PRESS CONFERENCE PRESENTATION OF THE NOTE Pontifical Council for Justice and Peace: "FOR A REFORM OF THE INTERNATIONAL FINANCIAL SYSTEM IN THE PERSPECTIVE OF A PUBLIC AUTHORITY universal jurisdiction"
INTERVENTION OF THE CARD. Peter Kodwo Appiah Turkson
INTERVENTION S.E. MGR. Mario Toso
STATEMENT BY PROF. LEONARDO BECCHETTI
At 11.30 am this morning, in the John Paul II's Vatican press office, is presented with the Note of the Pontifical Council for Justice and Peace: "To reform the international financial system from the perspective of a public authority with jurisdiction universal ".
Speakers at the press conference: the Em. Kodwo Peter Cardinal Appiah Turkson, Chairman of the Pontifical Council for Justice and Peace, IF Bishop Mario Toso, secretary of the Pontifical Council, Prof. Leonardo Becchetti, Professor of Economics, University of Rome "Tor Vergata".
We publish the following actions:
INTERVENTION OF THE CARD. Peter Kodwo Appiah Turkson
On 3 and 4 November next, in Cannes, France, will be the sixth meeting of Heads of Government of the G-20, which will meet to discuss major issues concerning the economy and world finance.
The Holy Father and the Holy See follow these issues with great attention and constantly exhorting and encouraging not only "the action together," but an action based on a "clear vision of all the economic, social, cultural and spiritual "(Preface).
In this spirit of discernment, the Pontifical Council for Justice and Peace, through a note, and shares offer a contribution that can be helpful for the deliberations of the G-20, called for a reform of international financial and monetary system in perspective a public authority to global competence.
The note begins with a prophetic statement contained in the Encyclical Populorum Progressio, Pope Paul VI. It was 1967, and was in the Cold War.
So wrote Pope Paul VI in this famous passage in which the Church defines "expert in humanity": "The current situation requires action of the world together on the basis of a clear vision of all the economic, social, cultural and spiritual. Expert in humanity, the church, far from claiming any way to interfere in the politics of states, "has not targeted a single purpose: to continue, under the impulse of the Holy Comforter, the very work of Christ, who came into the world to witness to the truth (cf. Jn 18:37), to save, not to condemn, to serve, not to be served (cf. Jn 3.17; Mt 20.28, Mk 10.45). "
With these words the Pope's polished Populorum Progressio sketched the shapes of the profound relationship between the Church and the world that are woven into the sacred value of human dignity and in seeking the common good: the two pillars around which has been termed the ' Note the journey of reflection.
In this regard, I echo the words of the living memory of the Holy Father Benedict XVI, who, just two years ago, in 2009, in Caritas in Veritate wrote: "the complexity and gravity of the economic situation rightly cause us concern, but we must take a realistic, trust and hope the new responsibilities to which we called by the prospect of a world in need of a deep cultural renewal and rediscovery of fundamental values on which to build a better future. The crisis forces us to re-engineer our way, to give us new rules and to discover new forms of engagement, to focus on positive experiences and to reject negative ones. The crisis becomes an opportunity for discernment and new strategic planning. In this spirit, with confidence rather than resignation, should face the difficulties of the present moment "(21).
In this sense we need a "new humanistic synthesis", as Benedict XVI has sharply defined, to which we are presenting the document is oriented with the goal of returning forces, in particular financial ones, after their misuse, to be a crucial tool in the service of progress and general development of the real economy (cf. CIV, 65): a new development that soothe the serious social issue which is so hard hitting our time.
In the encyclical Pacem in Terris, 1963, Pope John XXIII, had somehow predicted the current globalization in the sense of gradual unification of the world. And in this regard, he felt the need to harmonize policies to progressively larger power needs of the human community (cf. Pacem in Terris, 70).
As a result of this understanding, John XXIII called for the formation "world public authority" (ibid., 71-74), which was able - without harming the legitimate sovereignty - always to give priority to political and legal dialogue of reason over violence , given in terms of conflict or social injustice, both in terms of war waged.
Connected to the social teaching of the popes and wanting to further specify the practical guidance offered by Benedict XVI in Caritas in veritate (cf. especially No. 67), the Pontifical Council, through the brief reflections here into account not only proposes the establishment of a Public Authority to universal jurisdiction, necessarily non-partisan, but he tries to articulate this proposal in more detail, as will be seen in the section entitled "Towards a reform of the international monetary and financial system responsive to the needs of all peoples" (cf. pp.. 28-35 ).
