Greece Bailout Crisis Intensifies as Prime Minister Alexis Tsipras Prepares Resignation

There was a major development in the Greece bailout crisis today (Thursday) as Prime Minister Alexis Tsipras plans to hand in his resignation this evening.

greeceAccording to reports, Tsipras intends to tell Greece's head of state, President Prokopis Pavlopoulos, late Thursday he can no longer continue as premier due to the lack of a stable governing majority in parliament.

Tsipras is expected to propose Sept. 20 as the date for new parliamentary elections. However, the decision on the date for the new parliamentary election rests in Pavlopoulos' hands. The government is expected to announce its intentions publicly Thursday evening.

Tspiras hopes that new elections will allow him to win a stronger mandate to implement the bailout deal.

That news came after cash-strapped Greece avoided defaulting on a debt payment earlier in the day. The Greek government made a crucial payment to the European Central Bank Thursday after receiving fresh aid from its Eurozone allies.

The European Stability Mechanism board on Wednesday said it "will provide up to 86 billion euros ($95 billion) in financial assistance to Greece over three years." Greece received the first 13 billion euros ($14.5 billion) on Thursday. That allowed it to repay its debt due to the ECB, thus avoiding a chaotic default.

The bulk of the new aid package will be used to pay down exiting debt rather than rebuilding Greece's ravaged economy. That has drawn widespread criticism that Eurozone creditors are simply repeating the same austerity policies that have led to six straight years of recession in Greece.

In order to qualify for the aid, Greece was forced to agree to a lengthy list of changes aimed at improving the way the country operates. Those changes include scraping a range of exemptions and amnesties applied in tax collections, key reforms to healthcare, and more.

Those stringent terms have left the ruling left-wing Syriza party split. The political turmoil led to Tsipras's resignation, which will clear the way for early elections.

Opinion polls suggest the widely popular Mr. Tsipras is well poised to win another term as prime minister. Still, he might need coalition partners.

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