Prime Minister Antonis Samaras named his candidate on Tuesday for the Greek presidency under a gamble that, if it fails, would force snap parliamentary elections when anti-bailout leftists would probably come out on top.
Samaras launched his do-or-die strategy late on Monday, bringing forward by two months a vote in parliament to elect a new head of state, even though he has yet to secure the required support of 180 lawmakers.
While the presidency is largely ceremonial, the Greek constitution demands that parliamentary elections be called if lawmakers fail to approve the government's candidate for the job. Financial markets took the uncertainty badly, with Greek stocks and bonds tumbling on the plan to start voting for the presidency on December 17.
The stakes are high. Opinion polls show the radical leftist Syriza party, which has promised to tear up Greece's EU/IMF aid lifeline, would win if national elections were held now.
While Syriza might struggle to find coalition partners to form an anti-bailout government, snap elections would still risk plunging Greece into a new chapter of uncertainty just as it puts the worst of its economic crisis behind it.
Samaras expressed optimism that the government's candidate, which he named as former European Union environment commissioner Stavros Dimas, would win the presidency.
If so, Samaras would clear a hurdle that has stood in the way of his government for months. Samaras would then be free to finalize contentious terms of an early exit from the bailout, which is widely hated by Greeks due to its demands for austerity, without fearing his own political demise.
"When the current parliament elects a president at the end of the month the clouds will be gone and the country will be ready to officially enter the post-bailout era," the conservative premier said in a televised address.
The Athens stock index fell 10 percent in afternoon trade, with bank shares down almost 14 percent on fears that failure to elect a president would trigger a new bout of political paralysis. Ten-year bond yields rose to 7.86 percent, extending a level that prices Greece out of financing itself from bond markets.
The Samaras gamble effectively forces independent and small party lawmakers to back his plan for pulling Greece out of the bailout program or face the uncertainty of snap elections.
Both Samaras and Syriza leader Alexis Tsipras have been fighting for weeks over a pool of nearly two dozen independents as well as deputies from the small Democratic Left and right-wing Independent Greeks parties whose eventual stance is likely to decide the vote.
Syriza would get 29 percent and Samaras's New Democracy party 24 percent if elections were held now, according to a Pulse poll published on Monday. The poll was conducted between December 5 and 6.
Swallowing the donkey
Deputy Prime Minister Evangelos Venizelos appealed for support on the presidency so that the government could complete the remaining year and a half of its term.
Venizelos, who leads the junior coalition PASOK party, used a colorful Greek idiom to express his belief that the country was pass the worst of its economic crisis which has slashed living standards and driven unemployment to record highs.
"I am calling on and begging the Greek people and wise political parties of the country: now that we have eaten the donkey and almost all its tail and we only have a small part - a difficult bit at the end - to offer their help so that we won't get into a new adventure," he told Greek television.
The hastened vote allows Samaras to avoid voting in more unpopular austerity cuts to meet the demands of EU/IMF lenders until after the presidential vote hurdle is cleared.
Athens had refused to bow to their demands for new cuts in next year's budget, which had held up a final bailout inspection and plans to leave the aid program by the end of the year.
Euro zone ministers said on Monday they favored giving Greece two more months to wrap up the bailout review - a boost for the government since it gives Athens just enough time to hold the presidential vote and national elections if needed, before the bailout exit and terms of a precautionary credit line in the post-bailout period are set.
The presidential vote will be held over three rounds, starting on December 17 and the following two expected on December 23 and 29. The government is almost certain to fail the first two rounds, when it needs the support of 200 lawmakers to secure victory for its candidate.
It has the best shot of winning at the third vote, when it needs the backing of 180 lawmakers.