The Authority shall have the specific purpose of the common good, and will not work and be structured as an additional lever of power of the powerful over the weak. In this sense, it should play that role that non-partisan, through the primacy of the individual, promotes the integral development of the entire human community, understood - in this context - as a "community of nations."
I conclude with the words of Benedict XVI. In the Encyclical Caritas in Truth wrote: "The complexity and gravity of the economic situation rightly cause us concern, but we have to take it with realism, confidence and hope the new responsibilities to which we are called by the prospect of a world in need of a deep cultural renewal and rediscovery of fundamental values on which to build a better future. The crisis forces us to re-engineer our way, to give us new rules and to discover new forms of engagement, to focus on positive experiences and to reject negative ones. The crisis becomes an opportunity for discernment and new strategic planning. In this spirit, with confidence rather than resignation, should face the difficulties of the present moment "(CIV, 21).
Only then can the wind blow hard go of hope, the only one able to remove the biggest opponent of our time: the fear of present and future.
[01488-01.01] [Original text: Italian]
INTERVENTION S.E. MGR. Mario Toso
The note of the Pontifical Council for Justice and Peace on the Reform of international financial and monetary system from the perspective of a public authority intends to propose universal jurisdiction reflection on possible ways forward - in line with the latest social teaching of pontefici1 - to achieve policies and effective financial and monetary institutions and representative globally oriented and authentically human development for all people and peoples.
It is known that the Church, when it intervenes to speak on the social question, it moves on the floor of his expertise in ethics and religion. Therefore, if it addresses the current crisis in the monetary and financial system does not intend to go into purely technical issues, while not ignoring them. The discernment and planning that it has in place are the result of co-optation of knowledge within a variety of theological and moral perspective. Thus, in the analysis, interpretation and practical guidelines drawn up, the Church proposes a knowledge of wisdom, synthetic type, global, ethical and cultural framework which underpins and guides the practice of reform according to the manufacturer and Christian inspiration.
In particular, in the reflections of the Pontifical Council is offering a reinterpretation of the serious economic and financial crisis in which we are still immersed, indicating, among other causes, not just ethical, but more specifically those ideologiche.2 The old ideologies are set. But there are lots of new, no less dangerous for the integral development of the human family. They have a negative impact on international financial and monetary system and globalized, causing inequalities in terms of sustainable economic development, and serious problems of social justice, putting a strain on the people especially the most vulnerable. This is neo-liberal ideologies, which neoutilitariste and technocratic, while flattening the common good of economic, financial and technical exaggerated, jeopardizing the future of the institutions themselves democratiche.3
How to overcome these distorted views and practices? Moving to a new thought, a new global humanism, open to transcendence, that the primacy of being over ethics command more "friend of the person", ie an ethic of brotherhood and solidarity, and the subordination economic and financial policy, responsible for the common good. Only in this way you can win the idolatry of the market with the only rule merely technical objectives and perspectives, and performative, ignoring that ethics should permeate them intimately. In fact, the markets, being created by man, bearing an inscribed natural ethical code, which can not be ignored, otherwise their dehumanization and desemantizzazione.
With regard to the design aspects, namely indication of ways of solution, the Note of the Pontifical Council, buttoning the social teaching of the popes, suggests that globalization is governed by the formation of a public authority to universal jurisdiction. However, this perspective, the pattern laid down by Pope John XXIII's Pacem in Terris is proposed with determination and clarity of Benedict XVI in Caritas in veritate.4 The reflections of the Pontifical Council intend to develop it, wanting it to outline, albeit briefly, suggestions for the reform of existing international institutions, they are more authoritative and democratic. Such an agreement must be an expression of free and shared between people, more representative and more companies, more legitimate, more engaging all political and civil society. They must be impartial, for the good of all, able to offer effective leadership and, at the same time, to allow each country to express and pursue their common good, according to the principle of subsidiarity, in the context of good global common. Only in this way international institutions able to promote the existence of efficient monetary and financial systems and effective, that free markets and stable, governed by an adequate legal framework, functional, sustainable development and social progress of all, inspired by the values of charity in truth. The world authority must not crush, or take advantage of national or regional governments. It must understand its ability to orient and decide, and to punish on the basis of law, to serve as a member of various countries, to grow and possess effective and efficient markets, ie markets overpro-tected by national policies paternalistic, not weakened systematic deficit of public finances and national products, which effectively prevent such markets operate in a global context as institutions open and concorrenziali.5
It should be noted that the considerations presented by the Pontifical Council does not demonize all the money and capital markets, but consider them a "public good": 6 fundamental good then, but not good or ultimate end. For this, they must be functional and ministerial to the realization of the universal common good of the human family, thanks to guidance offered by the various subjects of social policy and civil society, both nationally and internationally.
