20 Aug 2015

Greek PM Alexis Tsipras resigns and calls snap elections

As the first money from a third bailout is paid out, the Greek Prime Minister Alexis Tsipras submits his resignation, telling the Greek people he did his best, but the people must now pass judgement.

The decision avoids Mr Tsipras having to face the possibility of losing a vote of confidence in parliament.

In a televised address, Mr Tsipras said he would seek the vote of the Greek people “to rule and continue our programme”, promising “we will fight to mitigate the adverse consequences” of the austerity programme.

While the prime minister remains popular among Greek voters he faces serious dissent among the members of his Syriza party, one third of whom voted against the austerity measures that he agreed to during the bruising seven month it took to secure a third EU bailout. He won the vote with opposition support but lost his guaranteed parliamentary majority.

Energy Minister Panos Skourletis said on Thursday “the political landscape must clear up. We need to know whether or not the party has or does not have a majority.”

A Syriza congress is expected to be called to thrash out differences with rebel members, but there is some internal dispute about whether this should happen before or after an election.

An opinion poll on 24 July found Syriza was the most popular party, with support at 33.6 per cent, but even so this would mean governing with a coalition partner.

‘Bring back your money’

On Wednesday the third bailout received final approval from EU institutions meaning that on Thursday, when funds were released, Greece was able to meet a 3.2bn euro debt repayment due to the European Central Bank – the last significant obligation to the ECB that Athens has for almost a year.

Following the payment Mr Tsakalotos called on Greeks to bring their savings back into the country, assuring them they could now trust the Greek banking system.

He told the Greek parliament ” I think that the Greek people from now on, whether they have money hidden under their mattress, as they say, or abroad, can now bring it back.”

Capital controls that set a limit to the amount depositors can withdraw from their accounts are expected to remain in place until banks are recapitalised later this year. They were brought in as an emergency measure in June to forestall a banking collapse.

Syriza in power
January 2015 Standing on an anti-austerity programme Syriza beats New Democracy in elections, winning 149 of 300 seats
February 2015 Syriza negotiates a four-month extension to Greece’s bailout and promises a eurozone-approved reform programme
June 2015 Capital controls are imposed as Greek banks face running out of money
July 2015 Voters reject EU bailout terms in a snap referendum called by Syriza
August 2015 Greece agrees a third bailout with its creditors, imposing further spending cuts to avoid bankruptcy and an exit from the euro