SURPRISE: Greece's government will resign

Greek Prime Minister Alexis Tsipras just announced he will step down.

Speaking in a televised address Thursday, Tsipras announced that Greece’s government would tender its resignation to Greece’s president to call an election.

A number of outlets, including Reuters, earlier reported that Tsipras would step down less than a year after he and Greece’s left-wing Syriza party were voted into power in late January.

In a report Thursday, Reuters outlined what happens now that Tsipras has officially stepped down.

Basically, Greece’s president, Prokopis Pavlopoulos, will see if either of the minority parties in Greek parliament would like to form a new government, which is unlikely. Pavlopoulos will then mandate an election to be held within 30 days of the government’s resignation.

Earlier reports said elections will likely be held September 20.

In his address Thursday night, Tsipras said Greeks still have struggles ahead of them, but that Greece is determined to honour its latest bailout package.

That package, worth 86 billion euros — $US96.3 billion — is contingent on a new set of reforms from the Greek government, including tax increases and spending cuts. Earlier this week, Greece got the first 13 billion euros of its package for debt repayments and settlements of public-sector payments that were in arrears.

In the background of Greece’s latest bailout, however, is the International Monetary Fund, which so far has said it will wait until at least October to determine whether it will participate in this package.

As Reuters reported Thursday, German lawmakers have insisted that the IMF participate in this package, though the IMF made clear in a July report that it thought Greece needed debt reform, something Germany — the most influential of Greece’s European creditors — has strictly opposed.

Back in July, Greek voters voted against a new bailout package, but eventually the government gave in to demands from its European creditors, causing a divide in Syriza, which had been in control of Greek parliament.

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