The horizon is not so far as we can see, but as far as we can imagine

What the Final Retreat Did to Greece’s Government

This bit from Ballast’s interview with Kouvalakis is important:

Some people suggest that Tsipras is buying time, and waiting for the Spanish general elections in November in order to have Pablo Iglesias’s support – that he is counting on a Podemos victory. Do you think that’s credible?

This type of argument is obviously false. In signing this agreement, Greece has been subjected to a straitjacket far worse that which the previous memorandums imposed. It is an institutional mechanism for putting the country under supervision and dismembering its sovereignty. It is not simply a matter of a list of very harsh austerity measures, as the naïve might imagine, but also means structural reforms that will reshape the core of the state apparatus: the Greek government is effectively losing control of the main levers of state power. The tax system will become a so-called ‘independent’ institution; in fact it is passing into the Troika’s hands. A budgetary policy council is being established, with the authority to impose automatic budget cuts if there is the least sign of Greece not meeting the surplus targets fixed in the memorandums. The statistics agency is also going to be ‘independent’, which in reality means that it will turn into an apparatus for the real-time surveillance of public policies – an apparatus directly controlled by the Troika. And all of the public assets that it is considered possible to privatise have been placed under the control of a body run by the Troika.

Now lacking in any control over their budgetary and monetary policy, Greek governments of any coloration will now be deprived of any means of action. The only thing that will remain under the control of the Greek state is the repressive apparatus. And we can clearly see that it is beginning to be used like it was before; that is, in order to repress social mobilisations.

Of course you can always end this sort of thing as long as you still control the police and military. But it does mean that any transition will be a bloody mess: You have to re-seize control, the people in the ministries aren’t likely to be loyal to you, you have to figure out who is loyal and fire the rest, then you have to bring in new people and try to implement your plan. It’s widely stated that the Greek civil service is corrupt, but this civil service will be disloyal.

Those who call this a coup are right. Once upon a time Germans had to fight to conquer Greece. Not this time.

The rest of the interview is worth reading: Kouvalakis notes that Syriza under Tsirpas went in without any backup plan in the event that “perhaps the Troika won’t give us a good deal just because we ask nicely and make good arguments.” Many people in Syriza thought this was a terrible idea, they were all overruled.

Tsirpas keeps looking worse and worse.

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  1. UKJim

    If you haven’t already, you should read Yanis Varoufakis interview at

    “This was nothing but a coup. In 1967 there were the tanks and in 2015 there were the banks. “

  2. it says something when the rich do not worry about the government, note the stock market is only down 30%

  3. Greg T

    This deal was an unmitigated disaster for Greece. While stopping short of blaming Tsipras, Stathis Kouvelakis spared no words in describing how this bailout agreement is far worse than previous ones.

    The Troika will see to it that all potential leverage of any new leftist government is taken away. I hoped Syriza could break this cycle of destruction, but it is evident that they were to be destroyed, not negotiated with.

    The Left Platform of Syriza will have to break off and form the base of an expanded left that is willing to fight Greater Europe. Who knows how long that will take? Who knows if that’s even possible? Meanwhile, Alexis Tsipras will lead a wide, but shallow coalition of pro-bailout parties, who will come under increased pressure as the renewed austerity assault takes hold.

    Ian- I think you nailed it. Greek defiance will have to involve the military, which means violence. Possibly a lot of it.

  4. But right before the bit that Ian quotes, Kouvelakis says:

    As for Russia, that was without doubt an avenue to explore. Syriza did try, but without truly believing in it: in reality, Russian diplomacy is very conservative. It isn’t at all interested in encouraging splits within the European bloc. In its talks with Syriza, what Russia was looking for was a government that would dissent from the West’s anti-Russian attitude following the Ukraine affair and the economic sanctions. But that depended on it remaining within the European Union and the euro! Despite a few big words Russia has never been an ally of the Syriza government: for me it’s doubtful that it would have been ready to do more if things had gone as far as a rupture.

