Greece debt crisis: Syriza rebels form new party ahead of early elections

Greek outgoing Prime Minister Alexis Tsipras leaves his party's headquarters in Athens, Greece, August 21, 2015. (Reuters)

Rebels angered by Greece’s international bailout walked out of the leftist Syriza party on Friday, formalising a widely-expected split after leader Alexis Tsipras resigned as prime minister to pave the way for early elections.

The new anti-bailout Popular Unity party set up by the far-leftists is expected to take some anti-euro voters from Tsipras. But it allows Syriza to move closer to the political centre and clears the way for Mr Tsipras to more decisively implement the bailout programme if he is re-elected.

The split – which cost Mr Tsipras 25 lawmakers, or a sixth of Syriza’s parliamentary group – came a day after he abruptly resigned in order to force early elections in a bid to cement his grip on power and deal with the growing rebellion in the party’s ranks.

Greece’s president gave the conservative opposition a chance to form a new government, but the effort is unlikely to prove successful and Greeks are expected to go to the polls for the second time this year on 20 September.

The vote opens a new chapter of political and economic uncertainty for Greece just a day after money began flowing from the country’s third bailout, prompting calls from the eurozone that Athens must stick to commitments it gave under the rescue deal.

The election could hamper or delay a review planned for October of Greece’s progress under its new bailout programme and rekindle concerns about Athens’ ability to honour its pledges, Fitch ratings agency warned.

Many Greeks, weary after months of turmoil that included a three-week shutdown of banks and the imposition of capital controls, responded warily.

“It is, of course, wrong. And we citizens will suffer the consequences, because we will go through a period of insecurity,” Athens shop owner Konstantinos Poulopoulos told Reuters TV.

Former Energy Minister Panagiotis Lafazanis, a former close adviser to Mr Tsipras who was fired last month for refusing to back the government, said his new leftist party would give Greeks who oppose the €86bn (£62bn) bailout package from eurozone and International Monetary Fund lenders a voice.

“The country cannot take more bailouts,” Mr Lafazanis told a news conference. “We will either finish off the bailouts, or the bailouts will finish off Greece.”

He and other far-left members of Syriza have been defying Mr Tsipras in parliament since he performed a U-turn and accepted the bailout package and its austerity measures to save the financial system and Greece’s future in the euro.

With 25 lawmakers, the new leftist party will be the third largest bloc in Greece’s 300-seat parliament. That allows it to have a go at forming a government if the conservative opposition fails to cobble together a coalition.

Mr Tsipras had long been expected to seek an early election in the autumn. But he was forced to move quickly after nearly a third of Syriza’s lawmakers refused to back the new bailout programme in parliament last week, robbing him of his majority.

Reuters