ATHENS, Greece (AP) — Greece's prime minister is considering options, including early elections, to tackle a rebellion by hardliners within his party who are opposed to the terms of the country's new bailout.
Prime Minister Alexis Tsipras, who met with his ministers for most of the day and was due to speak later with the heads of opposition parties, was expected to make an announcement Thursday night, with polls expected to be held Sept. 20.
The government has long been rumored to be considering such action, but had said its priority was getting the first bailout installment and making a debt repayment to the European Central Bank, both of which it did Thursday.
"The certainty is that the need for elections has arisen," Energy and Environment Minister Panos Skourletis said on state television.
He said there are two reasons for snap polls, which would come just nine months after the government came to power. The first is that dozens of Tsipras' governing left-wing Syriza party lawmakers voted against the government on the bailout deal. The government "has lost its majority (in parliament) - one can't avoid this," Skourletis said.
The other reason was that Syriza is part of a government that needs to implement a program that is different to that which it was elected for.
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 86 billion euro, three-year bailout program. Tsipras and his radical left Syriza 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 lawmakers 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 down 3.5 percent in early afternoon trading.
"The Greek stock market is coming into a new circle of uncertainty while we are waiting for new elections to be announced," said analyst Evangelos Sioutis, head of equities at Guardian Trust Securities. "For the stock markets it is a factor of uncertainty."
Greek banking is still restricted under capital controls imposed in late June to stem a bank run sparked after Tsipras called a referendum on creditor proposals for reforms following a breakdown in bailout negotiations. There are weekly limits on cash withdrawals and Greeks can only transfer up to 500 euros abroad per month. Companies have faced problems paying suppliers abroad, with all international payments requiring a laborious process of approval by a special finance ministry committee.
"Greece has capital controls, the economy is choking, and we will now have uncertainty from elections, so you understand that it has been a difficult month," Sioutis said.
Greece received the first 13 billion euros ($14.5 billion) 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.
European bailout fund supervisors approved the release of the first batch of loans on Wednesday evening, with 12 billion euros earmarked for repaying debts and the remainder for settling arrears to public sector suppliers.