Greek Prime Minister Costas Karamanlis yesterday called early elections on October 4, ending weeks of speculation about his hard-pressed government's political future amid a looming economic crisis.
"I asked President Karolos Papoulias to disband Parliament on Monday so that elections can be held on October 4," Karamanlis said in a televised address.
"We have two difficult years ahead of us, 2010 in particular will be crucial for the course of the economy," he said.
Expected for weeks, the PM's move brings the curtain down on an embattled conservative administration barely halfway through its four-year term, hobbled by scandals and restricted by a majority of just one deputy in Parliament.
The coming months were expected to be harder still. Greece has barely escaped recession in the global economic downturn but with unemployment rising and income sources drying up, international observers say this is unlikely to continue for long.
Greece's public deficit is expected to reach 5.7 per cent next year according to European forecasts, alongside a debt of more than 100 per cent of GDP, prompting both the International Monetary Fund and the European Union to push for structural reforms.
"Public revenue is considerably reduced, borrowing has increased sharply to €60 billion, there is a real problem of liquidity and the government is having trouble drawing up the 2010 budget," economist George Pagoulatos said.
Mr Karamanlis, 52, noted that an early election was likely in March anyway as the socialist opposition, led by former foreign minister George Papandreou, did not intend to support Mr Papoulias' election to a new presidential mandate.
The Greek President, elected by the single-chamber Parliament, needs the votes of at least 200 out of 300 lawmakers or new elections must be called.
On Wednesday, the son of longtime prime minister and PASOK party founder Andreas Papandreou noted that the conservative New Democracy party had been entrusted with power in 2004 and 2007 and had failed.
Several ministers and high-profile ruling party cadres had opposed the early ballot, among them the PM's own cousin Michalis Liapis who said the party had failed its voters.
"With what arguments can we ask for the people's vote again after appearing to confess that we failed?" the former minister publicly wondered on Thursday.
Opposition newspapers were scathing yesterday, while welcoming Mr Karamanlis's decision to put his head on the electoral block.
"I failed: but vote for me again," was the withering headline in the socialist daily Ta Nea.
The neo-liberal Kathimerini was also critical.
"Mr Karamanlis did not take the necessary (economic) decisions when he had a strong majority," it said.
That majority is down to just one vote after Karamanlis was forced to axe a dissident lawmaker in a scandal over a property deal that also sparked the resignation of two ministers politically close to the PM.
"Social discontent is on the rise, the unions have already announced a major mobilisation and the right looks set to take more blows," said political analyst Thomas Gerakis.
Mr Karamanlis, who first became premier in March 2004 and was re-elected in September 2007, has seen his popularity dive.
In December he faced criticism as rioting erupted nationwide over the police killing of an Athens teenager.
In June's European elections, his New Democracy Party garnered the second worst EU vote tally in its history, while Papandreou's socialists registered their first victory in five years.
The most recent opinion polls suggest that PASOK leads New Democracy by around six percentage points.