Greek Prime Minister Alexis Tsipras Resigns, Clearing Way for Elections in Bid to Uphold Bailout Deal
Premier’s gamble is expected to lead to his re-election in September
ENLARGE
Greek Prime Minister Alexis Tsipras, in front, arrives Thursday at the presidential palace in Athens, where he handed his resignation to President Prokopis Pavlopoulos.
Greek Prime Minister Alexis Tsipras resigned in a bid to trigger snap elections and return to power stronger, plunging his country into weeks of political paralysis just as it seemed to have scraped through a summer of fraught bailout talks and near-bankruptcy.
Mr. Tsipras’s gambit, announced in a short televised address late on Thursday, is expected to lead to his re-election in September, thanks to his popularity and the absence of strong challengers. But whether elections bolster his grip on Parliament, as he hopes, hinges on his ability to persuade Greeks that the €86 billion ($96 billion) bailout he negotiated with Europe is the only path out of the country’s long crisis.
Greece’s head of state, President Prokopis Pavlopoulos, was expected to accept Mr. Tsipras’s proposal to hold the vote on Sept. 20.
The election will effectively be a referendum on the 41-year-old Mr. Tsipras and his bailout agreement with the rest of the eurozone.
The deal commits Greece to further years of stringent economic retrenchment, including tax increases and cuts to pension entitlements. Greeks elected Mr. Tsipras and his left-wing Syriza party only in January this year to put an end to five years of unpopular austerity measures, which the country’s creditors demanded in exchange for bailout loans.
Related Video
Greece and its international creditors reached agreement on the terms of the country’s new bailout program, which if ratified by other eurozone countries could unlock essential financing over the next three years. Charles Forelle has the details.
Mr. Tsipras’s acceptance in July of creditors’ policy demands followed months of diplomatic confrontation. The standoff ultimately led to Greece defaulting on its debts to the International Monetary Fund and imposing capital controls, further battering Greece’s depressed economy.
The premier’s U-turn has split Syriza. Dozens of his lawmakers have withheld support for legislation needed to clinch the bailout package. Mr. Tsipras has had to rely on the votes of opposition parties, but they have warned they won’t prop him up for long.
In his address, Mr. Tsipras admitted the talks with creditors had been tough, and the results not what he had hoped. “We gained considerable ground without that meaning that we achieved what we, and the Greek people, wanted,” he said. “Now that the difficult cycle has reached its end…I feel the deep ethical and political obligation to put to your judgment all I have done.”
Elections offer Mr. Tsipras the chance to expel the rebels from Syriza and return to office as head of a more cohesive party. Greek and European policy officials hope that such an outcome could improve Mr. Tsipras’s ability to pass painful retrenchment measures and keep the bailout loans flowing.
On Thursday, Greece received its first disbursement of financial aid in a year, in the form of €13 billion from the eurozone bailout fund, called the European Stability Mechanism. Most of that money immediately went toward repaying Greece’s debts, including €3.2 billion in maturing government bonds that were held by the European Central Bank.
“Swift elections in Greece can be a way to broaden support for the ESM stability support programme just signed by PM Tsipras on behalf of Greece,” Martin Selmayr, a senior official at the European Commission, said in a tweet.
A Way of Life Drowned by Greece’s Crisis
But the monthlong election period means little progress will be possible in carrying out Greece’s rescue program, since the caretaker government that will now replace Mr. Tsipras’s administration has no mandate other than to see Greece through to the vote. Under Greek law, the interim government will be led by the head of the country’s supreme court, Vassiliki Thanou-Christophilou, who is set to become the first woman to serve as Greek prime minister.
Opinion polls suggest Mr. Tsipras is well placed to return as prime minister. But the shape of the next government is uncertain. An outright parliamentary majority for Mr. Tsipras and the part of Syriza that is loyal to him is possible, but unlikely, analysts say.
More likely is another coalition government—either with Syriza’s current partner, the right-wing nationalist Independent Greeks, or with centrist parties currently in opposition.
Syriza’s antibailout rebels are expected to form a new party that supports taking Greece out of the euro rather than acceding to creditors’ austerity demands. How well that party does in the election could be a harbinger of the public discontent that Mr. Tsipras will face in coming months as he carries out the retrenchment prescribed by the bailout program.
From Mr. Tsipras’s point of view, Syriza’s likely split into two parties will end weeks of infighting.
“That’s important if the government is to make a good fist of implementing the program,” says Nick Malkoutzis, founder of Athens-based political analysis website MacroPolis. “But it won’t end the wear and tear that has affected all governments that have implemented these bailouts since 2010,” Mr. Malkoutzis says.
All of Greece’s leaders during the country’s long debt crisis have suffered a steady erosion of their support in Parliament and the nation as they enacted the austerity measures that creditors wanted. To break that cycle, Mr. Malkoutzis says, Greece would need a sustained economic recovery, after losing around a quarter of its economic output in recent years.
