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Catholic leaders laud debt plan, hope for more relief

By NCR Staff

Debt levels that many blame for worsening poverty and impending economic and social development in poor nations would be cut by $70 billion, under the terms of an agreement reached June 20 at the summit of G-7 nations in Cologne, Germany.

The agreement, worked out by the finance ministers of the leading industrial powers, must still be implemented by each of the member countries.

Religious and human rights activists greeted the action with cautious optimism, though the dollar amount fell far short of what the activists had proposed.

Some of these groups, including the international Catholic relief organization Caritas, have called for the total cancellation of the debt of the world’s most heavily indebted nations.

Estimates of the total debt load carried by these nations range from $200 billion to $300 billion.

In some nations, the debt load has been linked to extreme hardships borne by the poorest citizens. In Honduras, for example, where well over 30 percent of the national budget is devoted to servicing debt, patients in the public health system are expected to bring their own supplies for surgical procedures because public hospitals cannot afford them.

Prior to the G-7 meeting, a group of 16 bishops representing both creditor and debtor nations met with German Chancellor Gerhard Schröder in Bonn to make the case for debt relief. Bishop Robert J. Banks of Green Bay, Wis., treasurer of the U.S. bishops’ conference, represented the United States.

“We urged broad, quick, deep relief that aids the poor in these countries,” Banks said, reached in Germany after the session with Schröder. Banks called the G-7 initiative “clearly an improvement” over existing measures but said the religious and human rights activists hope for something “more generous” in the months to come.

Banks added that the implementation of the G-7 accord would depend upon action from its member nations. In that regard, he said he supported the Leach bill on debt relief currently making its way through the U.S. House of Representatives. “It’s not perfect, but it certainly is in the spirit of what needs to happen.”

Rep. James Leach, R-Iowa, and chair of the House Committee on Banking and Financial Services, has proposed that the United States pay a share of the cost of $100 billion in debt relief.

Banks said the bishops did not push a specific plan with Schröder but instead discussed the general principles for any effective relief. “The key is that debt relief has to be handled transparently, working with an informed citizenry. It must help the poor.”

“It’s a matter of simple justice for these highly impacted poor countries,” Banks said. “Some are not able to provide basic education or basic health care for their citizens. This can’t go on.”

Bishop Franz Kamphaus of Limburg, Germany, said there was a need for a “radical paradigm change” on the debt question.

“If the global village is to be prevented from turning into a global poorhouse, the consciousness of a common global prosperity is necessary, which the free market is not capable of guaranteeing on its own.”

At the end of their meeting, the bishops signed a statement called the “Cologne Declaration: Putting Life Before Debt.”

Prior to the G-7 meeting, Jubilee 2000, one of the leading nongovernmental organizations campaigning for debt relief, organized a protest in Cologne. More than 20,000 people joined hands to form a human chain around the city to dramatize the need to break the chains of debt. The protest was joined by Irish rock star Bono, lead singer in the group U2.

National Catholic Reporter, July 2, 1999