Vatican Academy Ponders Greek Crisis

(05 May 10 – RV) Rethinking the European Treaty as a way out of the Greek crisis, the danger of the ‘financialisation' of human relationships and bailouts that are draining development funds were just some of the issues examined this week at the Vatican.

"The crisis in the global economy. Re-planning our journey", was the theme of 16^th Plenary Assembly of the Pontifical Academy for Social Sciences that ended Wednesday.

Fifty international experts from the world of business and finance, from Universities and civil society gathered for four days to debate the effects of the current crisis.

Academy President, Harvard Prof. Mary Ann Glendon, presented their conclusions to the press, extracting three issues from the many hours of discussions and dozens of papers presented during the Plenary: the reasons for the economic crisis, ongoing serious financial turmoil, and its consequences for the real economy.

" A great many of our contributions are papers focused on the crisis as a series of failures: financial failures, regulatory failures, but also moral failures".

As reiterated by Benedict XVI last Friday in his address to members of the Academy, participants started from the erroneous assumption “that the market is capable of self regulation; apart from public intervention and the support of internalized moral standards”.

The first issue to be studied in depth, was “the danger of the “financialization” of human relations, in which human activities, even in the family, are reduced to a merely commercial dimension”. The second aspect to be investigated was the impact of the financial instability caused by rich countries on poorer nations; “A focus on financial instrument reform should not distract from basic development policy and investment in rudimentary human capital – nutrition, health and basic education”.

The third issue to be considered was the governance of economic activity, and the ongoing fallout from the Greek crisis, which Glendon said, offered further food for thought: “The principles laid out in Caritas in Veritate about the need for stronger regulation of international finance were discussed with various concrete measures suggested in order to ensure greater transparency in financial instruments and to avoid the moral hazard problems arising from bailouts. With reference to the Greek crisis, our expert guests addressed the recent package of relief measures, as well as the possibility that new European structures might be needed, not excluding the possibility of a new treaty to better secure the foundations of the common currency”.