Greek prime minister Alexis Tsipras will call early elections for next month, government officials said, as he tackles a rebellion by hardliners in his governing party who oppose the terms of the country’s new bailout.
The officials said the snap polls would be held on September 20.
Mr Tsipras is expected to make an announcement later and will also visit president Prokopis Pavlopoulos – a necessary formality in calling early elections, for which he would have to step down as prime minister.
The government has been rumoured to be considering either early elections or calling a confidence vote since Mr Tsipras faced a party rebellion over a bailout vote in parliament last week. But it had said its priority was getting the first installment from the bailout and making a debt repayment to the European Central Bank, both of which it has done.
“The certainty is that the need for elections has arisen,” energy and environment minister Panos Skourletis said.
He said there are two reasons for snap polls nine months after the government came to power. The first is that dozens of Mr Tsipras’s left-wing Syriza party policymakers voted against the government on the bailout deal. The government “has lost its majority (in parliament) – one can’t avoid this”, Mr Skourletis said.
The other reason is that Syriza is part of a government that needs to implement a programme that is different to the one it was elected for.
Mr Tsipras and his coalition government made a major U-turn in policy by accepting stringent budget austerity conditions that creditors had demanded in exchange for the €86bn, three-year bailout programme. Mr Tsipras and his party came to power in January promising to scrap such spending cuts and tax hikes.
He has since said that accepting the terms was the only way to ensure his country remains in the eurozone, which opinion polls have shown the vast majority of his population wants.
A parliamentary vote to approve the bailout conditions last week led to dozens of Syriza policymakers voting against him, accusing him of capitulating to unreasonable demands that will plunge the Greek economy further into recession.
The political uncertainty took its toll on the market, with the Athens Stock Exchange closing 3.5% down.
Greece received the first €13bn from its new bailout package on Thursday, allowing it to repay its ECB debt and avoid a messy default.
Greece could not have afforded the debt repayment, which was confirmed by the debt management agency, without the rescue funds from 18 other European nations that share the euro currency.
Missing the payment would have raised new questions about the country’s ability to remain in the euro.