The Vatican supports a report that requires reforms to relieve the global debt crisis that affects billions of people in developing countries in which there are 30 international experts in economics, including Nobel Prize Joseph Stiglitz and former Minister of Economy of Argentina Martín Guzmán.
The document, entitled The jubilee report: a plan to face debt and development crises and build financial bases for a sustainable global economy focused on peoplewas presented at the Pontifical Academy of Social Sciences of the Vatican this Friday, as one of the main initiatives of the Jubilee Year of 2025.
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The publication is the work of the Jubileo Commission, created by Pope Francis in June 2024 to seek an international mechanism that will carry out a restructuring of sovereign debt based on ethical principles. It is an initiative that is currently supported by Pope Leo XIV.
97 billion world public debt dollars
According to the data handled by the UNin 2023 the world public debt reached 97 billion dollars, an increase of 5.6 billion compared to 2022.
The document denounces, for example, that more than 50 developing countries already allocate more than 10% of their fiscal income only to the payment of interest, in a dynamic that deviates essential resources from vital sectors such as health, education or climatic resilience.
“The debt crisis suffocating the global financial system is also feeding a development crisis,” reads the report.
Thus proposes a series of measures and recommendations to transform the international financial system into an instrument of justice and sustainability. Among them, the creation of an international bankruptcy mechanism for sovereign countries, similar to those that exist for private companies; End the bailouts with public money to private investors and facilitate bridge loans and short -term financial support for countries in crisis.
The foronation of the external debt, part of the legacy of San Juan Pablo II
The initiative is registered within the spirit of the Jubilee Year, traditionally associated with mercy and forgiveness of debts. In fact, in the papal bull Hope you don’t disappointPope Francis expressly requested governments to show their clemency with extraordinary measures, such as the condonation of external debt to poor countries.
In any case, it is not something new in the Catholic tradition. The document recovers the spirit of the jubilee of the year 2000, when in 1997 San Juan Paul II gave rise to a true global movement, based on the social doctrine of the Church, in favor of the relief of the debt of the most impoverished countries. That call gave rise to the “Jubilee 2000” campaign, which managed to collect millions of firms worldwide and mobilized religious communities of all traditions. Thanks to this movement, more than 100,000 million dollars of debt were canceled.
“Global finances must be at the service of people and the planet – not punish the poorest to protect the benefits,” concludes the report.
Presentation at the Pontifical Academy of Social Sciences of the Vatican
The report has been presented this morning at the Pontifical Academy of Social Sciences in a day dedicated to discussing how reforms of international financial architecture could be carried out to move towards a truly focused on people system.
Economist Joseph Stiglitz, Nobel Prize in Economics, professor at Columbia University and Honorary Academic of the Pass, launched a forceful called to “stop the abuses of the great private creditors.”
“Normally, we talk about shared responsibility between creditors and debtors, but I would say that there is a greater responsibility in the creditors. These are voluntary transactions. No one has forced the creditors to provide money and are supposed to be the experts in risk analysis,” he said in his speech.
Reduce interest with multilateral development banks
The economist was especially critical of Blackrock and other great funds, which – he said – encourage a type of high -risk loan that ends in crisis.
Thus he opted to reinforce the role of multilateral development banks, which can make loans at lower rates, something that “would help reduce interest and make sustainable debt.”
Within the framework of the International Meeting on Debt, Social Justice and Development held at the headquarters of the Pontifical Academy of Social Sciences, the representative of Cáritas Internationalis, Alfonso Apiselo, requested that the technical debate on debt never loses sight of the most affected people.
“We are here to talk about sustainable growth, but the real question is: sustainable growth for whom? That is the question that they ask us again and again from the communities when we launch campaigns such as Turn Debt Into Hope”, He explained.
Speaking in the name of the global network of 162 organizations that make up Cáritas, he stressed that the speech of “sustainability” runs the risk of becoming an empty slogan if its inclusive orientation is not explicit: “We have to talk about sustainable growth for all, not only for a few. And we must always remember it, especially when we speak from the technical, because behind each figure there are people who live these realities.”
A change in the debt narrative
He also focused on the need to make a change in the narrative about the debt: “We must frame this struggle for debt justice as a situation where everyone wins. If we work for the poor, political leaders must understand that they will also benefit.”
On the other hand, Professor Kevin Gallagher, director of the Global Development Policy Center at Boston University, pointed to international organizations such as the International Monetary Fund (IMF) that have forced poor countries to “prematurely open their capital accounts.”
However, he also recognized the internal responsibility of many developing countries that, as the report points out, “have requested too much and invested very little.”
In any case, he made it clear that although the “debt relief is essential”, it is also necessary to propose viable implementation measures within the current international scenario that transform the financial system.
“We have already learned from the last condonation of the 2009 Jubilee that the relief of debt without reforms in international financial architecture will only make us repeat this whole process. It is a pity that we are again in this situation. We do not repeat the same errors,” he concluded.
Victoria Cardiel
Victoria Cardiel is a journalist specialized in social and religious information issues. Since 2013, he has covered all the news of the Vatican for various media, such as the Spanish news agency Europa Press, or the weekly of the Archdiocese of Madrid, Alfa and Omega.