The text of the Pontifical Council shows, perhaps, his greatest originality, when he tries to outline some of the stages and characteristics of the way to go in establishing a public authority with universal competence with particular reference to the economic and financial.
First, sets out a reform process implemented "as a reference point having the United Nations, because the amplitude of its global responsibility, the ability to assemble the nations of the earth and the diversity of its duties and those of its specialized agencies ".7
Secondly, it offers a clear increase in quality than the existing informal institutions and fora. Must innovate with respect to them, the UN, the Bretton Woods institutions to bankruptcy, 8 to G8 or the G20, for more. It should, in particular the shift determined by a system of governance - that is, horizontal coordination between states without authority non-partisan - to a system that, in addition to horizontal coordination, have impartial authority, with power to decide democratic processes and to sanction under the law. Such a shift towards a "rule of law" and forms of "government" of the world, can not happen if you do not give political expression to pre-existing interdependence and cooperation and, therefore, not abandoning the practice of multilateralism, both in diplomatic and plans for sustainable development and for the pace.9
According to the reflections of the Pontifical Council, enlargement of the current G7 G20, also configured in other ways, most involving, in the guidelines to give the global economy and finance, the responsibility of the countries with highest population, being developing and emerging countries, still does not coincide with what is desirable. This would be a solution is still unsatisfactory and inadequate. In fact, despite the appreciable changes in the composition and function, clearly recognized by the Pontifical Council Note, 10, the G20 does not respond fully to the logic of what should be the United Nations. The countries that make up the G20 can not be considered representative of all peoples. Although expanded, the G20, as is well known is not the UN, is always limited and that an informal forum, among other things, shows the loss of efficiency is more expanded. At the present state of things, the G20 lacks legitimacy and a political mandate from the international community. To this we must add that, not changing the situation threatens to delegitimize or to replace the de facto international institutions - such as the International Monetary Fund, World Bank - which, although in need of deep reforms, are able to represent in an institutional manner all countries and not their small number.
What, therefore, should be done as soon as possible, the second also say the same G20 leaders, in the Final Declaration of Pittsburgh in 2009, is that you have to have a political thought more appropriate and, finally, put his hand to the reform of ' "global architecture" can not be postponed to meet the needs of the common good of the 21 st century. And that, following "creative and realistic ways that tend to enhance the positive aspects of existing institutions and fora," 11 best, so take that structure and mode of a typical universal jurisdiction, according to the principles of solidarity and subsidiarity, as well as representation.
Surely these perspectives require caution and gradualism. It should at the same time not give the decision which involves the pursuit of the realization of which depends on that of the global common good. Among these indicators: a) promote, in the context of existing international institutions - the UN-in particular, also in accordance with their statutes, the junction between the political and economic and civil spheres in world affairs, b) reform existing international institutions in view of institutions and real world financial and monetary policies. It is therefore necessary to reflect changes on existing systems and on the possibility of achieving one or more institutions that perform "functions of a sort of" global central bank, "to regulate the flow and the system of monetary exchange, like the national central banks rediscovering the underlying logic - the logic of peace, coordination and common prosperity - which led to the Bretton Woods Agreements. In this reflection is crucial to the involvement of emerging countries and developing countries, c) at the regional level, we need to promote a similar process, enhancing the role of existing institutions. At European level, for example, could be a reference to the European Central Bank, making, however, correspond proportionate political institutions, in view of greater unity and efficiency in decision-making.
