
He has now decided to skip that step, deciding instead to go straight to the country in an attempt to silence rebels and shore up public support for the draconian three-year bailout programme, which entails a radical overhaul of the Greek economy including further tax hikes, spending cuts and major reforms of health, welfare, pensions and taxation. 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 he would call an early confidence vote.
Tsipras appears to have calculated that it was better to call the elections early, before the effects of the new bailout measures – including further pension cuts, VAT increases and a “solidarity” tax on incomes – started to make themselves felt. 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 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.
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Some analysts had suggested he might wait until early October, by which time Greece’s creditors would have carried out their first review of the country’s progress in meeting the bailout conditions and perhaps come to a decision about debt relief – potentially a major electoral asset for the prime minister. 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.
Under Greece’s complex constitutional laws, President Prokopis Pavlopoulos cannot immediately call an election if Tsipras resigns, but must first consult the other major parties to see if they could form a government – a near impossibility given the current parliamentary arithmetic. Under Greece’s complex constitutional laws, 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 make-up of the parliament.
At the end of a bruising seven months of negotiations with Greece’s international creditors, the prime minister eventually signed up to a deal that many in his party view as a U-turn on the anti-austerity platform that swept it to power in elections last January. 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, the prime minister was eventually forced to sign up to a rescue package that many in his party view as an unforgivable U-turn.
Related: Greece crisis timeline: the rocky road to another bailoutRelated: Greece crisis timeline: the rocky road to another bailout
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 a key demand among the electorate according to opinion polls. 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 thought likely to formally split. The leader of its dissident Left Platform, the former energy minister Panagiotis Lafazanis, announced last week he intended to form a new anti-bailout movement, accusing the government of capitulating to the “dictatorship of the eurozone”. 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 said 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 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 party is now thought likely to call an extraordinary congress in September to resolve its internal differences.
Recent opinion polls have put support for Syriza at around 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 then, but Syriza insiders remain optimistic. Recent opinion polls have put support for Syriza at around 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 late July, but Syriza insiders remain optimistic.
Dimitris Papadimoulis, a Syriza MEP, told Mega TV: “These elections, whenever they are announced by the government, will provide a stable governing solution. My feeling is that Syriza will have an absolute majority.” 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 was taking its toll on markets, with the Athens Stock Exchange down 2.8% in afternoon trading. The political uncertainty took its toll on markets, 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%.
Analyst Evangelos Sioutis, who is the head of equities at Guardian Trust Securities, said: “The Greek stock market is coming into a new circle of uncertainty while we are waiting for new elections to be announced. For the stock markets, it is a factor of uncertainty.”