Holy See Calls for End to Vulture Funds
Stresses Social Consequences of Economic Decisions
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VATICAN CITY, JUNE 8, 2010 (Zenit.org).- The Holy See is urging the international community to end speculation with vulture funds, by which heavily indebted developing countries are being exploited.
Archbishop Silvano Tomasi, the Holy See's permanent observer at the U.N. offices in Geneva, Switzerland, made this appeal at a June 2 session of the Human Rights Council.
In a subsequent interview with Vatican Radio, he explained more about these "funds or investments that take the name of this bird that eats away the bones of the carrion of other animals or attacks when an animal is about to die."
This name was chosen, the prelate said, for these "speculative funds that acquire at a low price the debt of developing countries to public or private creditors, but especially to the State."
"The company that buys the debt at a very reduced price," he continued, then "goes to ask the debtor country, in a completely legal way, to reimburse the initial credit, increasing the exigency and also asking for interest, so that the initial cost greatly increases."
"When the country cannot pay, especially developing countries in Africa, these 'vulture funds' try to get the money coming from public financial backers or from any primary resource of the country, such as oil or other raw materials, not only to recuperate the initial expense but also so as to make great profits at the expense of these countries," the archbishop noted.
In this context, he said, the Holy See appeals for the elimination of this type of speculation "because it is to the detriment of poorer countries, which, instead, have the right to have what is necessary for their people and to undertake their development."
In other words, "the economy has social consequences" that must be "taken into consideration" and to which "priority must be given because, in the end, the common good we are seeking, the good of persons is above mechanisms of profit," Archbishop Tomasi asserted.
"We uphold the principle that debts must be paid, but at the same time it is also said that peoples have the right to survive," added the prelate, affirming that "the exercise of fundamental human rights must be guaranteed."
Hence, he said, debt "must not become a form of oppression, blocking development and survival."
Formulas must be found to encourage the debtor countries to "avoid the lack of transparent management, to avoid corruption, to avoid unsuccessful planning," the archbishop pointed out and to urge the rich countries "to condone these debts whenever possible, in order to guarantee a new recovery for these countries."