But what if the economy had stayed in free-fall, unemployment reached crisis levels of over 25%, and the recovery never came? That’s what it’s like right now for the people of Greece. Years of austerity policies mandated by the European Union have done nothing but continue crushing unemployment and slow down an economic recovery.
Now, the titans of global finance just gave Greek’s government an ultimatum: impose even more cuts in living standards, or else we’re cutting off all financial aid.
Greece — the birthplace of democracy — is making a simple request: “Let our people vote on this proposal.” The vote is this Sunday, July 5th, but European financial leaders are already putting the squeeze on Greece and pulling their money out.
We can’t allow these global finance titans to blackmail Greece’s democracy with their wealth. The U.S. controls the most votes on the board of the International Monetary Fund, and can use its influence to soften negotiations with Greece.
Major cuts to wages and pensions. Regressive taxes on working people. Deregulation. It’s called austerity economics. It’s the Tea Party economic agenda on a global scale. And just like the agenda of the big money backers behind the Tea Party, it never ever works — except for the bankers.
Wisconsin Governor Scott Walker promised to create jobs by attacking unions and slashing public sector jobs. Kansas Governor Sam Brownback slashed taxes and cut public services on the theory that it would spark growth. Both plans failed — miserably. And even though the global austerity agenda fails every time, the bankers push it again and again.
The financial and political titans of the world would like us to believe that “austerity” is simply the bitter medicine we must accept in order to generate economic growth. But it’s not medicine at all — it’s poison. It is smothering working people, and threatening democracy itself. The collapse of Greece’s economy and the political blackmail of the Greek people are a case study in unchecked austerity politics.Five months ago, the Greek people decided they’d had enough. They elected a government led by a new populist, progressive political party that vowed to end the policies of austerity economics. But despite the elections, International Monetary Fund isn’t budging. They don’t think the people of Greece — or any country really — should have a say in the matter. And in an act of high stakes brinksmanship they have issued an ultimatum to Greece: take our deal or we will cut off lending altogether, which could force Greece into an even deeper pit of despair.
But here’s where we come in: the United States has a lot of leverage in this negotiation. You see, the U.S. controls 16.74% of the total votes on the board of the IMF — far more than any other country.
The Greek government’s position remains clear: they were elected to reverse austerity, not to add to it. If the Greek people want to give their government a new mandate in the face of an ultimatum, they need to be allowed to vote on it. It is a matter of basic democracy.
News reports indicate that President Obama’s administration is pushing for a stance towards Greece1 that is both economically smarter and more humane, just as he did when he insisted on the big stimulus package in 2009. The ground is shifting and now it’s time for his administration to help put a stop to the global version of austerity politics.