The document of the Pontifical Council for Justice and Peace is ponderously titled – «Towards reforming the international financial and monetary system in the context of global public authority» -  and its remarks were the most specific. The Pontifical Council for Justice and Peace calls for the advent of a new world centered on a universal political authority. The idea is not unprecedented – it was previously evoked in the 1963 encyclical Pacem in Terris of John XXIII. The document also proposed taxation measures on financial transactions (and suggested that revenues could contribute to the creation of a “world reserve fund” to support the economies of countries hit by crisis); forms of recapitalization of banks with public funds that make support conditional on “virtuous” behavior aimed at developing the real economy; more effective management of financial shadow markets that are largely uncontrolled today. Such moves would be designed to make the global economy more responsive to the needs of the person, and – the document says – less «subordinated to the interests of countries that effectively enjoy a position of economic and financial advantage».

The path to the document had been long and transparent. In May, after a media briefing with journalists to announce a conference about the Mater et Magistra, mons. Mario Toso, secretary of the Pontifical Council for Justice and Peace, announced the journalist that another media briefing was up to come, and it would have been about a future note for the reform of the monetary system. The Vatican Secretary of State was obviously informed. There had been several sketches of the document, as usual. The first sketch was drawn down by Michel Camdessus, former president of the International Monetary Fund, consultant of the Pontifical Council for Justice and Peace and  part of the French delegation at the last G20 meeting. Then, document passed through several hand, bankers like Antonio Fazio – former governor of the Bank of Italy – and Ignazio Musu – economist and part of the advisory board of the Bank of Italy. The document shields itself with many citations from previous social encyclicals, and actually there is nothing so new.

In the Caritas in Veritate there is also a paragraph – the so-called «world authority paragraph» – in which it is stated that

«in the face of the unrelenting growth of global interdependence, there is a trongly felt need, even in the midst of a global recession, for a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth. One also senses the urgent need to find innovative ways of implementing the Principle of the responsibility to protect and of giving poorer nations an effective voice in shared decision-making. This seems necessary in order to arrive at a political, juridical and economic order which can increase and give direction to international cooperation for the development of all peoples in solidarity. To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration: for all this, there is urgent need of a true world political authority. . . »

Even Caritas in veritate had been sketched by many hands. An encyclical is such an important text – it is addressed to all the men of good will, and it is inspiration and part of the diplomatic work of the Holy See – that everybody would like to stress it to its own part. Among the people that glossed the Caritas in veritate,  there were economist like Stefano Zamagni and Luigino Bruni, but also the then governor of the Bank of Italy Mario Draghi and the then Italian minister of Economy Giulio Tremonti. Even Ettore Gotti Tedeschi had been involved in “glossing” the encyclical. He was still not president of the IOR (Institute for Religious Works), but he was already sure that the economical collapse came from the lack of children. No children, no creativity, no hope for the future, no economy: this simple four-words-speech-scheme is the Gotti Tedeschi’s favorite one.

After the release of the encyclical, there had been a sort of split on how to consider Caritas in veritate. Laissez-faire theorists were critical about some economical analysis, but always underlined how good was the “make more sons” line. Social economy theorists loved more the part that evoked the tunes of Populorum Progressio, the Paul VI social encyclical, in which the Pope claimed that «the new name of peace is development». The fight of interpretations was – and still is – intense. Ettore Gotti Tedeschi was invited to talk to the meeting about Caritas in veritate without either informing  the Pontifical Council Justice and Peace. And the medias were in some way divided between these two lines of the encyclical, and were totally unaware that the truth is in the middle.

The most prophetical part of the encyclical was the so-called “world authority” paragraph. In fact, this has been interpreted by many Catholics a sort of “big leviathan”. But there is a deeper reason why the Holy See has been doing this proposal. And one can find these reason looking back in history to see when this world order had been stated. The Peace of Westphalia was a series of peace treaties signed between May and October of 1648 in Osnabrück and Münster. The treaties resulted from the big diplomatic congress, thereby initiating a new system of political order in central Europe, later called Westphalian sovereignty, based upon the concept of a sovereign state governed by a sovereign. In the event, the treaties’ regulations became integral to the constitutional law of the Holy Roman Empire. It was there that the Holy See began to the fight not to be ejected from the concert of nations. It was there that the Holy See became to be subjected to the secularizing process. An increasing lack of influence that brought the Vatican State to be attacked and then defeated by national States, and to sign agreements with the States – which are the various Concordats.

