Describing the austerity policies that European creditors have imposed on Greece as an "abysmal failure," progressive presidential candidate Bernie Sanders on Wednesday chastised the so-called Troika—the International Monetary Fund (IMF), the European Central Bank (ECB), and the European Commission—for inflicting severe "economic pain and suffering" on the Greek people.
"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."
"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."
—Sen. Bernie Sanders
It is not the first time Sen. Sanders (I-Vt.) has made such remarks. "I think it is absolutely imperative that the ECB, the Troika in Europe, work with the Greek government—not in an austerity program which punishes people who are already suffering," he told CNBC in February.
And in a letter sent earlier this year, Sanders called on Federal Reserve Chairwoman Janet Yellen to use her influence with the ECB to push for an end to the Greek austerity policies that have caused economic recession.
"The United States cannot stand idly by while the European Central Bank undermines the new democratically elected government of Greece, induces deflation and risks financial instability," he wrote in the letter dated February 8. "It would be a terrible mistake for the world to forget what happens when a democratically-elected government, as was the case in Germany in the 1920s, is unable to relieve the severe economic suffering of its people... We cannot allow fascism to come to power in a European country due to our unwillingness to reverse harmful austerity policies."
According to the Huffington Post, Sanders made a similar argument on Wednesday, singling out the IMF, the creditor over which the United States has the most direct influence.
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"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. "If Greece’s economy is going to succeed, these austerity policies must end. The IMF must give the Greek government the flexibility and time that it needs to grow its economy in a fair way."
But the nation's foreign creditors, including the IMF, have repeatedly tied more austerity conditions to proposed bailout packages, resulting in a stand-off that set the stage for Sunday's referendum vote.
The HuffPo notes:
[T]he 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 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. 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.
At a Tuesday press conference, President Barack Obama downplayed the impact of the Greek crisis on the U.S. economy, saying the matter of default and a possible Greek exit from the Eurozone was "primarily of concern to Europe."