Greek PM Tsipras quits and calls elections after party rebellion

[webfact]

Greek prime minister calls elections after party rebellion
ELENA BECATOROS, Associated Press
NICHOLAS PAPHITIS, Associated Press

ATHENS, Greece (AP) — Greek Prime Minister Alexis Tsipras resigned Thursday and called early elections, hoping for a new, stronger mandate to implement a three-year bailout program that sparked a rebellion within his radical left party.

In a televised address to the nation, Tsipras said his government had got the best deal possible for the country when it agreed to an 86 billion euro ($95 billion) bailout from other eurozone countries.

The rescue was all that kept Greece from a disastrous exit from the euro but came with strict terms to cut spending and raise taxes — the very measures Tsipras had pledged to fight when he won elections in January.

His U-turn in accepting the demands by the country's creditors led to outrage among hardliners in his Syriza party, with dozens voting against him during the bailout's ratification in parliament last week, which was approved thanks to support from opposition parties.

Tsipras has insisted that although he disagrees with the conditions of the bailout terms, he had no choice but to accept and implement them to keep Greece in the euro, which the vast majority of Greeks want.

With the country's finances now secured, Tsipras said he felt obliged to let the Greek people evaluate his work.

"Now that this difficult cycle has ended ... I feel the deep moral and political obligation to set before your judgment everything I have done, both right and wrong, the achievements and the omissions," he said in the address. "The popular mandate I received on January 25 has exhausted its limits."

Greece's European creditors did not appear dismayed by Tsipras' move, which comes less than seven months into his four-year mandate.

But Moody's credit rating agency warned in a statement that the snap elections "could elevate (bailout) program implementation concerns and, potentially, puts future (rescue loan) disbursements at risk."

Tsipras formally submitted his resignation to the country's president, Prokopis Pavlopoulos, to begin the election process. This will involve letting the two main opposition parties — the conservative New Democracy and the Nazi-inspired Golden Dawn — try to form a government.

Each party can spend up to three days trying to do so, and New Democracy leader Evangelos Meimarakis said he will use his available time. Neither party, however, is expected to have the support in parliament to be able to form a government.

Tsipras did not mention a date for the election, although it will have to be held within the next month, with government officials saying Sept. 20 is the likeliest date.

The European Union's executive Commission said it "takes note" of the election announcement. "Broad support for (bailout deal) and sticking to commitments will be key for success," spokeswoman Annika Breidthardt said in a tweet.

Tsipras had delayed a decision on whether to call new elections until after Greece received the first installment from the bailout and made a debt repayment to the European Central Bank, both of which it did Thursday.

Despite his policy reversal, Tsipras continues to enjoy popular support and was far ahead of his opposition rivals in opinion polls, although none have been published since the bailout agreement was finalized.

Tsipras will also be calculating that he might get a better election result if polls are held before voters feel the impact of the steep tax hikes and spending cuts demanded by the bailout program.

In his Thursday night address, he acknowledged the bailout deal was not what his anti-austerity government had wanted.

"I wish to be fully frank with you. We did not achieve the agreement that we were hoping for before the January elections," he said. "But ... (the agreement we have) was the best anyone could have achieved. We are obliged to observe this agreement, but at the same time we will do our utmost to minimize its negative consequences. Our target will be to regain our sovereignty from our creditors as soon as possible."

Quoting Turkish left-wing poet Nazim Hikmet, he added, "Our best days have yet to be lived."

If Tsipras wins the elections, a new mandate will allow him to move away from the hardliners in his party, some of whom have openly advocated leaving the euro and returning to the drachma. The hardliners, including prominent members such as former energy minister Panagiotis Lafazanis and possibly the flamboyant former finance minister, Yanis Varoufakis, are likely to split from Syriza.

Some analysts took the reports of early elections as an indication that Greece will struggle to implement the terms of its bailout.

"Given its anti-austerity roots, the remaining Syriza party will still struggle to implement the demanding bailout conditions, especially in the likely event that Greece sinks further into recession," said Jennifer McKeown, senior European economist at Capital Economics. "And major reforms seem unlikely to be passed in the period running up to the election."

Teneo Intelligence analyst Wolfango Piccoli said that while Tsipras' gamble to consolidate his power is expected to pay off, it probably will delay the first review of the new bailout program, "especially considering that the caretaker government will not be able to implement any meaningful policy measures."

Greeks were initially taken aback by the prospect of a second national election in well under a year.

"I believe that it is too soon to have elections in such a short time," said Georgia Kiritsa. "The people decided eight months ago ... this government should have continued and the elections should have been postponed."

Another Athenian, Alexandros Brilis, said, "These are not good moves for our country. Every now and then we have elections, that has a cost."

However, initial reaction from European authorities appeared cautiously optimistic. Martin Selmayr, head of the cabinet of European Commission President Jean-Claude Juncker, tweeted that quick elections "can be a way to broaden support for (the bailout) stability support program."

The political uncertainty took its toll on the market, with the Athens Stock Exchange closing 3.5 percent down on election speculation.

"For the stock markets it is a factor of uncertainty," said analyst Evangelos Sioutis, head of equities at Guardian Trust Securities.

Greek banking is still restricted under capital controls imposed in late June to stem a bank run sparked after Tsipras called a referendum on creditor proposals for reforms following a breakdown in bailout negotiations. There are weekly limits on cash withdrawals and Greeks can only transfer up to 500 euros abroad per month. Companies have faced problems paying suppliers abroad, with all international payments requiring a laborious process of approval by a special finance ministry committee.

