Greek bailout: PM, Tsipras to resign, call snap elections

The Greek prime minister, Alexis Tsipras, has decided to step down and call snap elections for 20 September, government officials said.
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.
Greece will head back to the polling booths next month as Alexis Tsipras decides to resign to tackle dissent within his own party over the bailout
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.
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 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.
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.
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.
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.
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.
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.
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.
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”.

Read also: Greece gets lifeline as lenders agree on bailout

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 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.
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.”
The political uncertainty was taking its toll on markets, with the Athens Stock Exchange down 2.8% in afternoon trading.
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.”
Credit: theguardian

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