Prior to this is particularly the recovery of the primacy of politics over economics and finance. "We must - we read in the reflections presented here - to recover the primacy of the spiritual and ethics, and, with them, the primacy of politics - responsible for the common good - the economy and finance. The latter should be brought within the bounds of their true vocation and their function, including social, in view of their clear responsibilities towards society, to give life to financial institutions and markets that are currently in the service of the person, are able, ie, to meet the needs of the common good and universal brotherhood, transcending all forms of flat-economism and commercialism performative ".12
Consistent commitment of the political orientation of monetary and financial systems to establish the common good, are suggested by the Pontifical Council, mo 'for example, three possible ways forward: a) measures for the taxation of financial transactions, b) forms of recapitalization of banks, c) distinction between ordinary credit and investment banking. Europe compared to the second point, in these last days he has already expressed its positive opinion.
Here, in short, some parts of projects, drawn up by the reflections in question, and that should be taken not only from the most directly responsible for the common good at the national and supranational levels, from those who, especially in universities and cultural institutes, have called to form the ruling classes tomorrow.
_____________________
1 Cf BENEDICT XVI, Caritas in Veritate, Libreria Editrice Vaticana, Vatican City 2009, nos. 57 and 67.
2 cf. Pontifical Council for Justice and Peace, for a reform of international financial and monetary system from the perspective of a public authority to universal jurisdiction, the Vatican Press, Vatican City 2011, pp.. 7-19.
Cf 3 Ib., P. 18.
4 Cf BENEDICT XVI, Caritas in Veritate, Libreria Editrice Vaticana, Vatican City 2009, No 67.
5 Cf for a reform of international financial and monetary system, pp. 24-25.
6 Cf for a reform of international financial and monetary system, p. 29.
7 Cf Ib., Pp.. 26-27.
8 The International Monetary Fund and World Bank, if you initially have been able to respond to the scene after the Second World War, seem to have gradually lost the mandate and the universal call to implicit Bretton Woods Agreements of which were the result. Ultimately, the International Monetary Fund and World Bank have not been able to meet its objective of monetary and financial stability, economic development and an adequate, so that they would win or at least significantly scaled situations of poverty and inequality and indeed, often have increased, contributing, however, to significantly reduce its international credibility.
9 Cf for a reform of international financial and monetary system, pp. 27-28.
10 Cf for a reform of international financial and monetary system, pp. 30-31.
11 Ib., Pp.. 31-32.
12 Ib., Pp.. 33-34.
[01489-01.01] [Original text: Italian]
STATEMENT BY PROF. LEONARDO BECCHETTI
The good thing about crisis is that they are both moments of great opportunity. The global financial crisis is an opportunity to reform the architecture of the global financial system, strengthen the European Union in terms of harmonization of fiscal policies is progressing more quickly towards the goal of political unity, increase discipline policies national tax.
The Vatican document focuses on two key issues:
i) build a framework of rules of global governance that if you make a frame for the action of global institutions;
ii) reform the international financial system with a series of specific proposals.
On the first point, the global govenance is urgently needed to overcome the asymmetry of the globalization of markets and global institutions and rules that remain predominantly national.
Globalization makes us increasingly interdependent and makes it virtually impossible to ignore the problems of other countries once far: stabunt simul simul cadent.
Only a few examples, there are six fundamental elements of interdependence between economic and financial systems: i) the U.S. debt crisis is a problem that concerns not only that country but savers around the world who invest in it and among the first large countries like China which has invested in Treasury securities a substantial portion of their reserves, ii) the debt crisis and the likely reduction of greek nominal value of government securities in the country (between 20 and 60 percent) will result in serious losses survey of French and German banks that had invested more in that financial asset; iii) the presence of a huge mass of poor and underprivileged in the world, willing to work at wages much lower than those of our employees equal qualifications, protected and unionized, represents a formidable threat to the maintenance of the welfare levels of high-income countries, iv) exit the euro would have serious consequences not only for developing countries but also for Germany itself, which for years has enjoyed the advantage to export their goods to market without the cost of the eurozone countries the appreciation of its exchange rate, and v) the coordination of central banks is now increasingly important in a globally integrated world and developing countries have complained several times recently expansive monetary policy that the American and European central banks (quantitative easing) exported inflation in their countries, vi) for some time in the meetings of the G-20 is trying to coordinate the policies of the countries in deficit and surplus of those trying to encourage the latter to adopt more expansionary policies to boost demand in the world.
There is a big table full of diners who are available for very long spoons. The difference between hell and paradise in this familiar story is that in the first case the guests use spoons to take themselves clumsily groped unsuccessfully while in the latter case, use them to take the other. It 'just this situation in front of which are nation-states in globally integrated markets. Trying to pursue their own short-sighted short-term interest becomes even counterproductive because it is only by cooperating together that you can exit from the crisis.
