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Vatican Bank president: More government debt not the answer to economic crisis

August 09, 2011

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The global economic crisis demands an international response that includes austerity in government spending and investment in small and medium-sized businesses, according to the president of the Vatican Bank.

“The great world economies should stop looking for individual solutions which contrast with each other, as they have been doing since the start of the crisis,” writes Ettore Gotti Tedeschi in L’Osservatore Romano. “It is especially necessary to reach a common consensus on the fact that only a period of austerity, managed in a integral way, can be the real key for returning to growth. There are no longer countries that are exempt from the crisis or immune from the temptation of increasing public debt in order to resolve their problems.”

Tedeschi adds:

Strategies for growth exist and are especially valid for countries that can count on economic values such as savings of families, an efficient system of small-medium size business and strong banks in the territory. These countries, instead of allowing themselves to be tempted by apparently easy solutions such as using money from families to reduce public debt, should find ways to channel part of available liquid savings into reinforcement of medium-sized business, without penalizing the savings itself. This is a solution which would truly permit growth and jobs.


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  • Posted by: bsp1022 - Aug. 10, 2011 11:57 AM ET USA

    Ettore Gotti Tedeschi... Are you the one or should we look for another? Hoping now my 20 year search for even one Prince of the Church with bona-fides in economics may be at last rewarded. True enough, this man is sans-ordained, still KUDOS BXVI for a great man gathers to himself real talent. Happy I am to find Ettore's grasp of reality: birth rates drive growth / growth is the only real way solve economic malaise, with appropriate austerity. USCCB... are you listening?

  • Posted by: - Aug. 09, 2011 9:58 PM ET USA

    Tedeschi surely has no special standing because of his association with the Vatican, but it sounds like he has more sense than Obama.

  • Posted by: fenton1015153 - Aug. 09, 2011 8:23 PM ET USA

    It is time that governments stop using the debt based financial system that big private banks wanted. All that system has done is make a very few people filthy rich, drove small retirement funds into the risky stock market and made nations incapable of paying off there debt. President Jackson was right, a national debt owed to a private international bank is more deadly than the armies of our enemies.