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Greek crisis: Syriza rebels break away to form Popular Unity party Greek crisis: Syriza rebels form Popular Unity party ahead of election
(about 7 hours later)
Rebels within Greece’s ruling party, the leftwing Syriza movement led by the prime minister, Alexis Tsipras, have announced they are breaking away to form a separate entity called Popular Unity. Hardline rebels have confirmed an irreparable split in Greece’s ruling Syriza movement and broken away to form a new anti-austerity party as the country heads towards its fifth general election in six years.
Angry at what they see as a betrayal of Syriza’s anti-austerity principles, the 25 MPs announced their intention to form a new party in a letter to parliament the day after Tsipras resigned to pave the way for snap elections next month. The long-awaited move by up to 29 dissident Syriza MPs on Friday followed the resignation of the prime minister, Alexis Tsipras, who stepped down on Thursday to pave the way for a snap poll widely forecast to strengthen his hold on power.
Led by the former energy minister, Panagiotis Lafazanis, the new movement will be the third-largest group in the Greek parliament and could conceivably receive a mandate to try to form a new government. The new Popular Unity party, headed by the former energy minister Panagiotis Lafazanis, said it would fight the promises of further austerity and far-reaching reform that Tsipras made to Greece’s international lenders to secure a new €86bn (£62bn) bailout package.
Tsipras announced his resignation in a televised address on Thursday night. He said he felt a moral obligation to put Greece’s third international bailout deal, and the further swingeing austerity measures it requires, to the people. Lafazanis told a press conference the party would offer a realistic alternative to the deal. He said: “A new power is coming to the fore. We aim for government ... and we will not fall victim to blackmail. We want to become a great movement that will sweep the bailouts aside.”
Last week he piloted the punishing deal through the Greek parliament, but suffered a major rebellion when nearly one-third of Syriza MPs either voted against the package or abstained. Tsipras is gambling that he will be able to silence the rebels and shore up public support for the three-year bailout programme. The veteran former Communist party member listed Popular Unity’s key objectives as cancelling Greece’s three bailouts, writing down its mountain of debt and leaving the eurozone “if necessary” to help the country recover.
He said: “The country cannot take more bailouts. We will either finish off the bailouts, or the bailouts will finish off Greece and the Greek people. The country cannot breathe and stand on its feet unless a big part of the debt is cancelled.”
A revolt by nearly a third of Syriza’s 149 MPs during last week’s vote on the rescue package left Tsipras without a secure parliamentary majority, prompting him to resign ahead of elections that government officials said were most likely to take place on 20 September.
Related: Greek elections: Alexis Tsipras makes a calculated gambleRelated: Greek elections: Alexis Tsipras makes a calculated gamble
Speaking on BBC Radio 4’s Today programme, the Syriza labour minister, George Katrougalos, said the government needed to “reconfirm its mandate” to implement the third Greek bailout and that the party is “crippled by a number of dissident MPs”. Tsipras said he now felt a moral obligation to put Greece’s third international bailout and the further swingeing austerity measures it requires to the people.
“This is the essence of democracy, we do not have any problem to ask the people. We do not want to govern against the popular will,” he said, adding that Tspiras and his government were “confident in rightness of our policies and the maturity of the Greek electorate”. He insisted on Thursday that accepting creditor demands for a radical overhaul of the Greek economy, including major reforms of health, welfare, pensions and taxation, was the only way to ensure Greece remained in the eurozone, which opinion polls show is what the overwhelming majority of Greeks want.
Last week Tsipras successfully piloted the punishing three-year, €86bn package through the Greek parliament but only thanks to opposition backing: nearly one-third of his ruling Syriza party’s 149 MPs either voted against the package or abstained. In a televised address, Tsipras said: “I wish to be fully frank with you. We did not achieve the agreement that we were hoping for. But [the agreement] was the best anyone could have achieved. We are obliged to observe it – but at the same time we will do our utmost to minimise its negative consequences.”
Katrougalos said the government had managed “the best possible deal” when faced with “economic blackmail”. He added that democracy had functioned in Greece, but had failed at the EU level. One of the new party’s members, the MP and economist Costas Lapavitsas, noted that Greek voters had voted overwhelmingly against the punishing terms of the bailout deal offered by the eurozone and the International Monetary Fund (IMF) in June, only to be confronted by a policy U-turn from the prime minister.
The package entails a radical overhaul of the Greek economy and major reforms of health, welfare, pensions and taxation. Tsipras will be counting on securing re-election before its harshest effects – which include further pension cuts, VAT increases and a controversial “solidarity” tax on incomes – make themselves felt. He said on public television: “We want to give a voice to the 62% of the people who said no and do not want bailouts. We see strong support from the people who feel betrayed.”
On Friday, the Greek president, Prokopis Pavlopoulos, began the process of asking the main opposition party leaders whether they would be able to form a new government. Under the constitution, each of the three largest parties in parliament must now be offered a three-day mandate to try to build a coalition.
