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VIII. Statement on the financial crisis

Statement on the current financial and economic crisis, with a focus on Greece, adopted as part of the Report of the Public Issues Committee by the World Council of Churches Central Committee.

04 September 2012

WCC Central Committee meeting, 28 August - 5 September 2012

At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need.
The goal is equality…

(2.Cor. 8. 14, NIV)

1.      We live in an interconnected and interdependent world which is experiencing more than ever before, a severe financial crisis. This crisis is due to various reasons such as unjust economic and financial policies; structural weaknesses of political, economic and financial institutions; and a lack of ethical values in a world that is increasingly dominated by the greed of the powerful seeking short-term advantages and maximum profit and denial of the need of the powerless. The events since 2008 have caused severe strains in the global economy, and have strained public finances even as the millions of people who lost their jobs, pensions and homes in the aftermath continue to clamour for social protection.

2.      Europe has been at the centre of the most recent economic problems, and the immediate challenge for the Euro zone is the financial crisis in Greece. In addition, Italy and Spain, the third- and fourth-largest economies in the euro zone respectively, represent another major problem, with investors pushing the interest rates on their bonds to unsustainable levels. The fear is that financial instability in the Euro zone will provoke another global panic similar to – and potentially graver than – the one in 2008 with adverse consequences for socio-economically weak nations and peoples.

3.      Triggered by the 2008 global financial fallout, Greece’s debt problem arose partly from government mismanagement, but blame also attaches to irresponsible lenders that offered easy loans and stimulated housing bubbles, regulators that failed to regulate, and political leaders who were blind to the challenges of establishing a single European currency system among diverse economies. In Greece, the harsh austerity packages aimed at stabilizing markets and satisfying international creditors have created a new "underclass" of the unemployed, homeless and hungry. Since 2010, taxes have been raised especially indirect taxes of up to more than 20 per cent on food; pensions and state salaries slashed across the board, and retrenchment of public workers in tens of thousands. An alarming unemployment rate, more than 20 percent in general and more than 50 percent among the youth, has caused deteriorating living standards leading to frustration, anger and violence, especially against immigrants. Public nursing programmes for the elderly have been shut down. Small businesses are being forced to close or struggle to survive. Women’s unpaid labour is substituting for cutbacks in social programmes. Suicides have spiralled in the last couple of years.

4.      The ministries of many church congregations are being directly challenged and affected by these changes. As an example, many churches’ feeding and shelter programmes are struggling to keep up with the growing numbers of people availing their services; and the spiritual and pastoral needs of those experiencing these challenges in their families are increasingly profound.

5.      Despite many severe measures, Greece’s debt has not been brought under control. Tax evasion is a significant issue in certain sectors of Greek society. Austerity is resulting in a vicious cycle of economic decline, hampering recovery by dampening domestic demand and eroding national tax revenues, and therefore making it even more challenging for the country to settle its debt. There is no justice when those who had little part in generating the crisis pay the highest price for it. It is immoral to demand austerity and debt repayment at human and social cost which falls unfairly on the weaker members of society. Moreover, there is a need for a healthy approach to creativity, personal and corporate financial responsibility for the sake of the common good, productivity and small business in order to create the optimal conditions for the exercise of generosity, compassion and justice. 

6.      The World Council of Churches (WCC) has been closely observing the global financial situation since the unravelling of financial markets in 2008 and has issued letters addressed to the United Nations General Assembly and the Group 20 as well as statements calling on governments to go beyond short-term measures and to address the roots of the financial and economic crisis.

7.      We believe that reforming the international financial and monetary systems in the context of global public authority is an urgent priority. We need to be engaged in a process of searching for a viable model of sustainable development and associated financial systems.

8.      In this painful financial crisis, the church is being called upon to defend the dignity of all people, as made in the image of God. The crisis is spiritual and moral, as well as economic. The Christian values of justice and love have a renewed importance in Europe today. The excessive differences between the wealthy and the poor, and the growing levels of unemployment, especially among young people, which have developed in recent decades are immoral, and will not form the basis for a healthy society. The church is bound to believe that current events embody a message from God, and will give us an opportunity for discernment to shape our visions for a better future of equality and justice to all God’s people.

The Central Committee of the World Council of Churches, meeting in Kolympari, Crete, Greece, from 28 August to 5 September 2012, therefore:

A.     Affirms its solidarity with the people of Greece, and others who are particularly suffering from the current crisis

B.     Reiterates our call for economic policies which do not encourage irresponsible debt, national or private, and which spread the benefits of wealth more fairly to all citizens, especially the weak and marginalized, including young people ;

C.     Urges the prevention of the recurrence of crises in the future, by the regulation and restructuring of the banking industry, and continuation of search for deep- seated transformations in the current international financial regime, as outlined in the WCC Central Committee statement on “Just Finance and an Economy of Life,” issued in September 2009;

D.    Supports the principle of a financial transaction tax (FTT) as a sensible tool that will enable governments to meet their obligation to protect and fulfil the economic, social and cultural rights of their people. The FTT would not only help to curb speculation, but would also ease sovereign debt loads, transfer the burden from ordinary people to the private sector which set off the crisis in the first place, and considerably expand government fiscal space for spending on urgently needed social protection policies;

E.     Calls up on Churches in this time of crisis to address these issues with a particular focus of talking to power on the one hand and seeking ways of supporting those who are now marginalized by the current financial policies on the other, and commend them for their ongoing attention to the spiritual and pastoral needs of those, including youth, whose lives will be most directly affected by these troubling economic challenges;

F.     Urges the Churches in Europe to stand together and to advocate for common European solutions to the financial and social crisis that help to deepen the project of European Unity as a project of just peace on the continent;

G.    Invites churches and faith based organizations to continue to mobilize and to support one another for the immediate relief and assistance of the weakest members of our society.