German churches call for debt cancellation

Christian Century, Jan 27, 1999

Protestant and Roman Catholic churches in Germany have joined in the worldwide call for the cancellation of poor countries' debts. In a statement, "Foreign Debt: An Ethical Challenge," the Council of the Evangelical Church in Germany (EKD) and the Catholic Bishops' Conference also proposed conditions that need to be fulfilled if the foreign debts are to be deferred or canceled.

The German religious leaders argued that forcing poor countries to adopt so-called structural adjustment measures--reshaping their economies to finance their debt burden at the expense of social spending on health and education--is not an answer to the debt problem. Instead, debt relief must be aimed at fostering social and ecological improvements, the reduction of illiteracy rates and improvement in the education and health systems.

Constitutional and democratic reforms, reduction of corruption, slowing the flight of capital out of poor countries and restricting military spending are other criteria the religious leaders said should be used in assessing debt reduction proposals. "Debt-free countries which do not conduct any internal reforms will not have any credit rating on the international capital markets," the paper said. The joint statement recalled the jubilee ideal mentioned in the Old Testament, according to which debts were to be forgiven and land returned to its original owners every 49 years.