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08/12/2016

Greek PM says he may have to call early election

Elections

Greek PM says he may have to call early election

Alexis Tsipras on 13 July [The Council]

Greek Prime Minister Alexis Tsipras said on Wednesday (29 July) he may have to call an early election to bolster a parliamentary majority that has been strained by bailout reforms demanded by creditors.

About three dozen of his 149 lawmakers have refused to back reforms agreed by Tsipras at a European summit on July 13, forcing him to rely on opposition support to push through the legislation in exchange for a third bailout.

“I would be the last person to want elections, if I had the secured parliamentary majority to make it through to the end of the four-year term,” he said in an interview with Sto Kokkino radio station.

“But if I don’t have a parliamentary majority, we will be forced to go to elections.”

Several ministers have suggested that an election could be held in the autumn, most likely after final talks on the multi-billion euro bailout programme are wrapped up.

EU/IMF envoys started bailout talks with the government in Athens this week. They may demand additional reform measures to be legislated in August before releasing any further loans.

But Tsipras said he would not implement anything beyond what was agreed in Brussels earlier this month.

Months of arduous negotiations and capital controls have taken their toll on the feeble Greek economy and the leftist government would want to avoid any further austerity measures.

He said Greece would post a zero primary budget surplus, or possibly even a deficit, this year, depending on the economy’s performance in the coming months.

“I know what is the framework of the decision we signed,” Tsipras said. “Regardless of whether or not we agree or disagree with these conventional obligations, we will implement them. But nothing beyond that.”

Members of Syriza’s central committee are meeting on Thursday to discuss the future of the fragmented party, which is under pressure due to the revolt by members of the far-left Left Platform wing.

Tsipras said an emergency party congress could be held in September to redefine party strategy.

Background

Eurozone leaders reached an agreement on a programme to save Greece from bankruptcy after 17-hour talks on 13 July.

>> Read: Eurozone reaches ‘laborious’ tentative deal on Greece

If approved, this will be the third rescue programme for Greece in five years. It will be managed by the European Stability Mechanism (ESM), the eurozone permanent crisis resolution fund that was initially set up five years ago in an effort to save Athens from bankruptcy.

Here is a look at what Greece must do:

  • request continued support from the International Monetary Fund after its current IMF program expires in early 2016
  • streamline consumer tax and broaden the tax base to increase revenue. Laws on this are due by Wednesday
  • make multiple reforms to the pension system to make it financially viable. Initial reforms are due by Wednesday, others by October
  • safeguard the independence of the country's statistics agency
  • introduce laws by Wednesday that would ensure "quasi-automatic spending cuts" if the government misses its budget surplus targets
  • overhaul the civil justice system by 22 July to make it more efficient and reduce costs
  • carry out product market reforms that include allowing stores to open on Sundays, broadening sales periods, opening up pharmacy ownership, reforming the bakeries and milk market and opening up closed and protected professions, including ferry transport
  • privatise the electricity transmission network operator unless alternative measures with the same effect can be found
  • overhaul the labour market. This includes reviewing collective bargaining, industrial action and collective dismissal regulations
  • tackle banks' non-performing loans and strengthen bank governance
  • significantly increase the privatization program, transferring €50 billion worth of Greek assets to an independent fund, based in Greece, to carry out the privatisations
  • modernise, strengthen and reduce the costs of Greek administration, with a first proposal to be provided by 20 July
  • allow members of the three institutions overseeing Greece’s reforms - the European Central Bank, IMF and European Commission, previously known as the 'troika" - to return to Athens. The government must consult with the institutions on all relevant draft legislation before submitting it to public consultation or to parliament
  • reexamine, with a view to amend, legislation passed in the last six months that is deemed to have backtracked on previous bailout commitments.