ENLARGEGreek Prime Minister Alexis Tsipras, in front, arrives Thursday at the presidential palace in Athens, where he handed his resignation to President Prokopis Pavlopoulos.
Greek Prime Minister Alexis Tsipras resigned in a bid to trigger snap elections and return to power stronger, plunging his country into weeks of political paralysis just as it seemed to have scraped through a summer of fraught bailout talks and near-bankruptcy.
Mr. Tsipras’s gambit, announced in a short televised address late on Thursday, is expected to lead to his re-election in September, thanks to his popularity and the absence of strong challengers. But whether elections bolster his grip on Parliament, as he hopes, hinges on his ability to persuade Greeks that the €86 billion ($96 billion) bailout he negotiated with Europe is the only path out of the country’s long crisis.
Greece’s head of state, President Prokopis Pavlopoulos, was expected to accept Mr. Tsipras’s proposal to hold the vote on Sept. 20.
The election will effectively be a referendum on the 41-year-old Mr. Tsipras and his bailout agreement with the rest of the eurozone.
The deal commits Greece to further years of stringent economic retrenchment, including tax increases and cuts to pension entitlements. Greeks elected Mr. Tsipras and his left-wing Syriza party only in January this year to put an end to five years of unpopular austerity measures, which the country’s creditors demanded in exchange for bailout loans.
Related Video
Greece and its international creditors reached agreement on the terms of the country’s new bailout program, which if ratified by other eurozone countries could unlock essential financing over the next three years. Charles Forelle has the details.
Mr. Tsipras’s acceptance in July of creditors’ policy demands followed months of diplomatic confrontation. The standoff ultimately led to Greece defaulting on its debts to the International Monetary Fund and imposing capital controls, further battering Greece’s depressed economy.
The premier’s U-turn has split Syriza. Dozens of his lawmakers have withheld support for legislation needed to clinch the bailout package. Mr. Tsipras has had to rely on the votes of opposition parties, but they have warned they won’t prop him up for long.
In his address, Mr. Tsipras admitted the talks with creditors had been tough, and the results not what he had hoped. “We gained considerable ground without that meaning that we achieved what we, and the Greek people, wanted,” he said. “Now that the difficult cycle has reached its end…I feel the deep ethical and political obligation to put to your judgment all I have done.”
Elections offer Mr. Tsipras the chance to expel the rebels from Syriza and return to office as head of a more cohesive party. Greek and European policy officials hope that such an outcome could improve Mr. Tsipras’s ability to pass painful retrenchment measures and keep the bailout loans flowing.
On Thursday, Greece received its first disbursement of financial aid in a year, in the form of €13 billion from the eurozone bailout fund, called the European Stability Mechanism. Most of that money immediately went toward repaying Greece’s debts, including €3.2 billion in maturing government bonds that were held by the European Central Bank.
“Swift elections in Greece can be a way to broaden support for the ESM stability support programme just signed by PM Tsipras on behalf of Greece,” Martin Selmayr, a senior official at the European Commission, said in a tweet.
A Way of Life Drowned by Greece’s Crisis
But the monthlong election period means little progress will be possible in carrying out Greece’s rescue program, since the caretaker government that will now replace Mr. Tsipras’s administration has no mandate other than to see Greece through to the vote. Under Greek law, the interim government will be led by the head of the country’s supreme court, Vassiliki Thanou-Christophilou, who is set to become the first woman to serve as Greek prime minister.
Opinion polls suggest Mr. Tsipras is well placed to return as prime minister. But the shape of the next government is uncertain. An outright parliamentary majority for Mr. Tsipras and the part of Syriza that is loyal to him is possible, but unlikely, analysts say.
More likely is another coalition government—either with Syriza’s current partner, the right-wing nationalist Independent Greeks, or with centrist parties currently in opposition.
Syriza’s antibailout rebels are expected to form a new party that supports taking Greece out of the euro rather than acceding to creditors’ austerity demands. How well that party does in the election could be a harbinger of the public discontent that Mr. Tsipras will face in coming months as he carries out the retrenchment prescribed by the bailout program.
From Mr. Tsipras’s point of view, Syriza’s likely split into two parties will end weeks of infighting.
“That’s important if the government is to make a good fist of implementing the program,” says Nick Malkoutzis, founder of Athens-based political analysis website MacroPolis. “But it won’t end the wear and tear that has affected all governments that have implemented these bailouts since 2010,” Mr. Malkoutzis says.
All of Greece’s leaders during the country’s long debt crisis have suffered a steady erosion of their support in Parliament and the nation as they enacted the austerity measures that creditors wanted. To break that cycle, Mr. Malkoutzis says, Greece would need a sustained economic recovery, after losing around a quarter of its economic output in recent years.
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