Peace of Westphalia is quoted in the last document released by the Pontifical Council for Justice and Peace, and it is not a case. In the last years, many have talked about a New World Order. This new world order had been theorized in several think-tanks all over the world – from the Trilateral Commission to Bildeberg Group – and in the mean time finance prevailed on policy. The new world order will be an economic-based one. This seems to be the time for the change to come. So, while the Holy See was going on in signing Concordats with the national States, the world governance got always more supranational. The scenario is similar to the one of the Peace of Westphalia times. Within the Holy See, many are aware of the risk for the Church – and religions as well – to be put aside. This is the sense of the call for common rules and a world authority with universal competences.

When the document of Pontifical Council for Justice and Peace had been released, there had been a slight disagreement within the Vatican Curia. Ettore Gotti Tedeschi, president of the IOR, complained to have not been even consulted during the preparation of the document. No consulation was the fact that when one then delves into the analyses and specific proposals, it is also stunning how strong the divergence is between what is written in the document of the pontifical council for justice and peace and what has been maintained for some time in the financial commentaries published in L’Osservatore Romano by Ettore Gotti Tedeschi. For example, not even one line in the document attributes the global economic and financial crisis to the collapse in the birth rate and to the resulting higher and higher costs of population aging.

 Gotti Tedeschi did not remain silent. On November 4  L’Osservatore Romano published an editorial by him that reads like a complete repudiation of the document of the Pontifical Council for justice and Peace. Gotti Tedeschi wrote that «the true origins of the collapse of birthrates and the consequences of the increase of taxes on the GDP to absorb the costs of the ageing of the population were wrongly interpreted. The effects of the decisions made to compensate for these phenomena were underestimated, especially with the de-localization of production and consumer debt». For the president of IOR,  «to deflate the total debt – public, banking, business and family – and bring it back to pre-crisis levels, that is, to around 40% less, it is possible, though not advisable, to cancel a part of the debt with a type of “preventive agreement,” where creditors are paid at 60%».

More. Someone inside the Roman Curia – sources whisper that it was Gotti Tedeschi himself, very active indeed (he also wrote down an article for the Italian magazine Tempi) – complained about the document with the cardinal Bertone, secretary of State. Medias report that Bertone complained to have not been even informed by document. It was not true, since he had been constantly kept informed of the document. And this is what he said, sources from inside the Curia report. Probably, the truth is in the middle: pressed by the vain discontents memeber of the Curia that were protesting, Bertone said that he knew about the document, not about his contents, and he managed a summit to solve the question. The news about a summit convened in the Secretariat of State on November, 4^th leaked to the press. The conclusion of the summit was that this binding order would be transmitted to all of the offices of the curia: from that point on, nothing in writing would be released unless it had been inspected and authorized by the Secretariat of State.

This is how the red alarm for the new document of the Pontifical Council for Justice and Peace has been defused. In the mean time, very few know about the international activities of the Holy See, and the financial transparency brought on with the establishment of the Authority for Financial Information can have some contraindication. The game is on the international impact of the Holy See. The same game the Pontifical Council for Justice and Peace played by asking for an World Authority with Universal Competences. Since the world is now globally ruled, the Holy See want to give is contribution to write common rules. In order these common rules will be for the common good of humanity, and not just for the good of few. Will this commitment be consumed in the bonfire of vanities?

The international scenario is not encouraging. The United States avoided the default thanks to the debt ceiling agreement, but the credit of the United States had been first downgraded by the Chinese rating agency  Dagong  and then downgraded by Standard&Poors. In the meantime, the Holy See is working intensely to outline a reform of the world monetary system.  In the encyclical Caritas in veritate there were several points remarking it. One above all, the so-called world political authority paragraph. There is the need of a true world political authority – the Pope wrote – «in order to arrive at a political, juridical and economic order which can increase and give direction to international cooperation for the development of all peoples in solidarity. To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration».

