Tsipras Resigns, Calls For Snap Elections
NEW DELHI: Greece’s Prime Minister Alexis Tsipras has resigned and called for snap elections, in a move that is at the same time being looked at as an effort to strengthen his hold as well as a measure of defeat.
Tsipras submitted his resignation to Greek President Prokopis Pavlopoulos and asked for the earliest possible election date. Sources suggest that Tsipras was looking to crush the opposition within the leftist Syriza party and receive public support for his government’s efforts to secure a bailout deal for cash strapped Greece, the third such deal since 2010.
However, a measure of defeat is also evident in the decision, with Tsipras saying, “I want to be honest with you. We did not achieve the agreement we expected before the January elections.” Faced with a collapsing financial system, Tsipras -- whose government was resisting the austerity measures tied to a bailout package -- capitulated and instead, ended up accepting even harsher terms. "I feel the deep ethical and political responsibility to put to your judgment all I have done, successes and failures,” he said.
Tsipras decision underscores the political uncertainty plaguing the Greek debt crisis, with the leader announcing his resignation the very day Greece started receiving funds under its 86 billion-euro ($96 billion) bailout program. This round of funds comes five years after a previous government took the first bailout from the euro zone and IMF.
The tough move is one that Tsipras probably had no choice but to take, with the best case scenario allowing him to return to power sans the vocal anti-bailout rebels within his party. It will also give him surer footing before the next stage of the terms, where further pension cuts, more value-added tax increases, and a "solidarity" tax on incomes begin to take hold.
The decision to step down shouldn’t come as a surprise, as Tsipras was expected to take action on his dwindling support base within the part. However, the timing of the move was hastened by the fact that nearly a third of Syriza lawmakers refused to back the program in parliament last week, thereby ending Tsipras’ majority.
A vocal critic amongst the party, lawmaker Dimitris Stratoulis, even hinted at the prospect of a splintering group emerging, calling for a "political and social front which will be anti-austerity, democratic and patriotic". "It will have as a goal to cancel the previous two bailout agreements and the third bailout agreement that the current government voted for, and to replace them with a policy of growth," he said as quoted by Reuters.
The latest developments indicate that despite a deal being reached, the Greek debt crisis is far from over. The deal was arrived at in July after 17 hours of negotiations, prompted by Germany taking a tough stand and offering Greece -- which had till then been trying to bargain and not budge on certain austerity demands, such as further pension cuts -- an ultimatum. Germany said that Greece could take a “time-out" from the eurozone if it failed to meet the conditions -- an offer that many said resembled a forced ejection.
The harsh demands that Greece finally agreed to included sequestration of Greek state assets to be sold off to pay down debt. Greek state assets worth up to 50 billion euros will be placed in a trust fund beyond the Greek government’s reach -- to be sold off with proceeds going directly to pay down debt. Greece also had to drop resistance to a full role for the International Monetary Fund in a proposed 86 billion euro ($95.78 billion) bailout, which German Chancellor Angela Merkel has declared essential to win parliamentary backing in Berlin.
If a deal had not been reached, Greece would have been faced with shuttered banks on the brink of collapse and the prospect of having to print a parallel currency, with an eventual exit from the European Monetary Union.
With this, ironically, Greece -- which had rejected harsh austerity measures that would secure the $1.8bn in funds that it needed for a payment to the International Monetary Fund -- was subjected to even harsher terms.
Tsipras had put the matter to a historic vote, with over 60 percent of Greeks voting “Oxi” or no to the terms of an international bailout. Greece's governing Syriza party had campaigned for a "No", saying that the vote would give the country more leverage on the bargaining table.
Instead, Greece agreed in the form of “Yes” -- or rather, was forced to give in, with the new demands seemingly punishing the country for failing to accept the earlier terms. As nobel prize winning economist Joseph Stiglitz wrote, “ it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies… Many European leaders want to see the end of Prime Minister Alexis Tsipras’s leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.”
The question is: will this entire fiasco result in the end of Tsipras and bring down the Greek government? The elections will tell, but if Tsipras is re-elected, as he is expected to be, it will be without the vocal anti-bailout rebels within Syriza -- and that is precisely what Greece’s creditors want. 1-0 to the creditors.