Vatican approves “Jubilee Report” on external debt crisis in developing countries

The Vatican has issued yet another document of little consequence; or rather, it has endorsed an international report aimed at resolving the external debt crisis in developing countries. The document, entitled the “Jubilee Report”, was presented on 20 June 2025 by the Pontifical Academy of Social Sciences. Among its authors are the Nobel laureate Joseph Stiglitz and the former Argentine finance minister Martín Guzmán.

The authors of the report hold that the debt burden stands in the way of development in developing countries: more than 50 countries spend over 10% of their budgets on servicing debt, and in a number of cases interest payments exceed expenditure on healthcare. The authors maintain that the present system urgently requires reform.

Among the proposals are the creation of an international bankruptcy mechanism for sovereign states, a temporary suspension of payments in periods of crisis, a ban on propping up private creditors with public money, and the establishment of a fund to buy back debts on fair terms.

The report calls for a change in the approach to debt forgiveness: it should be regarded not as an act of mercy but as an instrument of justice and sustainable development.

In truth, this is merely another turn in the policy of the former chief economist of the World Bank, Joseph Stiglitz, who has long taken a position of harsh criticism of the International Monetary Fund in its dealings with developing countries. Another named author of the document, Martín Guzmán, is his pupil and follower. Both are Keynesians. Both oppose fiscal austerity, both criticise spending cuts, and both constantly promote the ideas of debt restructuring and of softening the social consequences of crises.

Of course, why economise? Spend extravagantly, steal without measure, and then ask to be forgiven, with someone else paying your debts. In 2012 Greece was forgiven 53% of its public debt under an EU programme; yet it was the EU that brought Greek austerity to the brink of collapse. We recall that Keynesianism does not encourage debt write-offs as a routine practice but regards them as a last resort, although it usually implies, at the same time, a set of reforms that increase production and employment.

As for the Vatican, its economic position does not coincide directly with Keynesian postulates, yet it shares similar values regarding social justice and the role of the state. The social doctrine of the Vatican holds that ethical questions should bear upon economic decisions, so perhaps another way out might be found?

For instance, it would be splendid if the Vatican, instead of proposing the bankruptcy of states, were to take personal part in so costly an undertaking. Let me remind you that the president of the Vatican Bank, Jean-Baptiste de Franssu, has stated that the Vatican, together with Catholic dioceses around the world, has funds available for investment of about 1.75 trillion dollars, and these are not all the funds and assets at the Vatican’s disposal. If you want to change the world, begin with yourself.