ATHENS, Greece (AP) - Greece's prime minister, Alexis Tsipras, has resigned and called new elections - just as the country was starting to tap its new bailout package.
ATHENS, Greece (AP) — Greece's prime minister, Alexis Tsipras, has resigned and called new elections — just as the country was starting to tap its new bailout package.
While the move creates some uncertainties for the country's fragile economy, it is unlikely to derail its new bailout program, the only thing keeping Greece solvent and within the euro.
Here is a look at what comes next for Greece and what the elections mean for the bailout, the 86 billion euro ($95 billion) package of loans that is keeping the country solvent and part of Europe's joint currency, the euro.
Q: WHY DID TSIPRAS CALL THE VOTE?
A: Tsipras angered many of the hard left members of his radical left Syriza party by capitulating to creditors' demands for new budget savings and reforms in return for the bailout. Tsipras led his party to power in January vowing to undo and fight such measures.
Tsipras said he had no choice in order to keep Greece within the eurozone, which is what most Greeks want.
When the Greek parliament voted on the bailout deal, a quarter of Tsipras' lawmakers voted against him or abstained, leaving his coalition government relying on opposition party support to pass legislation.
Without a parliamentary majority, Tsipras was essentially hamstrung.
Tsipras is betting he will win the new vote and form a government that, shorn of the rebels, can implement the reforms demanded by the bailout over the next three years.
He also likely calculated that protracted uncertainty over his government would further harm the country's battered economy, and that he would stand better chances at an election before the new austerity measures are felt by the population.
Q: DOES IT PUT THE BAILOUT AT RISK?
A: Not really, though it could cause some delays.
Tsipras is highly popular and is expected to win the election, which will likely be held next month. If he does not get a majority, he would likely have to form a coalition with another party. Because most current opposition parties also support the bailout, Tsipras should have little trouble forming a coalition willing to implement the deal's terms.
However, it is clear that without a new government for several more weeks, the country will fall behind in the reforms it has to make for the bailout.
That could delay the creditors' first review of Greece's reforms progress, which in turn would hold up the payout of the next batch of rescue loans to Greece. The first review was expected in October.
It could also delay talks on how to ease the burden of Greece's debts. Creditors had said that would happen only after the first review.
Q: WHAT HAPPENS NOW?
A: Following Tsipras' resignation Thursday, the other two biggest parties in parliament are given a chance to form a government. On Friday, the head of the conservative New Democracy party, Evangelos Meimarakis, was given three days to seek coalition partners. If he fails, the new party formed by Syriza rebels will get a chance.
Neither party is expected to be able to form a government. After that, the country's president will convene the party leaders in a final attempt to seek a working coalition.
If that fails, parliament is dissolved and a caretaker government is appointed to lead the country to elections.