Greek Prime Minister Lucas Papademos resigned on Wednesday, setting the stage for elections on May 6 after a five-month rescue mission to save the country from bankruptcy.
He formally handed his resignation to Greek President Karolos Papoulias after telling his coalition Cabinet a May 6 ballot was needed to secure a new mandate for reforms to return Greece to growth and secure its place in the eurozone.
“These challenges constitute a national issue of exceptional importance whose handling must be undertaken by a government with a renewed popular mandate,” Papademos told ministers according to his office.
“The choices we shall make [at the elections] will define the future of the country for the coming decades,” Papademos later said in a televised address.
Papademos urged voters to “choose the road that ensures [the country’s] place in the EU and in the eurozone.”
Under the Greek Constitution, the president will dissolve parliament and call for elections within 30 days.
A new parliament is expected to be convened on May 17.
Papademos, 64, a former European Central Bank vice president, was appointed caretaker prime minister in November last year, heading a coalition backed by the conservative New Democracy party and the socialist Pasok party, to complete a 130 billion euro (US$171 billion) debt-saving deal for Greece.
The bailout was ratified by parliament last month and Athens has given private investors until Friday next week to join the debt exchange.
However, the country, now in its fifth consecutive year of recession, must pursue structural reforms to restore growth and stay in the eurozone.
Papademos is expected to stay on to supervise the electoral process, along with most of his key ministers.
“Parliament is dissolved, but the government is not,” he told the Cabinet.
Among pressing issues is the recapitalization of Greek banks which took a hit in a bond swap last month that erased nearly a third of the country’s near and midterm debt, which still exceeds 350 billion euros (US$461 billion).
Legislation on the banks -recapitalization will be submitted for a vote by the incoming parliament in the middle of next month, a government official said.
Parliament on Tuesday approved a labor bill restructuring social security funds, the final piece of legislation that Papademos’ government had pledged to pass before the ballot at the behest of Greece’s creditors, the EU and IMF.
Most analysts have warned that the electoral campaign will be the most uncertain in decades, because of mounting anger after more than two years of painful austerity that has seen the creation of several splinter parties.
Private television station Mega on Monday released a poll giving New Democracy a four-point lead over Pasok, which is narrowing the gap under its new leader, former finance minister Evangelos Venizelos.
The survey by pollster GPO suggests that with just 18.2 percent of the vote, New Democracy would be unable to form a majority government.
New Democracy leader Antonis Samaras told Mega on Monday he would not join forces with Pasok to form a government if his party failed to garner enough votes, even if this meant new elections.
“If a government cannot be formed ... we will have to hold fresh elections, even if the country remains without a government [until then],” the conservative leader said.