- Says Crushing Debt Forces ‘Impossible Choices’ On Poorest Nations
THE VATICAN has issued a stark condemnation of the global financial architecture, declaring that foreign debt has become a “profound moral and human rights crisis” that traps developing nations in cycles of poverty and forces them to choose between paying creditors and providing for their own people.
Speaking before the 61st regular session of the United Nations Human Rights Council in Geneva, Archbishop Ettore Balestrero, the Apostolic Nuncio and Permanent Observer of the Holy See, described the burden of sovereign debt as a plague on the most vulnerable populations, particularly in the Global South.
He warned that the relentless demands of debt servicing are systematically draining resources that should be used to build healthy and just societies.
“In too many nations – particularly in the Global South – debt servicing consumes resources that should nourish the common good,” Archbishop Balestrero told the council.
He noted that funds desperately needed for “basic necessities such as food, clean water, health, housing and social protection” are being diverted to meet financial obligations, leaving citizens without a safety net.
The Archbishop painted a grim picture of the “impossible choices” faced by heavily indebted governments. He argued that excessive debt shrinks fiscal space and forces the implementation of harsh austerity measures, which directly undermines the realisation of economic, social, and cultural rights.
“When debt burdens become crushing, States face impossible choices: repay creditors or fulfil basic obligations to their people,” he said. “It is not merely an economic dilemma; it is a profound moral and human rights crisis.”
While urging debtor nations to adhere to principles of good governance, transparency, and fiscal responsibility, Archbishop Balestrero placed a significant portion of the onus on the international community and creditors.
He stressed that public finances should be built on a foundation of trust, where citizens see taxation and expenditure as fair and oriented toward the common good. This trust, he explained, fosters social cohesion and compliance, enabling states to better mobilise resources.
The core of his address was a clear hierarchy of obligations, as he unequivocally asserted that the rights of people must come before the demands of lenders. “When conflicts arise, human rights obligations must take precedence over debt repayment,” he declared.
This principle, he argued, extends to all creditors – bilateral, multilateral, and private – who must ensure their lending practices respect human dignity and do not exacerbate poverty.
He specifically condemned practices that undermine a state’s ability to function, pointing to “illegal debts, tax competition and predatory lending” as forces that “erode the social contract and hinder States’ capacities to meet core obligations.”
Concluding his intervention with a message of urgency and hope, Archbishop Balestrero quoted Pope Leo XIV, calling for a concerted global effort to heal a fractured world.
“Every effort should be made to overcome the global inequalities… that are carving deep divides between continents, countries and even within individual societies,” he said, urging the international community to re-evaluate a system he argues is perpetuating the very inequities the Human Rights Council was convened to solve.
