[Peace-discuss] HuffPo: Bernie Sanders Blasts Greece's Creditors

[Robert Naiman]

http://www.huffingtonpost.com/2015/07/01/bernie-sanders-greece_n_7709322.html?1435798531

Bernie Sanders Blasts Greece's Creditors

Sen. Bernie Sanders (I-Vt.) attacked the International Monetary Fund and
European authorities on Wednesday for imposing what he called excessive
austerity measures on Greece in negotiations over the country’s debt
payments.

“It is unacceptable that the International Monetary Fund and European
policymakers have refused to work with the Greek government on a sensible
plan to improve its economy and pay back its debt,” Sanders said in an
exclusive statement to The Huffington Post. “At a time of grotesque wealth
inequality, the pensions of the people in Greece should not be cut even
further to pay back some of the largest banks and wealthiest financiers in
the world.”

Sanders, a 2016 Democratic presidential candidate and veteran progressive
lawmaker, called the loans-for-austerity policies that the IMF and eurozone
nations have imposed on Greece an “abysmal failure,” and demanded that the
United States and other world powers grant Greece new debt-repayment terms
that would allow its economy to recover from the damage it has sustained
since 2008.

“Instead of trying to force the Greek government and its people into even
more economic pain and suffering, international leaders throughout the
world, including the United States, should enable Greece to enact
pro-growth policies that improve the lives of all of its people, not just
the wealthy few,” Sanders said.

Sanders appeared to single out the IMF, the creditor over which the United
States has the most direct influence. The U.S. controls more votes in IMF
decisions than any other nation.

“If Greece’s economy is going to succeed, these austerity policies must
end,” Sanders said. “The IMF must give the Greek government the flexibility
and time that it needs to grow its economy in a fair way.”

Sanders has for months been urging the United States to use its influence
to secure better terms for Greece. In February, when negotiations between
Greece and its so-called troika of creditors -- the IMF, the European
Central Bank and the European Commission, representing the eurozone nations
-- had reached a standstill, Sanders asked
<http://www.realclearpolitics.com/video/2015/02/10/sen_bernie_sanders_in_midst_of_great_depression_needs_federal_reserve_bailout.html>
the
Federal Reserve to leverage its financial support for the ECB during the
2008 crisis to get the central bank to ease up on Greece. At the time, Sanders
accused
<http://www.theguardian.com/commentisfree/2015/feb/17/the-pro-worker-pro-growth-experiment-in-greece-is-under-threat>Greece’s
creditors of stiffing Greece’s Syriza-led government in an attempt to bring
a friendlier government to power. Syriza, a left-populist party, won
national elections in January on the promise that it would secure relief
from austerity in negotiations with Greece's creditors.

Sanders’ latest appeal comes at an even more urgent time for Greece, with
the country’s membership in the eurozone in greater danger than ever
before. On Tuesday, Greece missed a deadline to repay 1.6 billion euros'
worth of debt to the IMF. The IMF has said it now considers Greece in
arrears, though it will consider the country's request for an extension.
Also on Tuesday, the bailout package from Greece’s creditors expired. At
the last minute, the Greek government had asked
<http://www.reuters.com/article/2015/06/30/us-eurozone-greece-idUSKBN0P40EO20150630>
for
a new two-year loan from eurozone nations to make the IMF payment, but the
other nations refused the request.

Without new rescue loans, Greece will be unable to make upcoming payments
to its creditors or even keep its government running. The country's
creditors have indicated that Greece could still regain access to needed
rescue loans. But on Wednesday,eurozone finance ministers made clear
<http://www.theguardian.com/business/live/2015/jul/01/greek-debt-crisis-creditors-consider-next-moves-after-imf-default-live>
that
they will only resume negotiations after Greece holds a July 5 referendum
vote on the creditors’ latest bailout proposal.

Greek Prime Minister Alexis Tsipras announced the referendum vote on
Saturday after rejecting the creditors’ latest offer. Now he is asking
Greek citizens to vote “no” on the referendum, arguing that this will
strengthen his hand at the negotiating table. Other European leaders have
insisted, however, that a “no” vote will simply amount to a rejection of
Greece’s membership in the eurozone, and will close the door on future
lending. In the meantime, the ECB has halted its emergency liquidity
injections to Greek banks, prompting Greece to institute capital controls
that limit bank withdrawals to 60 euros a day.