    Greece was unlikely to get much help from beyond the Eurozone, and the Left Platform has as yet still not shown how practically the immediate third-world-ization of Greece can be avoided under a Plan B. A lot of Greek leftists have mocked the inaccessibility of Amazon under capital controls and the way that the elite squeals at it; but many people in present-day occupations require access to “cloud” services or have built businesses and stored data there, and therefore the Troika has a medium chokehold no matter what.

    As I said, Kouvelakis’ critiques to me all point to a left wing that doesn’t realize that there isn’t a BATNA that doesn’t involve very nasty things that many Europeans would rather starve than see.

  5. markfromireland

    Yes the civil service will be disloyal. They’re corrupt and ineffective, moreover they’re appointed on a clientilist basis. The current government haven’t had either the time or the opportunity to implement a program of appointing enough civil servants to control the ‘commanding heights’ of the public services. Nor will they ever get the opportunity to do so.


  6. Peter

    the Greek government is effectively losing control of the main levers of state power.

    Well, yes, but that’s the whole idea behind the EU and the Eurozone, a club Greece joined with great enthusiasm. Syriza and the European left generally could have called for a restructuring involving more integration of fiscal policies, a transfer mechanism, etc.. In other words, a hastening of the fulfillment of the original dream. Such would have implied even more relinquishing of state power by everyone. Instead it played the sovereignty card with a lot of rhetoric about democracy and reckless xenophobic name-calling, as if Greece were a conquered colony. Its strategy seems to have been based on the assumption Germany and the creditor nations would do anything to keep Greece from leaving. In the end, what was revealed was that the EU was prepared to cut Greece loose, but the Greeks would do anything to stay in. Epic fail.

    The left needs to come up with a coherent ideal of which way the EU should be heading, one based on more than 1960’s anti-colonial rhetoric and the romance of a devalued drachma.

  7. Pelham

    But Syriza DID have a backup plan, didn’t it?

    Isn’t that what everyone has been all faux upset and pointing fingers about over the past week or two? Varoufakis and the left platform in Syriza separately came up with secret plans to get out of the euro.

    The problem isn’t that Syriza didn’t have a plan. It’s that they didn’t implement it.

    As for Varoufakis’ remark on banks and tanks: It’s a nice observation, but it also raises the uncomfortable question of how many divisions the troika commands. The answer, of course, is none. On the other side is Greece, which presumably has some military capability, a fact that’s irrelevant except to the degree that it’s a symbol of agency, of any nation’s ultimate ability to largely determine its own fate if its leadership has the will to do so. That’s what is lacking in Syriza.

  8. Peter *

    Reading the Varoufakis el Pais interview shows that the new Trioka program of control of tax systems, Budget Commission and Statistics Agency applies to all EU countries as part of building the New EU with centralized control. It is aimed at Paris, Rome and Madrid who are not currently under a MoU that has deprived Greece of most any power over their own government and economy.

  9. call it what it is: bundkrieg.

  10. grayslady

    Thanks for the link on an excellent interview. I kept thinking, as I was reading some of Kouvlakis’ responses, that by substituting the words “United States” for “Greece”, the description of left political organizational–as well as intellectual–weaknesses applied almost verbatim.
    As to Greece specifically, I have to wonder how Tsipras could ever be chosen to lead the party. Did the older hands believe it was necessary for a more youthful compatriot to take the reins? Were the more experienced voices taken in by Tsipras, who doesn’t seem to have any track record of achievements? Are the wisest voices in Syriza simply armchair philosophers–especially since so many of them seem to be academics rather than organizers?
    Unfortunately, the article stresses only the political. If the Greeks are worried about being seen as a Third World country, they might start by providing vertical integration within the olive industry. How can anyone take Greece seriously from an economic standpoint if their main agricultural product can’t even be processed, bottled and marketed in-country?

  11. We are the super power, much as Britain was in the last crisis ( and the crisis before that truth be told). Greece is well, Greece. a tragically funny place which invented democracy, but likes to think of itself as the Byzantine Empire.

  12. Monster from the Id

    @Pelham: Greece’s military capability is irrelevant if the Greek military is so honeycombed with U. S.-cultivated traitors that no Greek government can trust the military to stand with it against Global Capital (which owns the U. S. Govt.–Capital is Sauron; Uncle Sam is merely the Lord of the Nazgul).

