Greek Prime Minister Alexis Tsipras was left with a wafer-thin majority in parliament on Tuesday after a lawmaker from his fragile left-right coalition quit over an agreement with neighbouring Former Yugoslav Republic of Macedonia (FYROM) to resolve a dispute over its name.
Greece and FYROM signed a pact this month to rename the latter North Macedonia, in an attempt to end the decades-old dispute that has prevented FYROM from joining the European Union and NATO.
But the move has fuelled a storm of protest on both sides of the border; FYROM President Gjorge Ivanov on Tuesday refused to sign the accord ratified by his country's parliament, calling it 'criminal'. In northern Greece, protesters clashed with police on Monday night.
Lawmaker George Lazaridis of the junior coalition partner Independent Greeks (ANEL) resigned on Tuesday. He is the second member of parliament to abandon the right-wing party this month, bringing the government's majority down to just 152 seats out of 300 in parliament.
It is the slimmest majority for Tsipras since he won an election in 2015. He is trailing opinion polls, suffering the brunt of voter discontent with economic reforms under international bailouts the crisis-hit country has required since 2010.
New Democracy, the opposition conservatives, have been consistently ahead in polls for months. Yet Tsipras survived a no-confidence vote on June 16.
Government Spokesman Dimitris Tzanakopoulos said the resignation of Lazaridis would not dislodge the government, which has just concluded a debt relief package with Greece's creditors. Its full term in office expires in late 2019.
"Not only is it not threatened, but the government majority is absolutely stable," Tzanakopoulos told a Greek radio station.
However any sign of political instability is likely to be closely watched by markets.
"Political stability is one of the parameters where credit rating agencies place a lot of weight," said a senior economist who declined to be identified.
"Developments such as this that potentially increase political risk could delay the further upgrading of Greece's credit rating as it hampers the predictability of government policy."
Greeks have long resented use of the name Macedonia by their northern neighbour, saying it implies territorial claims over a Greek province which shares the name, and an attempt to hijack Greek history.
ANEL lawmakers have consistently opposed any deal which would include the word "Macedonia" in the former Yugoslav republic's name.
"ANEL has, from its inception, been against any use of the term 'Macedonia' by neighbours," Lazaridis wrote in his resignation letter. [Reuters]