Tsipras Survives for Now as Party Rebels Blast Greece Rescue

Greek Prime Minister Alexis Tsipras staved off an immediate challenge to his premiership, though failure to appease his party’s hard-left fringe brought early elections into view.

After 12 hours of talks, the central committee of the anti-austerity Syriza party decided in the early hours of Friday to hold an emergency congress in September, in which Tsipras’ move to accept a strings-attached rescue program from international creditors will be put to the vote. Leaders of the party’s Left Platform protested that will be too late to stop the bailout, but failed in their bid to force a party congress this weekend.

With the government vulnerable, Finance Minister Euclid Tsakalotos meets representatives from international creditors on Friday to discuss the austerity measures his party has long opposed. The quarrel within Syriza, in power since January, means that Tsipras will have to rely on opposition parties’ support to approve measures attached to Greece’s emergency loans, a situation he has said isn’t sustainable.

“Tsipras might call an early election as a way to reinforce his mandate,” Roubini Global Economics analysts Brunello Rosa and Michelle Tejada wrote in a note to clients. “It cannot yet be known if a new government — or Tsipras’s second mandate — would lead to stronger compliance with the creditors’ terms or would merely be a sign of Tsipras’s intention to push for better terms, including debt reduction.”

Left Revolt

Former Energy Minister Panagiotis Lafazanis, who leads the Left Platform, opposed the September confidence vote, arguing the government will have signed a new bailout with creditors by then, and it will be all but impossible to annul bilateral agreements ratified by parliament.

Lafazanis led a revolt of more than 30 Syriza lawmakers this month against the upfront actions demanded by European states and the International Monetary Fund, effectively stripping Tsipras of his parliamentary majority.

The central committee’s decision to hold a congress in September, approving a motion by Tsipras, “is a parody,” the Platform said in a statement posted on its website Iskra, which takes its name from newspaper managed by Russia’s revolutionary leader Vladimir Ilyich Lenin.

In a separate statement posted on the website of government-affiliated Avgi newspaper, 17 members of the central committee said they are resigning from the body, protesting the “transformation” of Syriza the into a pro-austerity party.

“The troika returns, the country signs off a new bailout attached to barbaric measures and collateralization of its wealth, German plans for Grexit haven’t been called off, and the bankruptcy has already happened,” the statement said. The group of 17 includes three Syriza parliamentarians associated with the Communist faction of the party.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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