Greece towards new elections


Last Thursday, the Greek Prime Minister, Alexis Tsipras, has announced that he was stepping down to pave the way for snap elections next month. The resignation came after an anti-bailout mutiny by his party’s eurosceptics that formally ended his parliamentary majority.
Albeit working to secure the best possible rescue package for his country, Tsipras stated that he felt “a moral obligation to place this deal in front of the people, to allow them to judge … both what I have achieved, and my mistakes”; thus a clear new mandate from the Greek people is needed.

Elected in January, Tsipras won elections vowing to end austerity and promising to tear up Greece’s bailout agreement, preventing further pension cuts and delivering a major boost to social spending. But its efforts to resist to creditor’s demands led to an economic slowdown of Greece and paved the way for a Grexit. Thus, facing a near collapse of the Greek financial system which threatened the country’s future in the euro, Tsipras was forced to sign the so-called Third Memorandum and to accept tough economic reforms in exchange of a 86 billions bailout. Nonetheless, when asking for Parliamentary approval, Tsipras has suffered a major rebellion among members of his ruling Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained.
Now, the country is going back to the polls for the second time in 2015. Tsipras argued this election is about bringing certainty to Greece’s future, but in the short-term at least it will create political uncertainty. The elections will most likely take place on 20 September. Some political commentators had speculated that the Prime Minister might wait until early October, when Greece’s creditors would have carried out the first review of the country’s reform progress and perhaps come to a decision about debt relief, a potential vote-winner for the Prime Minister. Some others believe that calling for snap election should allow Tsipras to capitalise on his popularity with voters before the effects of tough reforms, like pensions cut, will start to bite. In this way, the leftwing Syriza party will return to power without anti-bailout rebels in Syriza to slow him down.

Reacting to the news, lenders showed some concerns on the snap elections, which lead to political uncertainty that could hit Greece’s ability to implement tough reforms under its bailout programme and potentially puts future rescue package at risk.

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