Related: As Tsipras uses the polls for his own ends, democracy fatigue threatens | David PatrikarakosRelated: As Tsipras uses the polls for his own ends, democracy fatigue threatens | David Patrikarakos
Asked whether there was a risk in a growth of support for rightwing parties in Greece, Katrougalos said there was no longer a “typical confrontation between left and right”, saying there was a clear difference between Syriza and “the political parties that support oligarchies”. Neither the centre-right New Democracy party nor Popular Unity, now the third largest parliamentary group, look likely to be able to muster a majority, leaving fresh elections the most probable outcome of the process.
The party’s success in the forthcoming election was not just a battleground for the country, but a test of whether Europe could “neutralise neo-liberal policies and counter balance recession measures with growth”, he said. The president of Greece’s supreme court, Vassiliki Thanou-Christophilou, will head a caretaker government in the runup to the vote, which must take place within a month of parliament being dissolved.
“Greece is going to be become the mirror of the future of Europe, depending on how we implement this difficult arrangement,” he said. “It was never just a Greek issue, it is a more broad confrontation between two visions of Europe, a social one and a neo-liberal one.” Tsipras’s resignation came within hours of the debt-crippled country receiving its first tranche of the new bailout funds, allowing it to make a critical €3.4bn debt repayment to the European Central Bank (ECB).
On Thursday night the Greek president, Prokopis Pavlopoulos, began the process of asking the main opposition party leaders whether they would be able to form a new government following Tsipras’ resignation. Eurozone leaders saw a chance in the early ballot to consolidate Greek reforms rather than viewing it as a disruptive process. On a visit to Brazil, the German chancellor, Angela Merkel, said Tsipras’s decision was was “part of the solution, not of the problem”.
The current makeup of the 300-member parliament makes that improbable, with neither the centre-right New Democracy party, the new Syriza rebel group Popular Unity, the far-right Golden Dawn or the centrist To Potami thought likely to have enough allies to govern. Thomas Wieser, the Austrian chair of the euro working group of senior eurozone officials preparing bailout policy, also sounded encouraged. He told Austrian radio he suspected Tsipras would turn out to be a more committed reformer of Greece than his predecessors on the centre right and left.
If no party can form a coalition government, parliament will be dissolved and fresh elections must then be held within a month. Government officials told Greek media on Thursday that the most likely date for the poll was 20 September. Tsipras spoke repeatedly to Jean-Claude Juncker, the European commission president, before calling the early election, said Annika Breidthardt, a commission spokeswoman. She said the commission had expected the early election call and was not surprised.
Despite being forced to accept the demands, which included further pension cuts, more VAT increases and a controversial “solidarity” tax on incomes – precisely the kind of policies he had promised to overturn when he was elected in January – Tsipras remains popular with Greek voters for at least having tried to stand up to the country’s creditors.
Related: Greek bailout Q&A: What happens next?Related: Greek bailout Q&A: What happens next?
Once parliament is dissolved, 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. There have been no opinion polls for nearly a month, but Syriza is by far Greece’s strongest political force and is likely to remain so even shorn of its rebels.
Tsipras, who swept to power elections seven months ago on a promise to end austerity, remains popular with many Greek voters for having at least tried to stand up to Greece’s creditors. He is widely tipped to win the poll, the country’s fifth in six years. Analysts suggest the vote may allow Tsipras to move Syriza closer to the political centre ground as he gambles on being able to sideline his dissidents and shore up broader public support before the harshest effects of the bailout package start to bite.
He insisted in his Thursday address that accepting creditor demands for further tough reforms was the only way to ensure Greece remained in the eurozone, which is what opinion polls show the overwhelming majority of the Greek population want. The Fitch ratings agency warned the election could hinder or delay the creditors’ planned October review of Greece’s progress under the new bailout programme and rekindle concerns about Athens’ ability to honour its pledges. Markets responded negatively to the political uncertainty, with the Athens stock exchange falling 2.7% and 10-year bonds rising sharply.
Tsipras said he was proud of his time in office and had got “a good deal for the country” after seven months of bruising negotiations with its international lenders, despite bringing it “close to the edge”. But the outgoing deputy finance minister, Tryfon Alexiadis, said only an election could stabilise Greece. He said: “Elections surely have an indirect cost … but they will clear things up so we can move ahead.”
He added: ”I wish to be fully frank with you. We did not achieve the agreement that we were hoping for. But [the agreement] was the best anyone could have achieved. We are obliged to observe it, but at the same time we will do our utmost to minimise its negative consequences.”
Greece’s European creditors did not appear to be dismayed by Tsipras’ widely expected move to call an early election.
Asked whether the election would change the numbers of the bailout deal, Thomas Wieser, the head of the Euro Working Group that prepares decisions for meetings of eurozone finance ministers, told Austrian broadcaster ORF: “No … This was really an expected step and for many people a desired step to get to a clearer structure in the Greek government … In October we have a meeting about a possible debt relief and (after the election) we hope for further progress of the programme.”