Message from Rome: Time for a new Jubilee

Added 04 Jun 2014

Representatives of the Global Jubilee Debt Relief Coalition visited the Vatican in Rome last month to discuss what to do about the global debt crisis. High and surging debt levels are causing economic and developmental problems once again. This time it’s a problem affecting every region of the world. The ethical dynamite of the ‘who owes whom and what and why’ is dividing humanity into creditors and debtors. A new Jubilee is long overdue.

Breaking the chains of debt

The Bible’s Old Testament describes a practice from the ancient world that could well be the world’s first insolvency regime. Every seven years, slaves and prisoners were to be freed, and debts were to be forgiven. This seventh year is called the Jubilee.

Photo: The Jubilee delegation with Cardinal Turkson

The challenges that societies faced several thousand years ago are not so different from the challenges we are facing today. For a society and its economy to prosper and flourish, you need to address its debt overhangs from time to time. First, because the ethical problem of debt justice needs to be dealt with in order to prevent societies from falling apart. Second, because debt overhangs lead to an economically inefficient concentration and misallocation of economic resources, thus preventing their effective use, and undermining growth and development. 

A new Jubilee is overdue

The legacy of the global financial crisis is that debt burdens have once again become unbearably high. As Eurodad described in a recent research report, every region in the world is suffering from high debt burdens and severe debt vulnerabilities. The measures taken by policy-makers so far – in particular monetary easing and bank bailouts – have not fixed the problem, because they have not cancelled the debts, they have just moved them around. 

Photo: Presenting the fair and transparent debt workout procedure at the Pope's audience

We are not alone in our analysis. The International Monetary Fund’s Christine Lagarde recently presented a study on the European recovery in Brussels, which analysed that high levels of private debt are a key impediment. She called for strengthened insolvency frameworks.

 As for public debt, leading economists such as Joe Stiglitz have argued for decades that the world economy needs a decent state insolvency regime in order to function. This is particularly pertinent since we adopted a capitalist economy, in which speculation is pandemic and boom-bust development is more the rule than the exception.

Unfortunately, since Moses contributed the Jubilee debt relief concept to the Book of Leviticus in the Old Testament in 1400 B.C., policy-makers have not made much progress in the area of insolvency frameworks for sovereign debtors.  Which is why a delegation of debt justice campaigners decided to turn their backs on the dormant bureaucracies in Brussels and Washington, and set off to Rome.   

Photo: The Jubilee delegation with Cardinal Parolin

Message from Rome

Pope Jean Paul II’s support was crucial for the Jubilee 2000 campaign – the largest ever development and economic justice-related campaign. Only the engagement of the churches made it possible to gather 26 million signatures on a petition for debt cancellation addressed to the G8, and to mobilise about 100,000 activists, who physically surrounded the G8 summit in Birmingham in 1998 and Cologne in 1999. As a result, governments were pressured to grant debt relief to 39 heavily indebted poor countries.   

Since Pope Francis – nicknamed ‘the pope of the poor’ – took over last year, questions of economic justice have featured highly on the Vatican’s agenda. So the representatives of the regional debt networks – including Eurodad – travelled to Rome last week to discuss what to do about the global debt crisis with the Vatican’s leadership. We met with the Cardinal Parolin, the Secretary of State and Cardinal Turkson and his team from the Pontifical Council for Justice and Peace.

It is clear that the time has come for a new Jubilee and the debates we had in Rome laid the foundations. Visit this blog from time to time to find out more about the next steps. As you know, Rome wasn’t built in a day...