The Vatican has issued a call for comprehensive reforms to the global financial system, highlighting its role in exacerbating poverty and inequality.
The Vatican has emerged as a key voice challenging the current global financial structure, advocating for significant reforms aimed at addressing poverty and inequality. Some of the boldest proposals for tackling international debt do not originate from traditional economic powerhouses but from within the Vatican itself.
This initiative was evident at the United Nations’ 4th International Conference on Financing for Development in Seville, Spain, where the Holy See and Caritas Internationalis emphasized the urgent need for a resolution to the debt crisis affecting many countries. Archbishop Gabriele Caccia, the Vatican’s permanent observer to the U.N., highlighted the plight of developing nations forced to choose between debt service and essential services for their populations. He urged bold action to correct these injustices.
Developing countries currently hold about a third of the global public debt, which topped $102 trillion in 2024, according to the U.N. Trade and Development organization (UNCTAD). Last year, these countries paid $921 billion in net interest, with approximately 3.4 billion people living in nations that allocate more funds to debt repayment than to health and education.
Alistair Dutton, the Secretary General of Caritas, categorized the debt crisis as one of the most rectifiable challenges in global finance, contingent on sufficient political resolve. He advocated for a system that encourages creditors to renegotiate debt and urged international financial institutions to collaborate on a more sustainable debt framework.
This push for reform is aligned with the Vatican’s Jubilee year, a traditional concept rooted in the Hebrew Bible’s Book of Leviticus, which calls for the periodic forgiveness of debts, freedom for slaves, and land redistribution. Pope Francis invoked this tradition by appealing to world leaders to forgive the debts of struggling nations.
Inspired by this vision, the Jubilee Report was developed by the Vatican’s Academy of Social Sciences. It calls for a new global economic structure, including the creation of a sovereign bankruptcy process, broader debt relief, and legal reforms to combat predatory lending practices. The document, endorsed by Pope Leo XIV, was co-authored by notable economists such as Nobel laureate Joseph Stiglitz and former Argentine Finance Minister Martín Guzmán, along with economist Mark Weisbrot.
The report also recommends expanding Special Drawing Rights (SDRs), an International Monetary Fund asset used during emergencies without the burden of interest or policy conditions. In 2021, during the COVID-19 crisis, the IMF distributed $650 billion in SDRs, with $200 billion directed towards developing countries.
Weisbrot highlighted the negative impact of economic conditionalities, often imposed by wealthy nations and international entities, citing Argentina as a prominent example. In 2018, Argentina received a record $57 billion loan from the IMF under stringent austerity conditions. According to Weisbrot, these measures exacerbated inflation and economic instability rather than providing relief.
Weisbrot argues that such issues stem from a lack of accountability in the global financial system, which predominantly serves the interests of affluent nations. The IMF, with significant influence from the U.S. Treasury, shapes the global economy, Weisbrot says, often to the detriment of poorer nations.
Pope Leo XIV appears committed to continuing the efforts of Pope Francis by challenging global economic norms and addressing the injustices inherent in the current system. “The Jubilee Report and the conference in Seville reflect a continuity in the Vatican’s agenda,” Weisbrot noted, emphasizing their importance in addressing life-and-death issues on a global scale.