  13. Ivory Bill Woodpecker

    ^Well, shozbot. I goofed and used my old monicker. 😛

  14. Pelham

    @Monster from the Id

    It may be true, the military couldn’t literally be relied on — although now that I think about it, it would be interesting to see what happened if the government actually ordered them to do anything displeasing to the troika. Not sure what that would be, but if the generals rebelled, it would be highly embarrassing to one and all, especially the troika and the EU. It would have, I think, the effect of unmasking the whole EU enterprise in all its hideous intent.

    That said, I referred to the military as only a symbol of Greece’s supposed power and independence as a state. The fact that the troika possesses no similar institution illustrates the key difference between the two and (what I think is) the salient fact that even nations within the EU ultimately retain the power and dignity to act on their own. That being the case, the mystery here is why Greece hasn’t so acted.

    And that gets back to my main point, which I’m still not sure is a valid one: that Syriza did have contingency plans — albeit secretive — for leaving the euro. If this is the case, then Syriza’s screwup lay not in failing to produce a withdrawal plan but rather in a failure of nerve to go ahead with it when the troika demanded even harsher terms.

    Anyone: Does that sound about right or not?

  15. And that gets back to my main point, which I’m still not sure is a valid one: that Syriza did have contingency plans — albeit secretive — for leaving the euro. If this is the case, then Syriza’s screwup lay not in failing to produce a withdrawal plan but rather in a failure of nerve to go ahead with it when the troika demanded even harsher terms.

    Anyone: Does that sound about right or not?

    The thing that isn’t clear is how well the contingency plans would actually have worked. The truth is that there were many ways for the creditors to retaliate against a unilateral Grexit without Greece having a lot of backing from e.g. Russia. But it turns out that that backing just probably wasn’t there.

  16. Tom

    Well at least Tsipras hasn’t been dead for two years…

    Any chance Tsipras might get hit with a vote of no confidence?

  17. Peter *


    I’m glad you addressed the fantasy that Russia would or could play a significant role in the Greek crisis. Russia has a meager GDP especially for its size and population that is smaller than Italy’s or even Spain’s. Its economy is in or near recession and with oil price at $44 today recovery may be years away.

  18. V. Arnold

    @ Peter *
    August 6, 2015
    Obviously you drank the koolaide.
    Russia is nowhere near your depiction of its financial health.
    Russia is in fact thriving after sanctions; you need different news sources; CNN is still a lame source.
    You need to rotate your U.S. centric view about 180° to the Eurasian world view. In plain English; the western centric view is finished; but, like a snake, writhing with its head cut off, it doesn’t yet know it’s dead.
    The Russia/China economic block (SOC, BRICKS, AIIB) will prove dominant; crushing the western centric domination of the dollar; fasten your seat belt; a wild ride ahead…

  19. Ivory Bill Woodpecker

    I accept the possibility of the doom of Anglophone capitalist hegemony, though I lack the confidence of VA.

    I seem to recall the Communists, and their fanboys and fangirls outside of the Communist regions, predicted with similar confidence the demise of ACH and its replacement by Communism.

    Where is Communism now?

    Also, I suspect the most likely cause of death for both systems is the long-term consequences of environmental abuse by both systems, poetically labelled “Gaia’s Wrath”.

  20. Peter *


    I don’t depend on the MSM for information on Russia or anywhere else, there are Russian and other sources that show the reality of their situation. The inflation caused by the devaluation of the Ruble, sanctions and the fiscal effects of a more than 50% reduction in oil/gas revenues can’t be dismissed with press releases or wishful thinking.

    The BRICS are a defensive alliance that offers some protection from dollar dominance but with a country such as Brazil that has a GDP twice as large as Russia but still can’t treat the sewage its large cities produces is not much of a threat to US hegemony. China is the only real player in the BRICS and they are ‘helping’ Greece by buying their major port facilities at fire sale prices. The China/Russia gas pipeline deal is stalled now due to low prices with China seeking a better deal or they may buy LNG from Australia.

