Greek Prime Minister Alexis Tsipras resigned yesterday (20 August), hoping to strengthen his hold on power in snap elections after seven months in office in which he fought Greece’s creditors for a better bailout deal but had to cave in.
Tsipras did not give a date for the new polls but they are expected to be held on 20 September, the state news agency ANA said, citing government sources.
In a live televised address to the nation, the 41-year-old premier said he had worked hard to secure the best possible rescue package for his country, but he now needed a clear new mandate from the Greek people after it cost him his parliamentary majority.
“Now that this difficult cycle has come to an end, I wish to submit to your judgement all that we have done,” Tsipras said, before meeting President Prokopis Pavlopoulous to formally hand in his resignation.
The move leaves Greece in the hands of a caretaker government until the vote.
Faced with a near collapse of the Greek financial system which threatened the country’s future in the euro, Tsipras was forced to accept the creditors’ demands for yet more austerity and economic reform – the very policies he had promised to scrap when he was elected in January.
“I want to be honest with you. We did not achieve the agreement we expected before the January elections,” he told the Greek people.
“I feel the deep ethical and political responsibility to put to your judgment all I have done, successes and failures.”
His decision deepens political uncertainty on the day Greece began receiving funds under its €86 billion bailout programme, five years after a previous government took the first bailout from the eurozone and IMF.
But a snap election should allow Tsipras to capitalise on his popularity with voters before the toughest parts of the latest programme – including further pension cuts, more value-added tax increases and a “solidarity” tax on incomes – begin to bite. This may allow him to return to power in a stronger position without anti-bailout rebels in Syriza to slow him down.
Jeroen Dijsselbloem, who chairs meetings of eurozone finance ministers, said he hoped the resignation would not delay or derail implementation of the bailout package.
“It is crucial that Greece maintains its commitments to the eurozone,” he said in a statement to Reuters.
Credit ratings agency Moody’s expressed concern about the latest twist in the debt saga.
“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,” it said in a statement.
But Martin Selmayr, chief of staff to European Commission head Jean-Claude Juncker, was more positive. “Swift elections in Greece can be a way to broaden support for ESM stability support programme just signed by Prime Minister Tsipras on behalf of Greece,” he tweeted ahead of the vote announcement, referring to the EU bailout fund.
Swift elections in Greece can be a way to broaden support for ESM stability support programme just signed by PM Tsipras on behalf of Greece.
— Martin Selmayr (@MartinSelmayr) August 20, 2015
Greece’s creditors are expected to welcome Tsipras’ bid to bolster his hand.
The premier’s resignation “is good economic news for Greece and for Europe”, said Marcel Fratzscher, head of economic research institute DIW and an advisor to Germany’s economics minister Sigmar Gabriel.
“This will improve the prospects for a successful third programme and thereby for more economic growth,” he said, though he warned of the short-term risks of a “political vacuum”.
Tsipras had long been expected to seek early elections in the autumn. But he was forced to move quickly after nearly a third of Syriza lawmakers refused to back the programme in parliament last week, robbing him of his majority. The Panhellenic Socialist Movement also refused to back Tsipras.
A leading rebel, Syriza lawmaker Dimitris Stratoulis, hinted that his faction might split formally from the party, declaring a “political and social front which will be anti-austerity, democratic and patriotic”.
“It will have as a goal to cancel the previous two bailout agreements and the third bailout agreement that the current government voted for, and to replace them with a policy of growth,” he said.
Greece’s complex constitution has special stipulations for holding elections less than 12 months after the previous vote, meaning the president should first give major opposition parties three days each to try to form a government.
New Democracy leader Vangelis Meimarakis said he would have a go, although the arithmetic of the current parliament means his New Democracy party has little chance of pulling a coalition together.
Meimarakis will meet the country’s president Prokopis Pavlopoulos on Friday morning to receive a mandate to form a new government, an official from Meimarakis’ New Democracy party said.
But given the arithmetic of the current parliament, New Democracy has little chance of pulling a coalition together.
Meimarakis took aim at Tsipras.
“He is a bit of a fibber. He might be likeable, but he is a bit cunning,” he told a news conference. “I feel he is fooling the Greek people, his comrades, and the Europeans … Did he get a bit too much sun in August?”
Tsipras nevertheless remains popular among his supporters for trying to stand up to the foreign creditors and with the opposition in disarray, he is widely expected to return to power.
A Metron Analysis poll on 24 July put support for Syriza at 33.6%, making it by far the most popular party, but not enough to govern without a coalition partner. No polls have been published since then due to the holiday season.
The prolonged standoff forced Athens to shut its banks for three weeks and impose capital controls before Tsipras accepted the bailout under threat of a financial collapse and Greek exit from the euro currency.
The first installment of aid allowed Greece to make a debt repayment to the European Central Bank that fell due on Thursday.