Germany says expects Athens to implement bailout reforms

The formation of the Laiki Enotita, or Popular Unity party, was announced by 25 Syriza members, hours after Tsipras stepped down as prime minister in a calculated action to consolidate power in a new election.


Germany said Friday it expects Athens to implement reforms agreed under a massive bailout, as Greek Prime Minister Alexis Tsipras’s resignation has not changed anything agreed under the European rescue plan.

Mr Meimarakis, who heads the New Democracy party, was formally handed a three-day mandate by the country’s president to try to form a new government earlier on Friday after Mr Tsipras stepped down. “We do not want to govern against the popular will”, he said, adding that Tspiras and his government were “confident in rightness of our policies and the maturity of the Greek electorate”.

“We did not achieve the agreement we expected before the January elections“, he said.

The bailout program required austerity measures from the government, something that Syriza pledged to fight against during the previous election.

Tsipras had delayed a decision on whether to call a new election until after Greece received its first installment from the new bailout and made a debt repayment to the European Central Bank; it did both Thursday.

The move will leave Greece in the hands of a caretaker government until the vote, which would be the second in just eight months and the fourth since 2012.

“The market started discounting the snap elections scenario on Thursday, we are seeing relatively lower pressure today on thin volume”, said analyst Vasilis Andreou at Athens-based Berta Securities. Elections will be held within a month, with government officials saying September 20 would be the likeliest date.

Alexis Tsipras has confirmed he is resigning as Greek Prime Minister – paving the way for a general election to take place within the next 30 days.

Germany’s Finance Ministry spokesman Jürg Weißgerber warned that any delay in implementation of reforms would also lead to delay in next payments to Greece. Debt write-off will only be up for discussion with creditors after the pending deal is approved and Greece implements requested reforms.

Even with financial aid, the political uncertainty is another problem that negatively affects Greece economy, and could result in a bailout failure, experts say.


However, it is clear that without a new government for several more weeks, the country will fall behind in the reforms it has to make for the bailout.

Greece to hold election in September