    The only ideology these countries follow now is Capitalist ideology and they are trying to position themselves as equal partners with the West in the New World Order. The US/West doesn’t want partners only vassals so the conflict will continue.

  21. I won’t argue the point here about whether there is some new Eurasian hegemonic narrative through which we should be looking at the world. I will say that I remain rather skeptical because such claims have been made repeatedly and never really panned out. China, for example, is unlikely to be waiting for the precise moment to pull the rug out from under the US economy and send it to the 19th century, at least not at any time scale that matters to any discussion here.

    What I will say is that even assuming Russia has the economic weight to support Greece after a Grexit, it wouldn’t have done so. Buying a NATO member like that is the political equivalent of putting nuclear missiles on Cuba. It isn’t done lightly or with the glee of a board game player who has found a way to put her opponent in Zugzwang. So I was always skeptical of this idea of the Axis of Pariahs. There was no cavalry coming over the hill in case of a Grexit.

    That is why I remain skeptical of all the Plans B and also the eagerness to decry Tsipras as either a stooge or incompetent for the reasons normally presented around here. The critique that he and Varoufakis thought they had more negotiating leverage than they did is the most plausible critique and explains most of what followed. But even that isn’t clear to me: that they could really have changed course considering the way that they came to power.

    A possible other, more reasonable critique is that they made the mistake of thinking, like romantic leftists, that they were building a left-wing coalition of alternative “partner” parties like Podemos — but actually, when they came to power, their partners were necessarily other governments, not other opposition parties. That’s a critique that makes sense to me but has other unpleasant implications.

  22. markfromireland

    For those following the Greek crisis the Financial Times has a report on how restrictive the terms of the latest bailout are:

    Memo reveals extent of control bailout monitors will have on Greece

    Stefan Wagstyl in Berlin and Duncan Robinson in Brussels

    But just how closely the Greek government will be controlled from the outside has only become fully clear this week with the release of the detailed memorandum of understanding between Athens and its bailout monitors.

    As a copy of the 29-page document obtained by the Financial Times reveals, the Greek government will have its hands bound on everything from overall budget planning to drug pricing, tourist rentals, farmers’ fuel tax breaks and the finer points of personal bankruptcy.

    The so-called prior actions, which Athens must pass through parliament before the deal, include eliminating recent cross-border withholding taxes, overhauling the tax administration, progressively raising the pension age to 67 and cutting pharmaceuticals prices.

    The Greek government must also reverse recent protective labour laws, open up a range of sectors to fuller competition and liberalise energy supplies for consumers by 2018.

    After the initial rush of the next couple of weeks, Athens will then commit to a broad range of fiscal, financial, regulatory and pensions reforms. Overhanging all this is a tough budget programme, which, as has been reported, involves going from a primary deficit of 0.25 per cent this year to surpluses of 0.5 per cent next year, 1.75 per cent in 2017 and 3.5 per cent in 2018 and beyond.
    Given that the document estimates that the crisis-hit Greek economy is heading for a 1.5 per cent primary deficit in 2015 in the absence of “additional measures”, Alexis Tsipras, the prime minister, has to hit the ground running. From early September, he will have just four months to cut this to 0.25 per cent, which is a 1.25 percentage point shift in four months — a staggering annual rate of adjustment of 3.75 per cent, and larger than what is expected for following years.

    EU officials separately revealed on Wednesday that the Greek economy is forecast to contract 2.3 per cent in 2015 and 1.3 per cent in 2016. EU officials predict that it will bounce back in 2017 with growth of 2.7 per cent that year, before accelerating to 3.1 per cent in 2018.

    The bailout monitors — the European Commission, the European Central Bank and the International Monetary Fund — are particularly keen to ensure that Athens sticks to the straight and narrow in banking.

    The MoU says: “No unilateral fiscal or other policy actions will be taken by the authorities, which would undermine the liquidity, solvency or future viability of the banks. All measures, legislative or otherwise, taken during the programme period, which may have an impact on banks’ operations, solvency, liquidity, asset quality etc. should be taken in close consultation with the EC/ECB/IMF and where relevant the ESM [the EU rescue fund that will finance most of the package].”

