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 Greece's president gave the conservative opposition a chance to
form a new government following Tsipras's resignation on Thursday,
but the country appears almost certain to be heading for its third
election in as many years next month.
Tsipras is hoping to strengthen his hold on power in a snap election
after seven months in office in which he fought Greece's creditors
for a better bailout deal but had to cave in and accept more onerous
terms.
One day after money began flowing from Greece's third bailout
program, a much-needed period of political and economic certainty
remained as elusive as ever, drawing concerned calls from the euro
zone that Athens must stick to commitments given under the rescue
deal.
Far left Syriza members, who oppose the promises of yet more
austerity and economic reform that Tsipras made to secure 86 billion
euros ($97 billion) in bailout loans, broke away to form a new
party.
A deputy speaker of parliament announced the new party would be
called Popular Unity and headed by former Energy Minister Panagiotis
Lafazanis, who was fired by Tsipras earlier this year for refusing
to back the government.
 One of the new party's members, lawmaker and economist Costas
Lapavitsas, noted Greeks had voted overwhelmingly in June against a
bailout deal offered by the euro zone and IMF. But soon after the
referendum, Tsipras performed a U-turn to save the financial system
and Greece's future in the euro zone.
"We want to give a voice to the 62 percent of the people who said
'No' and do not want bailouts," Lapavitsas told ERT TV. "We see
strong support from the people who feel betrayed."
With 25 lawmakers, the party will be the third largest bloc in
Greece's 300-seat parliament, albeit far behind Syriza which had 149
before the split.
The walk-out may allow Tsipras to move Syriza a little closer to the
political center and broaden his appeal among voters, which remains
strong despite Greece's near-brush with financial collapse under his
premiership.
UNHAPPY VOTERS
However, some voters were unhappy with the move to force elections.
"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 Television.
Tsipras had long been expected to seek early an 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 program in
parliament last week, robbing him of his majority.
Other voters were willing to give Tsipras the benefit of the doubt.
"He had to do something to ensure that the government is viable,"
said programer Christianos Misailidis, but added: "Right now, it is
as if there is no government."
Financial markets took the uncertainty badly following a big drop on
Thursday. Greek shares <.ATG> fell 0.7 percent while 10-year bond
yields <GR10YT=TWEB> rose sharply.
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Outgoing Deputy Finance Minister Tryfon Alexiadis said only an
election could stabilize Greece. "Elections surely have an indirect
cost ... but will clear things up so we can move ahead," he told the
state TV channel ERT.
GREEKS MUST DECIDE
In accordance with the constitution, President Prokopis Pavlopoulos
formally invited conservative leader Vangelis Meimarakis on Friday
morning to try to form a new government without the need for a new
elections.
However, his New Democracy Party has just 76 members of parliament
and is almost certain to fail to find enough partners among an
opposition that ranges from the KKE communists to the ultra-right
Golden Dawn party.
If Meimarakis has no coalition agreement within three days, the
constitution says the next biggest party should be given a chance.
This would be the new leftist party, which said it would also seek a
mandate to try to form a government. However, an election remains a
near certainty.
Tsipras was forced to accept the creditors' demands including
further pension cuts, more value-added tax increases and a
"solidarity" tax on incomes - the very kind of policies he had
promised to scrap when he was elected in January.
Under his leadership, he had to close the banks for three weeks as
panicking savers pulled billions from their accounts, and strict
curbs on withdrawals from the banking system remain, badly hurting
business.
Despite all, Tsipras remains popular although no opinion polls have
been taken for almost a month, and he appears to have no serious
rivals to prevent his return to power.
Across the euro zone, politicians warned Greece to stick to its
promises.
"The Greeks have no alternative. They know the new package will stop
immediately if commitments are not met. Even if a new government was
elected it couldn’t change anything," Michael Fuchs, a leading
German conservative told Italy's Corriere della Sera newspaper.
"It’s up to them to decide."
(additional reporting by Michele Kambas, Karolina Tagaris, Deepa
Babington, Sarah White and Stephen Jewkes; writing by David Stamp;
editing by John Stonestreet and Giles Elgood)
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