The Worst May Be Over for Greece, But It's Just Beginning for the Greek P.M.

Alexis Tsipras went all in and lost.


Alexis Tsipras

After seven months of wondering whether Greece's place in the eurozone could survive the election of the far-left Syriza Party's Alexis Tsipras as prime minister, we have the answer: Yes. Now the question is whether Tsipras will survive the deals he had to cut to make it happen.

Earlier today, the German parliament formally approved a third bailout for the struggling country totaling some €86 billion over the next three years. That vote was the final obstacle that needed to be overcome before the first infusion of cash could be released. Greece is now cleared to receive €13 billion first thing in the morning.

You'll notice the continent isn't wasting any time in completing the transaction, and there's a reason for that—tomorrow is also the deadline for Tsipras to make a major debt payment to the European Central Bank (ECB) that he would not be able to afford otherwise.

So the melodrama that's played out in Europe since Tsipras rose to power in January has mostly come to a close. Greece will not crash out of the currency union; after much resistance, its government gave in to the demands of the "troika" of creditors in the ECB, the International Monetary Fund, and neighboring countries. But although Tsipras was able to garner approval for the bailout deal in Greece's parliament, along the way he lost the support of many within his own party. As a result, tomorrow he'll likely call for a vote of confidence that he is by no means guaranteed to win.

From a report in Fortune late last week:

"I do not regret my decision to compromise," Tsipras said in parliament as he defended the bailout from euro zone and International Monetary Fund creditors. "We undertook the responsibility to stay alive over choosing suicide."

But the vote left the government with support from within its own coalition below the threshold of 120 votes in the 300-seat chamber, the minimum needed to command a majority and survive a confidence vote if others abstain.

In response, government officials said Tsipras was expected to call a confidence vote in parliament after Greece makes a debt payment to the European Central Bank on Aug. 20—a move that could trigger the government's collapse and snap elections.

A senior lawmaker, Makis Voridis, from the opposition New Democracy said his party would vote against Tsipras's coalition, raising the odds it would be toppled.

If there's a silver lining to the situation from Tsipras' perspective, it's that he remains broadly popular among voters. Twice this year already the Greek people have rallied to the polls to support him—first in January when he was initially elected and again last month after he called a surprise referendum over whether or not to agree to the troika's demands.

Of course, voters came out strongly against the terms and then Tsipras proceeded to agree to an even less favorable deal. So his future really does seem to hinge on how recalcitrant the electorate will be feeling come September.