    In one contentious area key decisions have been postponed, as the final details of a proposed €50bn privatisation fund will not be released until December. The delay reflects continued arguments about the plan since Germany first proposed it at last month’s eurogroup summit. Berlin originally suggested basing the fund in Luxembourg in a move that brought protests from Athens about alleged economic colonisation. As later agreed at the summit, and as the MoU specifies, it will be “established in Greece and managed by the Greek authorities under the supervision of the relevant European institutions”.

    However, as the MoU makes clear, a task force will be set up to decide how the fund will be established, as well as its relationship with the Greek government.

    The issue of its size is somewhat played down — the report refers only to the eurogroup summit statement saying that it should target €50bn.

    All these details are preceded in the MoU by an insistence, in bold letters, that “success requires ownership of the reform agenda programme by the Greek authorities”. In an acknowledgment of Greece’s profound social challenges, there is also a preamble note that “the recovery strategy takes into account the need for social justice and fairness”.

    This is more than lip service. Anxious to secure something for his leftwing Syriza party, Mr Tsipras has managed to include in the MoU a planned guaranteed minimum income. Preparations are to start next month, with a view to implementation in April 2016.

    However, this can be seen as a hard-nosed programme in which the principal authors sit not in Mr Tsipras’s cabinet but the offices of the IMF, the EU and the creditors, led by Germany.

    Additional reporting by Kerin Hope in Athens

    Source: Memo reveals extent of control bailout monitors will have on Greece –

    Link to PDF full text of MOU:

    I don’t know if the link to the PDF will work or whether it will be impacted by the FT’s firewall. I’ve emailed a copy of it to Ian just in case.


  23. markfromireland

    More from the Financial Times:

    Merkel fights to contain Greece rebellion

    Chancellor Angela Merkel is fighting to contain the largest revolt from her party this week when the German parliament votes on a new, €86bn rescue plan for Greece.

    Ms Merkel has rescheduled trips to Italy and Brazil to maximise her time in Berlin and party managers have been mobilised to dissuade potential rebels from voting against the bailout in the Bundestag on Wednesday. She took to national television on Sunday evening to rally support for the bailout deal, saying Greek prime minister Alexis Tsipras had changed his approach after a “real confrontation” with creditors.

    Greece’s third international bailout, which was approved by eurozone finance ministers on Friday night, faces a stormy ride through some of the bloc’s parliaments this week as doubts over its viability continue to surface.

    The deal is certain to get German legislative approval thanks to support from the Social Democrats, but a big rebellion by Christian Democrats and their Bavarian sister party, the CSU, would represent the biggest challenge to Ms Merkel since she took power a decade ago and could dent her reputation for political invulnerability.

    It could also raise concerns that if the three-year Greece rescue runs into difficulties over implementation in Athens or debt relief, opposition to handing over loan instalments could grow in Berlin and among an increasingly sceptical German population.

    Parliamentary approval in Germany and a few other eurozone states, including the Netherlands and Estonia, is the final political hurdle for the rescue deal, following months of difficult negotiations in which Greece came close to default, financial meltdown and exit from the single currency.

    Crucially for conservative MPs, finance minister Wolfgang Schäuble on Friday backed the deal, despite considerable misgivings about the radical left Greek government’s willingness to deliver the promised reforms.

    He told Bild-am-Sonntag newspaper on Sunday that Greece would have to implement reforms to the letter of the agreement. “We shall pay attention. Any further aid will be dependent on it,” he said.

    Mr Schäuble was unable to secure a guarantee that the International Monetary Fund will join the new rescue plan in the autumn, which could add to sceptical lawmakers’ concerns.

    The fund may not decide until October whether to take part and has indicated it will only do so if the eurozone grants debt relief to Athens. Adding to Berlin’s discomfit, Christine Lagarde, IMF chief, on Friday said the eurozone needed to make “concrete commitments . . . to provide significant debt relief, well beyond what has been considered so far”.

    But Ms Merkel told ZDF television on Sunday she had “no doubts” that the IMF come on board. She ruled out a haircut on Greek debt, but said there was “room for manoeuvre” for debt relief through loan extensions and lower interest.

