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Vatican banker slams Europe, US over debt crisis

Pope Benedict XVI has often been critical of financiers, blaming them for helping to the start the global financial crisis.

Amplify’d from news.ph.msn.com

Vatican banker slams Europe, US over debt crisis

The head of the Vatican bank criticised "harmful" European bailouts of debt-stricken economies and "self-limiting" US policies to promote growth through debt, in interviews published this week.

Ettore Gotti Tedeschi, head of the Institute for Works of Religion, the Vatican state bank which manages the accounts of major Catholic religious orders, said private savings should be used to boost growth instead of cutting debt.

"If resources have to be taken away from families, why not immediately use them to promote economic growth? Why use them to reduce debt?... It is 1,000 times better to use them for growth," Gotti Tedeschi told Vatican radio.

In another interview with the Vatican official daily Osservatore Romano on Monday, Gotti Tedeschi criticised the European bailouts as "inflationary manoeuvres to reduce debt and uncertainty" that were ultimately "harmful".

"By using for example 10 percent of family savings in a country for healthy and market-leading medium-sized businesses... it would be possible to put major capital at the disposal of tens of thousands of companies," he said.

The pope's banker also criticised the United States for its policy of "keeping gross domestic product growth high by supporting it with debt."

Major economic powers should agree "that only a period of austerity, managed with integrity, can be the real key towards restoring growth," he added.

Pope Benedict XVI has often been critical of financiers, blaming them for helping to the start the global financial crisis.

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