Greek PM threatens Syriza rebels with election if bailout reforms derailed

After pushing through two rounds of austerity to meet the demands of creditors, Greek Prime Minister Alexis Tsipras is saying that's enough cutbacks.

Tsipras is struggling to contain a revolt in his left-wing Syriza party, and has threatened an early election if activists fail to support bailout terms.

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Ahead of a meeting Thursday with Syriza's central committee, he has suggested an emergency party congress in early September to look at the direction of the party and hammer out persistent disputes over the bailout terms.

After voters rejected euro zone bailout terms in a July 5 referendum, the Greek government agreed to terms with its euro zone lenders that were even more stringent, including higher sales taxes and reforms to banks and the judiciary.

Election threat to Syriza rebels

That has many Syriza party members threatening to overturn Tsipras in parliament.

Tsipras warned of the uncertainty that could be created by a fresh political campaign and said: "If I don't have the parliamentary majority I will be forced to go to elections."

But Tsipras said he will go no further than the terms agreed to with the EU and will not include further cuts to pensions and labour reforms.

"I know well the framework of the deal we signed at the euro zone summit on July 12," he told Sto Kokkino radio. "We will implement these commitments, irrespective of whether we agree with it or not. Nothing beyond that."

Some European officials are saying more reforms will have to be in place before Greece receives any of its third bailout, worth 85 billion euros ($121 billion Cdn) over three years.

Stock market could reopen

But Greece's creditors — its European Union partners and the International Monetary Fund — are currently meeting officials in Athens to discuss the terms of the new bailout and they claim talks are going well.

"We are satisfied with the smooth and constructive co-operation with the Greek authorities, and that should now allow us to progress as swiftly as possible," Mina Andreeva, a European Commission spokeswoman, said in Brussels

Greece closed its banks for three days earlier this month because of fears coffers would be drained ahead of the referendum. The European Central Bank continues to provide emergency funding for Greek banks but has capped the amount.

There were suggestions the stock market, closed for the past five weeks, might open later this week, but authorities are still waiting for a ministerial decree needed to resume trading.

Teneo Intelligence analyst Wolfgango Piccoli said Syriza looks set to split into at least two groups — the leftwing hardliners who have opposed the austerity package and a moderate group led by Tsipras.

"Despite his popularity, Tsipras is facing an uphill struggle to keep his party united and under his control," he said in a note. "As a result, the risk of unforeseen intra-Syriza developments that could delay, and at worst derail, the ongoing talks between Athens and its international creditors cannot be discarded."