In the wake of the world’s largest ever renege on campaign promises in the shortest period of time, Greek prime minister Alexis Tsipras’ Syriza party splintered. Tsipras lost his ruling coalition and would likely have not survived a vote of confidence.

Instead, and as widely expected, Alexis Tsipras to ‘Step Down and Call Snap Elections’.

The Greek prime minister, Alexis Tsipras, has decided to step down and call snap elections for 20 September, government officials said.

Once he submits his resignation the prime minister would be replaced by the president of Greece’s supreme court, Vassiliki Thanou-Christophilou – a vocal bailout opponent – who would oversee the elections as the head of a transitional government.

Tsipras won parliamentary backing for the tough bailout programme last week by a comfortable margin despite a large-scale rebellion among members of his ruling leftwing Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained. Syriza governs in a coalition with the rightwing, anti-austerity party Independent Greeks (Anel).

The revolt by hardliners angry at what they view as a betrayal of the party’s pledge to fight austerity left Tsipras short of the 120 votes he would need – two-fifths of the 300-seat assembly – to survive a censure motion and he was widely expected to call a confidence vote this week or next.

Tsipras appears to have calculated that it was better to call the elections early, before the effects of the new bailout measures – including further pension cuts, VAT increases and a “solidarity” tax on incomes – started to make themselves felt.

Under Greece’s complex constitutional laws, President Prokopis Pavlopoulos cannot immediately call an election if Tsipras resigns, but must first consult the other major parties to see if they could form a government – a near impossibility given the current parliamentary arithmetic.

Recent opinion polls have put support for Syriza at around 33-34%, making it by far the country’s most popular party – but not popular enough to govern without a coalition partner. No polls have been published since then, but Syriza insiders remain optimistic.

Sweeteners Before the Screws 

Support for Syriza is unlikely to be 33-34% because of party splintering. 

Thus, one can fully expect sweeteners and outside interference from creditors praising Tsipras in the next month.

I suspect the ECB will agree to return profits it made on any Greek bonds and add in a few other meaningless (in the grand scheme of things) promises as well.

The goal of the creditors is to provide a few sweeteners (as few as necessary), to increase the odds Tsipras wins the next election and can form a government.

Such manipulation needs to be sooner rather than later, before the screws of the latest “bailout” take their toll on voters.

Campaign Promise You Can Believe In

Here’s a lollipop today, for your vote in September. After the election you will feel like we kicked you in the teeth.

Mike “Mish” Shedlock