By Eleni Chrepa and Sotiris Nikas, Bloomberg
Greece’s government unraveled, prompting Prime Minister Alexis Tsipras to call a confidence vote that could trigger an early election and end the leftist leader’s four years in power.
In the euro area’s latest sign of political instability, Defense Minister Panos Kammenos withdrew his party from the governing coalition on Sunday over a name dispute with neighboring Macedonia. Lawmakers in Athens tentatively planned to hold the confidence vote on Wednesday, months before regular elections are due in September.
“An early election is good news for investors,” said Wolfango Piccoli, co-president of London-based consultants Teneo Intelligence. “The country has been in a election campaign mode for weeks, and the sooner the elections take place the better.”
The survival of Tsipras, who led Greece through high-drama moments of Greece’s bailouts and forged an unlikely bond with German Chancellor Angela Merkel, may depend on whether Kammenos’s Independent Greeks lawmakers stay united against him. Tsipras, 44, may also seek support from other parties and independent lawmakers to avoid an early vote.
Geopolitical Shifts
While Greece emerged from a series of bailouts in 2018, Tsipras’s woes reflect broader uncertainty sweeping Europe at a time of geopolitical shifts — from a lame-duck Merkel in Berlin and violent protests in France against President Emmanuel Macron’s policies to a surge in populism that may play out in European Parliament elections in May.
Greek polls suggest opposition leader Kyriakos Mitsotakis’s New Democracy party would win the most votes if elections were held now, though it’s unclear whether he’d be able to form a government without needing allies in parliament.
“If anything, the exit of Kammenos helps clear some of the uncertainty of the last few days which were marred by his backpedaling,” said Mujtaba Rahman, managing director at Eurasia Group in London.
Tensions between the two partners climaxed last week over the agreement Greece sealed with the former Yugoslav republic of Macedonia to change its name to Republic of North Macedonia. The deal would pave the way for Greece to end its veto of Macedonia joining the European Union and NATO. Kammenos like many Greeks say Macedonia should only refer to their own country’s northern region, the ancient stronghold of Alexander the Great.
Tsipras met Kammenos in Athens on Sunday to accept his resignation. Now, “we will immediately proceed with the process to renew the parliamentary support” for the government, the prime minister said.
Even if he loses the confidence vote, the timing of any new election is unclear given that Tsipras has pledged that Greece won’t return to the polls until the government completes a series of measures to stabilize the economy, including constitutional reform, new legislation to protect homeowners and an increase in the minimum wage. Tsipras may look to hold the vote before the end of May as he risks heavy losses in European Parliamentary voting starting on May 23 that would put him on the back foot for a campaign later in the year.