Sanders is both the first member of Congress and the first presidential
candidate to publicly weigh in on the most recent round of negotiations
between Greece and its creditors. (The campaigns of Hillary Clinton,
Lincoln Chafee and Martin O'Malley, the other three declared Democratic
presidential candidates, did not immediately respond to requests for
comment.) His statement will likely be hailed as a positive step by the
progressive U.S. activists who have been calling on members of Congress to
pressure the IMF to offer Greece better terms. As of Wednesday
evening, a MoveOn
petition
<http://petitions.moveon.org/sign/congress-oppose-imf-assault?source=s.icn.tw&r_by=1446339>
initiated
by Robert Naiman of the group Just Foreign Policy, asking Congress to
“oppose [the] IMF assault on Greek democracy,” had more than 8,000
signatures. The Working Families Party has launched
<http://workingfamilies.org/2015/06/greece-democracy-austerity/> a similar
petition campaign.

And the substance of Sanders’ criticism is shared by a broad array of
economists who argue that the rapid fiscal tightening imposed on Greece has
pushed it into an economic depression and trapped it in an endless cycle of
debt. As a condition of two bailouts in the past five years totaling 240
billion euros, Greece’s international creditors have demanded massive
spending cuts, tax increases and other reforms. (As of January, only 11
percent
<http://www.huffingtonpost.com/2015/06/21/europe-greece-debt-deal_n_7632808.html>
of
those bailout funds has been used to finance government operations,
according to an analysis by the news site MacroPolis. The rest of the funds
have gone toward paying or servicing Greece's debts.)

While the austerity regime has allowed Greece to meet short-term
obligations to its creditors, it has devastated the country's economy
<http://www.huffingtonpost.com/2015/06/30/greek-austerity-toll_n_7696650.html>.
Greece’s GDP has shrunk by over 25 percent since 2008. Over a quarter of
the population is now unemployed, and one-third of Greek citizens are
living in poverty. The country’s public debt stands at 177 percent the size
of its economy -- a level that is widely believed to be unsustainable.

It's not clear what impact, if any, Sanders’ statement will have on the
Greek crisis, since the United States -- notwithstanding its controlling
votes at the IMF -- has remained largely on the sidelines during the
current impasse. Treasury Secretary Jack Lew has been in close consultation
with his eurozone and Greek counterparts throughout negotiations, but he's
refrained from specific prescriptions, instead making broad appeals for
both sides to compromise. Peter Doyle, a former senior manager at the IMF,
criticized the approach in an interview with HuffPost
<http://www.huffingtonpost.com/2015/06/30/greek-debt-crisis-us_n_7698026.html>
 on Wednesday, arguing that the Obama administration should have vetoed a
redlined document the creditors presented to Greece on June 26 that was
viewed as especially humiliating.

As recently as February, President Barack Obama
<http://news.yahoo.com/obama-joins-ally-list-greek-austerity-relief-033040983.html>
was
arguing that excessive austerity policies can prevent struggling countries
from recovering economically.

"You cannot keep on squeezing countries that are in the midst of
depression," the president said then, a remark that was widely interpreted
as an admonishment to Germany. "At some point, there has to be a growth
strategy in order for them to pay off their debts to eliminate some of
their deficits."

At a Tuesday press conference, Obama made no such appeals. Instead, he used
the occasion to downplay the impact of the Greek crisis on the U.S.
economy, calling the threat of a Greek default and eurozone departure an
"issue of substantial concern," but one that is "primarily of concern to
Europe."

Sanders, for his part, argues that the United States has an interest in
helping Greece attain economic relief in order to safeguard the country’s
democracy. He cites the rise of Nazism in Germany after World War I as an
example of how austerity-stricken economies are susceptible to
authoritarian takeovers.

“Let us not forget, after World War I, the Allies imposed oppressive
austerity on Germany as part of the Versailles Treaty,” Sanders said in the
statement to HuffPost. “As a result, unemployment skyrocketed, the people
suffered, and the policies of austerity gave rise to the Nazi Party. We
cannot let a situation like that ever happen again.”

Robert Naiman
Policy Director
Just Foreign Policy
www.justforeignpolicy.org
naiman at justforeignpolicy.org
(202) 448-2898 x1
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