    When the Bundestag debated whether to even start negotiations with Greece on a new bailout last month, 60 CDU/CSU MPs voted against and another five abstained.

    MPs are speculating how many others may join the rebels on Wednesday. The sceptics have been antagonised by what they see as clumsy attempts by party whips to bully them with threats of dismissals from parliamentary posts. One CDU sceptic said: “If it went to 100, that would be a disaster for Merkel. But I don’t think it will.”

    Party whips are talking up Friday’s deal, arguing that Mr Schäuble’s tough line over the past month has helped secure a better deal. Michael Grosse-Brömer, deputy chief whip, told the Frankfurter Allgemeine newspaper: “We intervened and this has had an effect.”

    CDU/CSU sceptics, meanwhile, kept up their campaign. Wolfgang Bosbacher, who has opposed every Greek rescue, said: “I am afraid that we are once again buying ourselves a little time with a very, very large amount of money.”

    With other parliaments also expected to back the deal, the plan is expected be signed off late on Wednesday by the eurozone’s rescue fund in time for Athens to receive its first €13bn tranche on Thursday and make a crucial €3.2bn debt repayment to the European Central Bank.

    Greece will also immediately receive €10bn for bank recapitalisation, plus another €3bn in the autumn, subject to the implementation of reforms. There is a further €15bn for bank recapitalisation later this year.


  24. markfromireland

    Three articles from the UK Telegraph. Yes I know it’s the torygraph that doesn’t preclude there being good journalism to be found there:

    The Greek government has rowed back on a promise to halt the fire sales of the country’s strategic assets by approving the sale of its airports to a German company.
    Operating rights to 14 regional airports, including those on popular holiday destinations such as Crete, will now fall under the control of Fraport AG, the operator of Frankfurt airport.

    The €1.23bn deal represents a significant climbdown for Alexis Tsipras who had denounced attempts by the Troika to force various Greek governments to de-nationalise the country’s ports, electricity networks and airports.

    But the embattled prime minister has been forced into a number of concessions in return for an €86bn aid package to keep the country in the euro for the next three years. The deal comes as Germany’s Bundestag prepares to vote on the package on Wednesday.

    Read in full: Greece sells airports to Germans as Bundestag prepares for day of reckoning – Telegraph

    A host of national parliaments are set to vote on Greece’s new rescue deal before August 20. Here’s our guide to who is doing what, and when

    Read in full: Could Estonia threaten Greece’s future in the euro? – Telegraph

    Is there no limit to the economic pain Europeans are prepared to endure in defence of the wretched euro? Apparently not; despite the brinkmanship and bravado, even Greece’s notionally radical left prime minister, Alexis Tsipras, eventually opted for continued membership of the single currency, and the austerity that goes with it, over economic self-determination and a plausible path back to growth and full employment.
    Barring last-minute political upsets, a third Greek bail-out will shortly be implemented. Few, even among those who have agreed the latest rescue, believe it provides the basis for lasting solutions, even if later concessions include permanent debt relief.

    As the political philosopher John Gray recently concluded in a compelling analysis of the single currency’s fate, “unworkable and unreformable, the euro can only produce recurrent and worsening crises”.

    Yet the euro as it now stands will eventually die not of the financial traumas that first threatened its existence, but of political contagion, with the single currency paradoxically spawning exactly the same kind of resurgent nationalism, popular anger and political instability it was designed to eradicate.

    For the moment, however, Europe’s disastrous experiment with monetary union is proving surprisingly resilient. With each recurrent crisis, just enough is done to hold it together. Delusional faith in the euro being in some way Europe’s unavoidable and manifest destiny is not confined to the policymakers with a vested interest in trying to keep it alive. It is shared by a clear majority of Europeans.

    Read in full: Unworkable and unreformable, the euro surely cannot survive another serious downturn – Telegraph

  25. markfromireland

    I recently re-read Z Vassilis Vassilikos’ stunning book based on the assasination of on the 1963 assassination of Gregoris Lambrakis having re-read that I re-watched Z Costa-Gavras’ 1969 film based upon it. If you’re not familiar with this astounding piece of work which documents the prelude to the coup by the colonels then you’ve missed out.

