THE BLOG
07/13/2015 12:14 pm ET Updated Jul 13, 2016

MoveOn and Robert Reich: Save Greece and Reject Global Austerity

MoveOn and Robert Reich have launched an emergency campaign to press the Obama administration to use its influence in the International Monetary Fund to push for a just end to the crisis in Greece.

In an email to MoveOn members Sunday, Reich wrote:

"Greece is all over the news this week--but how come so few people are talking about Wall Street's role in creating the crisis, or what people like us can do to change the outcome?"

Americans watching these events are in a unique position. After the German government and the Greek government, the U.S. government is the one that has the most influence over what happens now.

As Reich wrote [emphasis in original]:

Debt restructuring must be part of any solution for economic reforms in Greece. But instead of doing that, the European powers have made eleventh-hour, draconian demands: slash pensions, privatize even more core state functions, and attack unions and workers' collective bargaining rights.

The U.S. can help make things better ... In addition to diplomatic power, the U.S. has voting power in the International Monetary Fund--one of Greece's creditors.

Indeed, the U.S. has far more voting power in the IMF than any other country - because the U.S. contributes far more tax dollars to the IMF than any other country, and the IMF is governed by one dollar, one vote.

Reich argued:

President Obama and Secretary of the Treasury Jack Lew can use their pulpits and their votes to yield a positive and just outcome. The Greek parliament on Friday approved a new plan that Prime Minister Alexis Tsipras proposed, but so far the European parties aren't offering up the debt restructuring that's needed for a real solution and instead are demanding even more draconian austerity measures from Greece to even keep talking.

The deal announced Monday morning kicks the can forward on the crucial issue of debt relief. It's not an agreement to end the crisis. It's an agreement to continue negotiating on whether to end the crisis.

The U.S. representative to the IMF reports to Treasury Secretary Lew. And Secretary Lew reports to President Obama.

If Greece doesn't get significant debt relief, if its annual debt service is not reduced, there will be no end to the Greek crisis. The IMF has implicitly acknowledged this:

Fund officials said they would not be prepared to put a proposal for a third Greek bailout to the Washington-based organisation's board unless it included both a commitment to economic reform and debt relief.

But there's a world of difference between IMF officials acknowledging that something is true and making actually implemented IMF policies reflect what IMF officials have acknowledged is true.

Among other things, MoveOn proposes to do the following [emphasis in original]:

Take out an ad in a major Washington publication calling on President Obama to use the U.S.'s power in the IMF and diplomatic influence with the European Central Bank to yield a positive outcome. Few are speaking out like this in the U.S., so a little firepower can go a long way.

Drive phone calls to the IMF and Treasury Department offices--they're not used to taking calls from regular folks, so we can really get their attention.

Unfortunately, MoveOn is right that few are speaking out so far. Bernie Sanders spoke out; key progressive Democrats in Congress spoke out. But many have not yet spoken out. And MoveOn is right that "a little firepower" could go a long way. The people who run these institutions think that they can weather the criticisms of (Nobel prize-winning) progressive economists like Paul Krugman and Joe Stiglitz. Brushing aside MoveOn, with its eight million members and its influence with Washington Democrats, would be a different story.

You can support MoveOn's campaign to hold the IMF and U.S. Treasury accountable for what happens to Greece here.