VATICAN CITY – A new Vatican document is calling for the gradual creation of a world political authority with broad powers to regulate financial markets and rein in the “inequalities and distortions of capitalist development”.

The document says the current global financial crisis has revealed “selfishness, collective greed and the hoarding of goods on a great scale”. A supranational authority, it says, is needed to place the common good at the centre of international economic activity.

The 41-page text, prepared by the Pontifical Council for Justice and Peace, was released on Oct 24. It is titled Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority.

The document cites the teachings of popes over the last 40 years on the need for a universal public authority that would transcend national interests. The current economic crisis, which has seen growing inequality between the rich and poor of the world, underlines the necessity to take concrete steps toward creating such an authority, it says.

One major step, the document says, should be the reform of the international monetary system in a way that involves developing countries. The document foresees the creation of a “central world bank” that would regulate the flow of monetary exchanges; it says the International Monetary Fund has lost the ability to control the amount of credit risk taken on by the system.

The document also proposes:

• Taxation measures on financial transactions. Revenues could contribute to the creation of a “world reserve fund” to support the economies of countries hit by crisis.

• Forms of recapitalisation of banks with public funds that make support conditional on “virtuous” behaviour aimed at developing the real economy.

• More effective management of financial shadow markets that are largely uncontrolled today.

Such moves would be designed to make the global economy more responsive to the needs of the person, and less “subordinated to the interests of countries that effectively enjoy a position of economic and financial advantage”.

In making the case for a global authority, the document says the continued model of nationalistic self-interest seems “anachronistic and surreal” in the age of globalisation.

“We should not be afraid to propose new ideas, even if they might destabilise pre-existing balances of power that prevail over the weakest,” it says.

The “new world dynamics” call for a “gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities”, the document adds.

“In a world on its way to rapid globalisation, the reference to a world authority becomes the only horizon compatible with the new realities of our time and the needs of humankind”. Helping to usher in this new society is a duty for everyone, especially for Christians, says the Vatican document.

Establishing such an authority will be a delicate project and will no doubt come at a cost of “anguish and suffering” as countries give up particular powers, the document continues. This authority should be set up gradually, on the basis of wide consultation and international agreements, and never imposed by force or coercion, it adds.

This authority should also operate on the principle of subsidiarity, intervening “only when individual, social or financial actors are intrinsically deficient in capacity, or cannot manage by themselves to do what is required of them”.

Countries’ specific identities would be fully respected, it says. CNS

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