A group of economists from the Vatican said that the burgeoning Greek debt crisis reveals a need for a new treaty to protect the 11-year-old euro, as well as a new set of values in the overall global financial system.
Meeting at a special plenary session entitled "Crisis in a Global Economy: Re-planning the Journey," the economists "addressed the recent package of relief measures, as well as the possibility that new European structures might be needed, not excluding the possibility of a new treaty to better secure the foundations of the common currency," a statement read.
Mary Ann Glendon, chairperson of the Pontifical Academy, who hosted the plenary, noted that the crisis in Greece "has also shown the error of the assumption that the market is capable of regulating itself, apart from public intervention and the support of internalized moral standards."
"This assumption is based on an impoverished notion of economic life as a sort of self-calibrating mechanism driven by self-interest and profit-seeking," Glendon continued, according to Spero News. "As such, it overlooks the essentially ethical nature of economics as an activity of and for human beings."
Greater public intervention is needed to "ensure greater transparency in financial instruments and avoid moral risks and problems arising from bailouts," she added.
According to Glendon, the risks of such bailouts include the lost opportunities in using such funds for global development and humanitarian purposes.
"For the first time, our world will soon have 1 billion malnourished people. If one compares the relative cost of the financial bailouts to the amounts needed for basic nutrition, for example, one cannot avoid the conclusion that this crisis has distracted greatly from urgent questions of development," Glendon said. "In our attention given to questions of hunger and health, the Academy stressed also that meeting basic needs, especially for children, beginning in the womb, makes a decisive contribution to economic productivity."
"A focus on financial instrument reform should not distract from basic development policy and investment in rudimentary human capital – nutrition, health and basic education," she added.
European ministers agreed earlier this week to a three-year, 110 billion euro bailout package for Greece, whose parliament recently passed harsh austerity measures for its citizens in return.
According to the tenants of the bailout, Greece will be forced to reduce its budget deficit by more than 10 percent by the end of 2014, allowing the country to meet the EU deficit standard of 3 percent of the GDP.