ROME – The US is not necessarily “a nation in decline or struck to the core”, says the head of the Vatican Bank.

“The US remains the most technologically advanced country in the world, with the highest GDP, surpassing one and a half times that of Europe, four times that of China, and 10 times that of Italy,” wrote Mr Ettore Gotti Tedeschi, president of the Vatican Bank, in the Vatican’s newspaper L’Osservatore Romano.

His Aug 9 comments came in the middle of a week of global financial uncertainty after credit ratings agency Standard & Poor’s has marked down the US’ credit rating for the first time in its history amid fears over the country’s ability to pay its debts.

“The fact that it has been declassified does not flatten it to the ground, but probably will cause it to be more humble and open to collaborating with Europe,” said Mr Gotti Tedeschi.

In an attempt to find a solution to the present crisis, Mr Gotti Tedeschi proposed a global summit recognising that all economies are currently in the same fiscal boat.

“Attempts at individual solutions can aggravate the communal situation and favour speculation,” he said. “Only a period of austerity, managed in a integral way, can be the real key for returning to growth.”

He recommended encouraging families to save and then investing part of those savings in small-to-medium size businesses.

“This strategy would guarantee new resources for investments which today banks and funds are not able to obtain; it would produce more aggressive programmes of growth, reinforce employment and even offer greater guarantees to the banks for their financing,” he said.

He suggested that governments that do not have permanent economic advisory boards, consisting of academics and industrialists, should now think of creating such a body. – CNA