On the second point (the rules of financial markets), the document adopts some proposals already launched by the Dodd-Frank legislation in the United States and the Committee Vickers in the United Kingdom, not yet implemented and came into force for a number of obstacles.
And 'return key finance the real economy. To do this you must:
i) reduce the leverage of banks too big to fail (30 to 1 leverage and mismatch between current liabilities and long academic activities are among the main causes of spread of the subprime mortgage crisis in the world).
ii) to adopt the so-called Volckerrule that prevent banks from doing proprietary trading with customer deposits.
iii) more strictly regulate the derivatives market as insurance instruments that arise. In the real insurance policies you buy if you are in possession of the underlying financial markets and to ensure this happens in no more than 5 percent of cases. There exists here an EU proposal to achieve this goal with respect to credit default swaps on the bonds.
A fourth proposal concerns the establishment of a tax on financial transactions for the reasons explained in the paragraph that follows.
It 'should ask why the position of economists and civil society (a majority in favor of the EU) against the tax on financial transactions has changed dramatically in recent years. Last year, 130 Italian economists have signed an appeal on his behalf that have been gathered together in the same appeal in 1000 of 53 countries the economists delivered to the finance ministers of the countries of G20in Summit held in Washington on 14 and 15 April 2011 (figures are among the signatories of the first order such as Dani Rodrik, Tony Atkinson, Joseph Stiglitz and Jeffrey Sachs) (http://www.guardian.co.uk/business/2011/apr/13/robin-hood-tax-economists-letter).
There are two reasons for this change of opinion: the events of the global financial crisis and more evidence on that has helped to overcome some prejudices. With the global financial crisis on public finances of some major Western countries have been severely weakened to save the banks and subsequently became the new target of speculative attacks. A part of the financial world has so privatized profits, socialized losses and then used the public funds used for their rescue against them saviors. And 'therefore understandable that the majority of public opinion is of the opinion that those who work in the financial markets should help pay the costs of this crisis, for now sheltered on the most vulnerable. From this point of view the FTT responds to an elementary requirement of justice is indeed urgent and seen the most recent events to maintain social cohesion in the Community.
The second reason for the increased fee was established by the passing of an injury. Until recently it was considered that it was not applicable if the global pain of capital flight from the country who decided to put it into force. This bias is unfounded because there are today, as documented in a research project of the International Monetary Fund, with 23 countries that unilaterally apply the fee (no more than a contract note) without there having been no capital flight (T. Matheson , Taxing Financial Transactions. Issues and Evidence, IMF WorkingPaper No 11/54, March 2011, 8). The country with the highest fee that applies is the UK StampTax the Duty of a single type of asset (tax of 5 per thousand holders of shares listed on the London Stock Exchange). The fee allows you to raise about 5 billion pounds a year. This evidence because of the introduction of the tax proposal Barroso at EU speaks of "harmonization" at European level of taxes on financial transactions and not of their introduction. London has its own tax generated an interesting example of avoidance: the fee for not paying some of the workers left the stock market to build new OTC derivatives (contracts for differences) consisting of bets on changes in share price. Interesting to note, therefore, that the tax has separated into two different markets really interested to invest in equity securities of companies and operators who play variations on short prices. This type of avoidance is already implicitly considered in the proposed Barroso extending the taxation of derivatives (and thus also to contracts for differences). They can also be countered by banning the contract for differences as it does on a secondary market like the United States.
The scientific level, there are numerous works that measure the elasticity of the volume of transactions similar to the introduction of taxes rather than highlighting factors such content and do not support the hypothesis of capital flight. Another reason for which the flight can not happen is that the very high frequency operations to benefit from an advantage of proximity to the physical location of the bag from which the information via the internet (New York Times (2009): Stock Traders FindSpeedPays, in Milliseconds). Move away from the main markets operations would involve the loss of this advantage.
Another objection is unfounded is the impact of the tax cost of capital. To set the rate proposed by Barroso calculations based on models of the capitalization of expected future asset values show that this cost is almost zero (see again Matheson 2011).
http://www.vatican.va/roman_curia/pontifical_councils/justpeace/index.htm
See this Amp at http://amplify.com/u/a1ihy4
