ATHENS Rebels opposed to Greece’s international bailout walked out of the leftist Syriza party on Friday, formalizing a split after its leader Alexis Tsipras resigned as prime minister and paved the way for early elections.
Greece’s president gave the conservative opposition a chance to form a new government following Tsipras’s resignation on Thursday, but the country appears almost certain to be heading for its third election in as many years next month.
Tsipras is hoping to strengthen his hold on power in a snap election after seven months in office in which he fought Greece’s creditors for a better bailout deal but had to cave in and accept more onerous terms.
Far left Syriza members, who oppose the promises of yet more austerity and economic reform that Tsipras made to secure 86 billion euros ($97 billion) in bailout loans, broke away to form a new party.
A deputy speaker of parliament announced the new party would be called Popular Unity and headed by former Energy Minister Panagiotis Lafazanis, who was fired by Tsipras earlier this year for refusing to back the government.
With 25 lawmakers, the party will be the third largest bloc in Greece’s 300-seat parliament, albeit far behind Syriza which had 149 before the split.
The split may allow Tsipras to move Syriza a little closer to the political center and broaden his appeal among voters, which remains strong despite Greece’s near-brush with financial collapse under his premiership.
Tsipras had long been expected to seek early an election in the autumn. But he was forced to move quickly after nearly a third of Syriza’s lawmakers refused to back the new bailout program in parliament last week, robbing him of his majority.
Greek shares .ATG fell 0.2 percent in early trading while 10-year bond yields GR10YT=TWEB rose sharply.
Outgoing Deputy Finance Minister Tryfon Alexiadis said only an election could stabilize Greece.
“Elections surely have an indirect cost … but will clear things up so we can move ahead,” he told the state TV channel ERT. “There are political forces which consider the bailout a salvation. Syriza was forced to make this political choice but not because of ideology.”
There was some sympathy for the dilemma facing the former prime minister. One voter, programmer Christianos Misailidis, said Tsipras could not continue to rely on the votes of the opposition to pass bills in parliament.
“Since his own party members weren’t helping him out, he had to do something to ensure that a government is viable. Right now, it is as if there is no government,” Misailidis said.
SUCCESSES AND FAILURES
In accordance with the constitution, President Prokopis Pavlopoulos formally invited conservative leader Vangelis Meimarakis on Friday morning to try to form a new government without the need for a new elections.
However, his New Democracy Party has just 76 members of parliament and is almost certain to fail to find enough partners among an opposition that ranges from the KKE communists to the ultra-right Golden Dawn party.
If Meimarakis has no coalition agreement within three days, the constitution says the next biggest party should be given a chance, but an election is a virtual certainty.
With Greece’s future in the euro under threat, Tsipras was forced to accept the creditors’ demands for yet more austerity and economic reform – the very policies he had promised to scrap when he was elected in January.
Announcing his resignation, Tsipras acknowledged his record had been patchy. “We did not achieve the agreement we expected before the January elections,” he told the Greek people. “I feel the deep ethical and political responsibility to put to your judgment all I have done, successes and failures.”
Under his leadership, Greece had to close the banks for three weeks as panicking savers pulled billions from their accounts, and strict curbs on withdrawals from the banking system remain, badly hurting business.
The economy, which had finally begun to grow slightly after a long depression, began shrinking again under Tsipras, although it bounced back in April-June, according to data that puzzled many economists. The economy is still expected to shrink more than two percent this year, costing yet more jobs in a country with over 25 percent unemployment.
Nevertheless, Tsipras remains popular although no opinion polls have been taken for almost a month, and he appears to have no serious rivals to prevent his return to power.
Across the euro zone, some leading politicians warned Greece to stick to the promises of yet more austerity and economic reform that Tsipras made when he staged a U-turn to secure the bailout and pull Greece back from the brink of financial collapse.
“The Greeks have no alternative. They know the new package will stop immediately if commitments are not met. Even if a new government was elected it couldn’t change anything,” said Michael Fuchs, a leading German conservative.
“If the Greeks don’t implement the reforms they will no longer receive a euro of aid. It’s up to them to decide,” Fuchs, who is deputy conservative leader in the German parliament, told Italy’s Corriere della Sera newspaper.($1 = 0.8885 euros)