The Vatican has called at the UN in Geneva for global financial reform based on “justice, truth, fairness and solidarity”.
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“The unfettered spread of ‘financial innovation’ has meant that, in many cases, dominant financial practices and operations have become even more opaque and ever more disconnected from underlying real economic activity”, Vatican Permanent Observer to the UN in Geneva Ivan Jurkovič denounced in a November 18 speech at the 12th UNCTAD Debt Management Conference.
The archbishop blasted what he said was the “booming ‘business of debt'” that is expected to mean global debt stocks reach a staggering $255 trillion by the end of the year.
“This puts the debtto-GDP ratio, according to the latest data available, at 262 per cent, more than two and a half times the global GDP”, Jurkovič warned.
He deplored that “several decades of unfettered private credit creation in unregulated financial markets… is now also affecting developing countries”.
Not only is the debt ruining households and businesses, but the “business of debt” has quickly moved into areas “that used to be the preserve of public authorities for reasons of equity, justice and solidarity, such as pensions, the provision of financial services to the poorest, or the management of sovereign debt”, Jurkovič decried.
“‘Hyperglobalization’ – the combined and continuous deregulation of financial, labour and goods markets around the world – has by now resulted in structural shifts in the relations between nation states and large corporations”, Jurkovič said.
The Vatican diplomat lashed the “new breed of corporate rentierism” that he said is using market and lobbying powers to influence policy on everything from intellectual property rights to development financing, as well as to facilitate “predatory corporate rent-extraction”.
“The subjection of sovereign debt titles to immoral financial practices is unacceptable”, Jurkovič further warned, singling out offshore investors for “placing at risk the well-being of the citizens of entire nations to favour exorbitant financial gains”.
Jurkovič proposed a series of “counter-measures” to the “deeply rooted problem in the current economic-financial system” that is overindebtedness.
Those measures included greater regulation, transparency, sovereign debt restructuring and international responsibility.
“Coordinated support and solidarity from the international community is indispensable, not only for individual developing States but also in taking responsibility for just reforms of the international economic-financial system”, the archbishop warned.
“The Holy See considers it essential that we find our way back to a global financial system that is built on firm ethical principles, accompanied by justice, truth, fairness and solidarity”, Jurkovič concluded.
“Given the massiveness and pervasiveness of today’s economic-financial systems, great responsibility lies on the shoulders of those in charge of them.
“But civil society, policy-makers in developing countries and elsewhere, as well as community leaders, intellectuals and all those affected by the activities of powerful economic-financial agents, must work together to bring about such reforms”.