Catholic Church Finally Decides That Austerity is Bad


It’s been slow in coming, but religious leaders are starting to speak out against the mechanisms and high social cost of austerity. One dramatic but ineffective effort was when the Archbishop of Cyprus offered to contribute all the church land in Cyprus to a rescue package. He also urged Cyprus to exit the eurozone:

Archbishop Chrysostomos II of Cyprus said his country should withdraw from the European Union as the EU will fall apart and cease to exist in the future.
“The economies of Spain, Portugal and Italy are currently in danger. And if the economy of Italy is destroyed just like our economy, the EU will not withstand,” Archbishop Chrysostomos said in an interview with Russia’s Channel One television channel.

“People who rule the European Union, and particularly those making decisions in the so-called troika, do not understand many things and it leads to the collapse of the EU. This is why I believe we [Cyprus] should withdraw from the union before the collapse takes place,” he added.

On May Day, the new pope called for less austerity and more jobs. From the New York Times via Daily Kos:

I think of how many, and not just young people, are unemployed, many times due to a purely economic conception of society, which seeks selfish profit, beyond the parameters of social justice,” the pope said. “I wish to extend an invitation to solidarity to everyone, and I would like to encourage those in public office to make every effort to give new impetus to employment.

A much starker depiction of what is at stake came today in the Telegraph, when Ambrose Evans-Pritchard wrote up an interview with the Archbishop of Toledo. The prelate discussed not only the severity of individual suffering, but more important, the cracks in the social order. This is a much bigger danger, and one that the Troika seems to treat far too casually. Greece has been broken on the rack and is in the process of becoming a failed state. Ireland escaped a similar fate by having a disproportionately large export sector (over 100% of GDP) which meant deflating early was tantamount to a currency devaluation. Even so, large-scale emigration has also helped reduce the level of official unemployment.

Spain is going down the Greece path, and having such a large country unravel socially and politically is likely to have bigger, if not readily foreseen, consequences. Unemployment around Toledo is 31%, 4 points over the national average, and youth unemployment is a mind-numbing 64%. Distress is widespread:

Europe’s Catholic bishops know first-hand from their Cor Unum charitable network just how desperate it has become. “We can try to mitigate the effects by giving basic help to people left totally unprotected, but we can’t create jobs,” said the Archbishop.

“We are seeing families who used to middle class needing help. This is totally new. As a matter of honour, they won’t come to us until they have exhausted everything.”…

Marisa Martinez, the volunteer director of Caritas in Toledo, said the Catholic charity is now helping 40,000 people in a province of 700,000, often with bags of food. Each family receives 12 kilos a month, mostly beans, oil, milk, and pasta. “We pass on whatever we get in donations. It is all done quietly to protect the dignity of the families. They take the food away and cook it at home,” she said.

Spanish bourgeois pride works to the government’s advantage, since people have to be willing to admit to their desperation in order to figure out how to work together to alleviate it. Even so, some commentators seem to think there’s a riptide beneath the resigned surface:

El Mundo fears a slow-fermenting ‘crisis of the regime’, with almost every institution — including the monarchy — in disrepute. It likens the mood to “pre-revolutionary” France in the late 1780s.

The Archbishop, speaking in the austere episcopal palace of Spain’s ancient capital, said the current crisis is doing far more damage than the recession in the mid-1990s when unemployment briefly spiked above 24pc. On that occasion peseta devaluations let Spain regain competitiveness and recover gradually despite austerity cuts.

This time the country seems trapped in slump. The long-term jobless rate is much higher. Unemployment benefits taper off after six months, and stop after two years. There are almost two million households where no family member has a job.

Catholic leaders are pushing for change in an effort spearheaded by the “firebrand” cardinal Reinhard Marx of Munich. Criticism from the church may be harder to brush off than that of politicians.

Nevertheless, so far, the objections are carefully worded and mild in comparison to the level of distress. In advanced economies, except for pet issues like abortion, the Catholic Church has steered clear of politics. It’s not clear that mere finger wagging would do, and this Church lacks the appetite to encourage protests. But its leaders do have media access. Given that there is now a rift among Eurozone leaders as to whether it is necessary to ease up on budget-trimming and focus more on growth, they might be able to provide more visceral images and stories of the long-term costs of putting budget targets over vulnerable social orders. But orthodox economic views are so deeply entrenched that having Catholic leaders speak out is likely to be too little, too late. And sadly, they seem to be the only prominent figures who can invoke the language of morality and justice against a cruel and destructive economic calculus.

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