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RISK: Greek prime minister resigns, calls early election

Alexis Tsipras said Greece got the best deal possible for its bailout from other eurozone countries

Greek Prime Minister Alexis Tsipras announced his government’s resignation and called early elections Thursday, an attempt to get a new mandate to implement a three-year bailout program that sparked a rebellion within his radical left party.

In a televised address to the nation Thursday night, Tsipras defended his government’s negotiating tactics and said Greece got the best deal possible for its 86 billion euro bailout from other eurozone countries.

But the bailout is conditional on Greece imposing stringent spending cuts and tax hikes––the very measures Tsipras won elections in January vowing to repeal. His U-turn in accepting the demands by the country’s creditors led to outrage among hardliners in his Syriza party, with dozens voting against him during the bailout’s ratification in parliament last week. The bailout was approved solely thanks to support from opposition parties.

Read: The Greek tragedy is self-made

Without the bailout, Greece faced defaulting on its debts and crashing out of Europe’s joint currency. Tsipras has insisted that although he disagrees with the bailout conditions, he had no choice but to accept and implement them.

Now that the country has secured its funding, Tsipras said he felt obliged to let the Greek people evaluate his work.

“Now that this difficult cycle has ended … I feel the deep moral and political obligation to set before your judgment everything I have done, both right and wrong, the achievements and the omissions,” he said. “The popular mandate I received on January 25 has exhausted its limits.”

Tsipras headed to the country’s president, Prokopis Pavlopoulos, and formally submitted his resignation to begin the election process.

Read: Economist: “Greece is only going to dig itself into a deeper hole”

He did not mention a date for the election, although it will have to be held within the next month, with government officials saying Sept. 20 would be the likeliest date.

Annika Breidthardt, spokeswoman for the European Union’s executive Commission said in a tweet: “EU commission takes note of announcement in Greece. Broad support for (bailout deal) and sticking to commitments will be key for success”

Tsipras had delayed a decision on whether to call new elections until after Greece received the first installment from the bailout and made a debt repayment to the European Central Bank, both of which it did Thursday.

Read: Greek PM seeks party approval of harsh new austerity package

Despite his policy U-turn, Tsipras continues to enjoy popular support and was far ahead of his opposition rivals in opinion polls, although none have been published since the bailout agreement was finalized.

Tsipras will also be calculating that he might get a better election result if polls are held before voters feel the impact of the steep tax hikes and spending cuts demanded by the bailout program.