|YESTERDAY, the Greek electorate, defying threats of punishment from the leadership of European institutions, voted for an anti-austerity government.
Now there is going to be a sustained confrontation between the new Greek government and the leadership of the European institutions over the demands of the Greek government to re-negotiate the terms of Greece’s continued membership in the Euro. If past experience is any guide, it is likely that the U.S. government, directly and through its influence over the IMF, will play a significant role in the outcome of this confrontation, although the U.S. role is not likely to be well-reported in U.S. media.
The ripples of this confrontation are going to be huge. It will dramatically affect what happens in Spain, in Italy, and beyond. Fundamental questions will be raised about what the boundary is between what you have to accept and what you don’t have to accept. The new Greek government has promised to raise the minimum wage. Will they be allowed to do that? That’s a big no-no in the IMF orthodoxy. The new Greek government has promised to turn the electricity back on for people who were turned off because they couldn’t pay. Will they be allowed to do that? That’s a big no-no in the IMF orthodoxy.
If this election had happened in Latin America, there would be a group of politically engaged Americans already mobilized to defend the new government politically through engagement with U.S. institutions. (By “politically engaged” I mean “people who contact their Members of Congress.”) There’s no “solidarity with Greece” movement in the U.S. that’s ready to engage Congress, that’s ready to call out the U.S. Treasury Department’s policies on Greece at the IMF, that’s ready to press Obama to use his influence with the leaders of the European institutions to press them to compromise with the demands of the Greek electorate.
What can we do to help this situation?