ATHENS – Greek Prime Minister Alex Tsipras is resigning, government officials said today, and will call a snap election for September 20. The austerity program he signed on to in Brussels last month has left considerable in-fighting in his own Syriza Party so after just seven tumultuous months in power he will seek another mandate from the electorate.
He has no guarantee of winning the day but despite the great turmoil Greece is going through he has maintained a strong popularity among Greeks. He inherited turmoil in the form of not a crumbling but a crumbled economy. He and his government signed on to a bailout program with the European Union in early July and he narrowly got it through the Greek parliament.
Harsh EU austerity measures
Greece has $95 billion in debt and the EU, under the leadership of German Chancellor Angela Merkel, did not let Greece off lightly in the deal. Besides mandating harsh pension reforms and increased sales taxes, Greece was forced in the deal to allow for greater competition in industry and make labor law changes favorable to business.
The country must also oversee the privatization of the state’s power company while placing 50 billion euro worth of state-owned companies, along with other assets, into a fund to help pay off debt; that measure is also intended to stimulate the economy and so generate new taxes.
Before the Greek parliament voted on (and passed) the deal Tsipras, said “We had a very specific choice: a deal we largely disagreed with, or a chaotic default.”
Greek analysts complained at the time that their country had given up too much sovereignty in the deal with the EU and while Parliament passed it the in-fighting in his own party began in earnest, with fully one-third of his elected party members failing to back the deal he signed. Asking for and getting another mandate from the electorate should quell any potential uprising within his party.
The Syriza Party is the first far-left party elected to govern in Greece’s modern history. Latest polls have them with 33.6 percent support among voters. There are some 21 parties fighting for power in Greece and last election Syriza won 149 seats out of 300, just two shy of an absolute majority. Should they win again in September they are likely to continue to need coalition help.
Also on Thursday, the first installment of financial aid from the austerity package Tsipras signed came due and Greece used it to repay a debt to the European Central Bank.