Greece to hold early elections on Sept 20

The Greek constitution stipulates that when a government resigns, the president should ask the second and third biggest parties – now the centre-right New Democracy and the neo-Nazi Golden Dawn – to try to form a new administration.

After the TV announcement, he went to Greek president Prokopis Pavlopoulos to submit his resignation.

GREEK Prime Minister Alexis Tsipras has resigned, paving the way for a new general election and thrusting the beleaguered country into another period of political instability. Tsipras led his party to power in January vowing to undo and fight such measures. Last week, 13 MPs announced the formation of an anti-bailout movement.

(Giannis Kotsiaris/ InTime News via AP).

The Greek prime minister first considered the option of holding a vote of confidence in parliament, but according to media reports he has changed his mind and is now thinking of early elections.

With little chance for the opposition to form a government, Greece, which has faced a worsening financial crisis for the past five years, is headed for its fifth national election in six years.

Hardline lawmakers in Tsipras’ radical left Syriza party announced Friday they were splitting from him and the party and forming their own movement, which becomes the third largest group in Parliament.

So far, Greece’s European creditors seemed sanguine about the election, which had been widely expected.

Without a parliamentary majority, Tsipras was essentially hamstrung.

Jeroen Dijsselbloem, the Dutch finance minister who chairs the so-called Eurogroup of his eurozone peers, said the reform-for-aid accord formally approved Wednesday would hopefully give Greece a new lease on life.

In Brussels, European Commission spokeswoman Annika Breidthardt said the EU executive body was confident the bailout program would be implemented. The group, named Popular Unity, will be led by former energy minister Panagiotis Lafazanis.

“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.

If that fails, parliament is dissolved and a caretaker government is appointed to lead the country to elections.

Tsipras’ reversal in accepting such terms for the bailout caused outrage among Syriza hardliners. But he was forced to move quickly after almost a third of Syriza lawmakers refused to back the programme in parliament last week, robbing him of his majority.

Greece’s Prime Minister Alexis Tsipras on Thursday announced his resignation and has called an early election.

Analysts at Societe Generale said the latest development could prevent the passing of bailout-related legislation – including pension reform and spending measures – until after the elections.

With the fresh money, Greece was able to repay a €3.2 billion debt to the European Central Bank and to avoid a messy default.

Here is a look at what comes next for Greece and what the elections mean for the bailout, the 86 billion euro ($95 billion) package of loans that is keeping the country solvent and part of Europe’s joint currency, the euro. He is betting on a stronger mandate if polls are held before voters feel the impact of the steep tax hikes and spending cuts.

Information for this article was contributed by Elena Becatoros, Nicholas Paphitis, Lorne Cook, Costas Kantouris, Raphael Kominis and Pietro de Cristofaro of The Associated Press; and by Jack Ewing and Niki Kitsantonis of The New York Times.