Greece’s Prime Minister Alexis Tsipras has announced he is resigning and has called an early election.
Mr Tsipras, who was only elected in January, said he had a moral duty to go to the polls now a third bailout had been secured with European creditors.
The election date is yet to be set but earlier reports suggested 20 September.
Mr Tsipras will lead his leftist SYRIZA party into the polls, but he has faced a rebellion by some members angry at the bailout’s austerity measures.
He had to agree to painful state sector cuts, including far-reaching pension reforms, in exchange for the bailout – and keeping Greece in the eurozone.
Greece received the first €14.5bn tranche of the bailout on Thursday after it was approved by relevant European parliaments.
It allowed Greece to repay a €3.2bn debt to the European Central Bank and avoid a messy default.
The overall bailout package is worth about €86bn over three years.
Alexis Tsipras made the announcement in a televised state address on Thursday.
“The political mandate of the 25 January elections has exhausted its limits and now the Greek people have to have their say,” he said.
“I want to be honest with you. We did not achieve the agreement we expected before the January elections.”
In January, Alexis Tsipras went to the polls in Greece as a man who would stand against austerity. What a difference seven months makes. Now he is calling elections to ask the Greek public to support the way he is trying to lead this country out of its financial crisis.
That means spending cuts, tax rises and, of course, that third bailout that’s already been agreed. All of that is opposed by a sizeable number of hard-left MPs within his own party, Syriza.
Mr Tsipras will argue this election is about bringing certainty to Greece’s future. In the short-term at least, though, it will create political uncertainty. And that’s becoming a pretty familiar feeling here in Athens.
Mr Tsipras said Greeks would have to decide whether he had represented them courageously with the creditors.
He met President Prokopis Pavlopoulos later in the evening to submit his resignation, Reuters reported, telling him: “The present parliament cannot offer a government of majority or a national unity government.”
Greece will be run by a caretaker government ahead of the polls.
But the monthlong election period means little progress will be possible in carrying out Greece’s rescue program, since the caretaker government that will now replace Mr. Tsipras’s administration has no mandate other than to see Greece through to the vote. Under Greek law, the interim government will be led by the head of the country’s supreme court, Vassiliki Thanou-Christophilou, who is set to become the first woman to serve as Greek prime minister.
If a government resigns within a year of election, the constitution requires the president to ask the second-largest party – in this case the conservative New Democracy – to try to form an administration.
If this fails, the next largest party must be given a chance.
Analysts say both parties can waive this and allow the president to approve the snap election.
However, New Democracy leader Vangelis Meimarakis said it was his “political obligation and responsibility to exhaust all the options”, even though the numbers suggest he has little chance.
Reacting to the news, Martin Selmayr, European Commission President Jean-Claude Juncker’s chief-of-staff, tweeted that “swift elections in Greece can be a way to broaden support” for the bailout deal.