“I am resigning because I have now exhausted the mandate which the public gave me in January’s general election”, Tsipras said during his televised address on Thursday night.
The new anti-bailout Popular Unity party set up by the far leftists is expected to steal some anti-euro voters away from Tsipras.
The split was announced Friday, hours after Prime Minister Alexis Tsipras called early elections in response to his resignation, according to the New York Times.
For many Greeks, Tsipras’ resignation leading to the third election in the country in three years signals a risk of returning to deeper political turmoil and economic instability.
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.
The commission will nonetheless closely monitor implementation of the next wave of major reforms, expected for October.
However, in a first reaction to the developments the leader of the main opposition conservative New Democracy party Vangelis Meimarakis said during an emergency press briefing that his party will make the utmost effort to avoid the polls for the benefit of Greek people.
Jeroen Dijsselbloem, the head of the Eurogroup of eurozone finance ministers, also urged Greece to hold the election “swiftly, to lose as little time as possible”. The party will be led by former energy minister Panagiotis Lafazanis, who was strongly opposed to the bailout deal, reports say.
The move will leave Greece in the hands of a caretaker government until the vote, which would be the second in just eight months and the fourth since 2012.
They hope to form a government following the resignation of Alexis Tsipras as prime minister.
But the deal came with strict terms for mroe belt-tightening.
When Greece’s parliament voted on the package last week, Mr Tsipras had to rely on opposition lawmakers for the bill to pass. He was forced to move quickly after almost a third of Syriza members refused to back the programme in parliament last week, robbing him of his majority.
Opting for a fresh election was seen as an attempt by Tsipras to face down the internal challenge by Syriza rebels and strengthen his position. “Regardless the election, Greece’s problems will not disappear anywhere”, he told Helsingin Sanomat newspaper.
“Now that this hard cycle has ended…”
“If it is necessary for us to cancel the memorandum, we will follow the course of exiting the euro“, he stressed.
Tsipras acknowledged Thursday that the bailout deal was not what his government had wanted.
“The way things are now… we believe it is impossible for this parliament to produce a government”, Theodorakis said after the meeting. “But… (the agreement) was the best anyone could have achieved”.