EU calls on Greece to stick with reforms as PM quits

The new election, eight months after Tsipras swept to power on now-broken promises of ending lender-imposed austerity, injects renewed uncertainty into Greek policies.

The European Commission urged Greece to stick to commitments it has made to reform its economy as Prime Minister Alexis Tsipras called a snap election within hours of new EU bailout cash arriving in Athens. 

"It is crucial that Greece maintains its commitments to the euro zone," said Dutch Finance Minister Jeroen Dijsselbloem, who as chair of his euro zone peers, led talks on a new 86 billion-euro facility agreed last Friday. 

"I recall the broad support in the Greek parliament for the new programme and reform package and I hope the elections will lead to even more support in the new Greek parliament. Hopefully these elections will take place relatively soon so Greece can take important next steps in October, as foreseen." 

Brussels had been braced for an election since Tsipras won parliamentary support last week to fulfil euro zone lenders' conditions only with opposition backing, following a revolt by nearly a third of lawmakers from his left-wing Syriza bloc. 

The new election, eight months after Tsipras swept to power on now-broken promises of ending lender-imposed austerity, injects renewed uncertainty into Greek policies. But some senior EU officials stressed that the vote could reinforce reforms. 

"Swift elections in Greece can be a way to broaden support for ESM stability support programme," tweeted Martin Selmayr, the chief-of-staff to Commission President Jean-Claude Juncker. 

Annika Breidthardt, a spokeswoman for the EU executive, also said that a new Greek government should stick to the loan terms in the memorandum of understanding (MoU) signed with the European Stability Mechanism (ESM) late on Wednesday: 

"EU Commission takes note of announcement in Greece," she tweeted. "Broad support for MoU and sticking to commitments will be key for success." 

The ESM, backed by the governments of the 19 euro zone states, transferred 13 billion euros to Greece on Thursday, largely to pay off maturing debts to the European Central Bank and other EU creditors. 

It is the first instalment of up to 86 billion euros that international lenders have agreed to provide Athens over three years, if it meets conditions. 

A further 10 billion euros was set aside on Thursday for a 25 billion-euro package to recapitalise Greek banks, part of the overall 86 billion euros. In all, 26 billion euros are available to Athens in a first tranche of credit before its compliance with terms is reviewed in October. 

European Economics Commissioner Pierre Moscovici tweeted: "Taking note of Tsipras decision. Greece signed up to new programme. Broad support and determined delivery key for its success." 

Earlier in the day, the Commission issued a report on its assessment of how Greece could promote social justice and economic growth by implementing measures recommended under the bailout programme, the country's third since 2010. 

Among measures creditors want to see are reductions in spending on pensions, the elimination of many discounts on VAT sales tax that the Commission argues benefit the rich, and a crackdown on tax evasion and special tax deals for vested interests, including shipping tycoons and farmers.

(Additional reporting by Toby Sterling in Amsterdam)