"Greece has capital controls, the economy is choking, and we will now have uncertainty from elections, so you understand that it has been a difficult month," Sioutis said.
____

Lorne Cook in Brussels, Costas Kantouris in Thessaloniki, Greece, Raphael Kominis and Pietro de Cristofaro in Athens contributed to this report.


-- (c) Associated Press 2015-08-21

[Kerryd]

So after all the rhetoric and bluster by the guy who forced an election and won it by opposing the incumbent government's acceptance of a bail-out plan, has accepted essentially the same bail-out plan and is calling for another election.

So the next step is to see who wins the election. I'm betting it'll be a minority, coalition gov't with no real power. Tsipras's party will probably splinter into hard line "no austerity, taxes or cuts of any kind" and "OK, we'll accept this but will go back to the way things were before at the first sign of any kind of improvement" groups who will then try to team up with one of the other parties. Hearing that one of the opposition parties is "Nazi-inspired" really has my head shaking.

Somehow I doubt any party will be willing to actually force the changes needed to get them back on their feet and self-sufficient again. Except (unfortunately) the "Nazi-inspired" one which came in 3rd (out of 7 parties) in their last elections of January 2015. They won 17 seats in the Greek (Hellenic) Parliament but with only 6.3% of the total votes I don't think they're much of a threat (yet). However, 17 seats could make a huge difference in a coalition gov't. Scary.

Everyone will try to appease as many voters as they can with the old "nudge nudge, wink wink" routine when it comes time to discuss the tax increases and belt tightening. In the end though I can't see things improving significantly for a long, long time.

[Anthony5]

So after all the rhetoric and bluster by the guy who forced an election and won it by opposing the incumbent government's acceptance of a bail-out plan, has accepted essentially the same bail-out plan and is calling for another election.

So the next step is to see who wins the election. I'm betting it'll be a minority, coalition gov't with no real power. Tsipras's party will probably splinter into hard line "no austerity, taxes or cuts of any kind" and "OK, we'll accept this but will go back to the way things were before at the first sign of any kind of improvement" groups who will then try to team up with one of the other parties. Hearing that one of the opposition parties is "Nazi-inspired" really has my head shaking.

Somehow I doubt any party will be willing to actually force the changes needed to get them back on their feet and self-sufficient again. Except (unfortunately) the "Nazi-inspired" one which came in 3rd (out of 7 parties) in their last elections of January 2015. They won 17 seats in the Greek (Hellenic) Parliament but with only 6.3% of the total votes I don't think they're much of a threat (yet). However, 17 seats could make a huge difference in a coalition gov't. Scary.

Everyone will try to appease as many voters as they can with the old "nudge nudge, wink wink" routine when it comes time to discuss the tax increases and belt tightening. In the end though I can't see things improving significantly for a long, long time.

And the newly elected party will declare all bail out agreements unconstitutional and void, after they collected the money of course.

[empireboy]

"I'm taking my bat and my ball and I'm going to sit in the corner and suck my thumb until .... who the heck knows when. Until I feel like it! So there!!!

[Friendly Stranger]

The greek public are the suckers. This guy comes in saying this and that, with a referendum vote to boot.

A bad bluff that the EU called.

So what do the Greeks do now? More promises by a political party?

Lets just hope they're not so desperate to vote in crazies.

Edited August 21, 2015 by Friendly Stranger

[Basil B]

So predictable, his position was untenable and has been ever since he said vote for me, no more austerities...

And just waiting for the first party to say "vote for us, we will tear up all agreements"....

I feel the EU and IMF should suspend all payments (and repayments) until the next government ratifies all the negotiated deals.

[ggold]

He lost any credibility when he didn't take Greece out of the Euro. He was in over his head! This fiasco isn't over yet, I still think the Euro is finished.

[Srikcir]

Tsipras took his nation through 8 months of economic hell only to agree to an economic package that his opponent would have made had they won the election.

Tsipras' continued pursuit for PM is for the sake of his need for power and has little to do with the needs of his nation. Democracy doesn't guarantee happiness, only the means to deliver it. The Greeks will have to decide the price they will pay for a better future.

[Rancid]

Seems like he was a trojan horse. Regardless, Greece has tried the Conservatives and now the Left, none were good for tackling a corrupt system. All that is left is the crazy Right, all that would achieve is the Nazi goosesteppers out on the streets like in US puppet Ukraine.

[elgordo38]

He lost any credibility when he didn't take Greece out of the Euro. He was in over his head! This fiasco isn't over yet, I still think the Euro is finished.

Yes he is in over his head. If the IMF link is not in the chain the deal is doomed. First he ordered a referendum and then turned his back on the results and the PEOPLE (typical politician) and signed a deal worse than the one he rejected. How could the Greeks put one iota of faith in this guy. Now he wants the voters to believe in Santa Claus(himself) Right Turn Clyde.

[elgordo38]

The greek public are the suckers. This guy comes in saying this and that, with a referendum vote to boot.

A bad bluff that the EU called.

So what do the Greeks do now? More promises by a political party?

Lets just hope they're not so desperate to vote in crazies.

Quote "So what do the Greeks do now? More promises by a political party?" unquote Its not just Greece its world wide. They the politicians are putting out so much Baloney that Greece and the rest of the world is starting to look like one big sausage factory. Bull puckey.