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Greek PM threatens snap vote over party rebels' opposition to bailout

Greek Prime Minister Alexis Tsipras on Wednesday warned he would resort to early elections if hardliners in his party continued to resist an unpopular new bailout deal that promised debt relief.

[ATHENS] Greek Prime Minister Alexis Tsipras on Wednesday warned he would resort to early elections if hardliners in his party continued to resist an unpopular new bailout deal that promised debt relief.

The left-wing leader's remarks came as the European Central Bank decided to leave its emergency credit lifeline for Greece unchanged, after keeping afloat struggling Greek banks and by extension the economy for months.

The ECB executive board acted in the week when experts from the bank, the EU and International Monetary Fund returned to Athens to discuss a new bailout of up to 86 billion euros (S$129.3 billion) over three years.

"If we do not have a parliament majority I will be forced, we will be forced to hold elections," Mr Tsipras said in a two-hour interview with Sto Kokkino radio.

He added that under the terms of the EU-IMF agreement signed on July 12, Greece after November could expect a reduction of its huge public debt in addition to the rescue funds, following a first assessment of reforms.

Meanwhile in Athens, talks were held between representatives of Greece's international creditors.

"The negotiations are taking place in good conditions of cooperation," EU Economic Affairs Commissioner Pierre Moscovici said in an interview.

A Greek foreign ministry official agreed, saying the talks were taking place in "a very good atmosphere".


But Mr Tsipras faces strong resistance from a sizeable faction of his Syriza party that rejects the new bailout as contrary to the government's anti-austerity promises.

"I would be the last person to want elections if I had a guaranteed parliamentary majority on a plan to complete (my) four-year term... That includes completing the (rescue) programme," the 41-year-old premier said in response to the criticism.

He called for an emergency party congress that would likely be held in early September to determine whether early elections were necessary.

A party committee meeting on Thursday will likely decide when the congress will be held.

Earlier this month, Mr Tsipras saw more than 30 of his 149 lawmakers mutiny in two separate votes in parliament to approve tax hikes, a pension overhaul and administrative reforms tied to the bailout, effectively rendering his coalition a minority government.

While Mr Tsipras remains popular on the street, he says he is aware his approval ratings have suffered as a result of the ongoing crisis.

According to Greek press reports, the Mediterranean country's creditors believe its gross national product will suffer a two to three percent loss this year.

The downturn is partly rooted in capital controls imposed by Greece on June 29, and partly in delays in the negotiations between Athens and its creditors.


On Wednesday, the International Monetary Fund's chief Christine Lagarde reiterated her view that any new plan for Greece requires significant restructuring of the country's debts by the European Commission and the ECB, a view that now has been generally accepted by the creditors.

She also said she is focused more on Greece's actions than words.

"What matters is at the end of the day what you do. So deeds, no creeds," Lagarde said in an online press conference.

"What will be critical in my view is what the Greek authorities are actually prepared to do, not... the political noise that is often a necessity."

Meanwhile the Frankfurt-based ECB confirmed its lifeline to Greece would remain unchanged, a week after the bank extended its emergency assistance for Greece's struggling banks by 900 million euros to 90.4 billion euros, Bloomberg News reported.

Greek banks were closed for three weeks under capital controls imposed by Mr Tsipras' government to prevent the collapse of the credit institutions.

The restrictions were eased on July 20, but withdrawals and money transfers abroad remain limited. Greeks can now withdraw 420 euros per week from their bank accounts.

The Athens stock exchange, which has been closed for nearly a month due to Greece's debt crisis, is expected to reopen in a few days after receiving approval from the ECB.


Read more on the Greek crisis here