    Amazon link to the book here: Z: Vassilis Vassilikos: 9780345017567: Books

    The film is part of the Criterion Collection link here: Z (1969) – The Criterion Collection

    A pulse-pounding political thriller, Greek expatriate director Costa-Gavras’s Z was one of the cinematic sensations of the late sixties, and remains among the most vital dispatches from that hallowed era of filmmaking. This Academy Award winner—loosely based on the 1963 assassination of Greek left-wing activist Gregoris Lambrakis—stars Yves Montand as a prominent politician and doctor whose public murder amid a violent demonstration is covered up by military and government officials; Jean-Louis Trintignant is the tenacious magistrate who’s determined not to let them get away with it. Featuring kinetic, rhythmic editing, Raoul Coutard’s expressive vérité photography, and Mikis Theodorakis’s unforgettable, propulsive score, Z is a technically audacious and emotionally gripping masterpiece.

    It is subtitled. I’m pretty sure it’s also available online other places.


  26. markfromireland

    Tsipras resigns and calls snap elections for September 20

    Greece is to hold a snap general election after prime minister Alexis Tsipras resigned and asked the Greek people to pass judgment on the latest bailout deal.

    In a televised addressed, the leader of the leftwing Syriza party said he would tender his coalition government’s resignation to Greece’s president, triggering the sixth general election in eight years. FirstFT is our new essential daily email briefing of the best stories from across the web

    “I’m putting everything I’ve done [in the past seven months] to the judgment of the Greek people,” Mr Tsipras said.

    His move makes way for the appointment of an interim administration to oversee an election likely to be held on September 20, officials said.

    Fresh elections — called on the very first day of Greece’s new €86bn international bailout programme — will plunge Greece back into short-term political uncertainty. But they could allow Mr Tsipras to capitalise on his enduring popularity in the hope of yielding a more stable government that is not held back by far-left critics of the rescue terms.

    Officials raised the possibility of holding a snap poll last week after lawmakers from Syriza’s extreme left faction voted against a new three-year rescue package, wiping out the government’s majority.

    The package was approved thanks to support from three pro-European opposition parties but the Left Platform’s rebellion left the Syriza-led coalition hostage to the centre-right New Democracy party in any future vote.

    In his address, Mr Tsipras acknowledged that he did not obtain the bailout terms that he had wanted but said the deal was the best that could be secured in the circumstances. He had resisted pressure to cut pensions and privatise Greece’s electricity utility, he added.

    Mr Tsipras’ decision to go to the polls came hours after the finance ministry announced that the European Stability Mechanism, the EU’s rescue fund, had approved disbursement of €13bn from Greece’s €86bn new bailout package — enough to cover Greece’s funding needs for the next two months.

    The European Central Bank confirmed that Athens had repaid €3.2bn in bonds that came due on Thursday.

    Greece was obliged to swallow a series of exacting economic reforms and austerity measures as part of the bailout programme, approved in two waves of legislation by the Greek parliament.

    The election campaign is expected to delay the implementation of fiscal and structural reforms agreed with creditors since the interim government will lack a mandate to take political decisions.

    Slow progress on reform could in turn complicate talks due later this autumn on debt relief for Athens and a decision by the International Monetary Fund on whether to contribute financially to Greece’s third bailout.

    In spite of his capitulation to creditors’ tough demands in return for a further rescue, Mr Tsipras remains popular in Greece because he is regarded as having fought hard to secure the best possible terms. The latest Metron Analysis survey — which dates from late last month — gave him a 61 per cent approval rating. Syriza is comfortably Greece’s most popular party on 34 per cent, but it is unlikely to be able to form a majority administration on its own.

    “While the election is disruptive in the short term, the likelihood is that it will result in a coalition that is less dysfunctional than the one we have now, and better able to provide stability in implementing the reform programme,” said Nicolas Véron, senior fellow at Brussels-based think-tank Bruegel. “The current coalition has essentially collapsed anyway.”


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