A new monetary system could not prescind from a global authority, an authority – an official to the Holy See explains – that «needs to have universal competences and needs to be public». The next G20 – scheduled in Cannes for November, 3-4 – will be on financial markets and world economy. It will be the occasion, for the Holy See, to present his proposal to reform the international monetary system. A first sketch of the reform – now under the examination of Holy See consultants and officials – had been proposed by Michel Camdessus, former president of International Monetary Fund. Camdessus is a consultant of the Holy See, but it will also be a member of the French delegation at G20. France is also the hosting country of the summit. For this reason, there is the opportunity that the proposals of the Holy See will  be at least taken in serious consideration.

Facing the global crisis, many countries began thinking about a reform of the monetary system. Nicolas Sarkozy, president of France, talked about enlarging the G7 to better manage currency markets, expand the International Monetary Fund’s oversight capacity in the field, and to the IMF’s currency basket, Special Drawing Right (SDR),the currencies of emerging economies, like the Chinese yuan. «France supports modifying the IMF’s status to expand its oversight capacity», Sarkozy he noted. This can counter what the president of France views as a «proliferation of unilateral measures during crises resulting in a new financial protectionism in which all economies suffer».

The Holy See will make different proposal. The Vatican diplomacy expressed several times doubts about G20 and the international congresses of that kind, considered something more than a club of friends, with no executive power. Holy See asked for a World Government, since it knows that there is the need of an authority over the State sovereignty and with the goal of the common good. The proposal will be different even from the Camdessus first sketch. Camdessus position is more similar to French one. France – and many other countries, as well – think to a world currency in order to have a concrete currency to refer to. Since the dollar is not convertible in gold, it has no real reference in the economy. The solution the G20 is up to give can be just the one of a financial adjustments decided among the few that will met in Cannes. This – according to Holy See position – is not sufficient. In 2009, the Holy See asked the Doha round to be enlarged to the opinions of the excluded countries. This is still the Holy See position. The reform of the monetary system pass through the reform of the United Nations and the reform of International Monetary Fund. The true fight is between the world leaders that still think that the world order could be managed in restricted meeting and the ones that aim at a true multilateral policy. Camdessus first sketch was going toward the first position. Holy See is going in another direction, and its polar star is the common good of peoples.

It was the common good the goal of the delegation that gathered at Mount Washington Hotel, in Bretton Woods, New Hampshire, in 1944. Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied deliberated to abandon the Gold Standard – the monetary system based on the convertibility of all the currencies in gold – and to embrace a more appropriate system for capitalism. In fact, the new international monetary system was a return to a system similar to the pre-war gold standard, only using US dollars as the world’s new reserve currency until the world’s gold supply could be reallocated via international trade.

Two projects of a new monetary system had been discussed in Bretton Woods. The first project was by the English economist John Maynard Keynes. Keynes outlined the institution of a Central World Bank, in order to intervene on the markets to regulate the relationships between debtors and creditors. The bank was supposed to have its own currency, that Keynes called Bancor. The second project was by Harry Dexter White, under-secretary of the Us  Ministry of the Treasure, and outlined a simple leveling-off fund of tax exchanges. The result was a compromise: the economic policies of the State would be coordinated by the International Monetary Fund and from the World Bank; the dollar become the only currency convertible in gold, so having a central role in the economical system.

But Europe – and in particular Germany – lived an incredible economical growth. Always more creditors asked to convert their dollars in gold. In 1971, the Us president Richard Nixon unilaterally suspended the convertibility of Us dollars in gold. It was the end of Bretton Woods. It was the beginning of a variable economy world. The yellow gold was up to be substitute by the black gold, the oil – during the Seventies the oil crisis became a central topic of financial issues.

Here and then, the idea of a world currency letted out from the think-rooms of the Council on Foreign Relations, of Trilateral commission – a group founded by David Rockfeller in 1973, whose member are, or has been, Henry Kissinger, Zygmunt Brzezinsky, George Bush sr., Dick Cheney -, and of Bildeberg Group. In 1988, The Economist – an English magazine read with much attention even in the Vatican Secretariat of State – launched the idea of a world currency named Phoenix. The International Monetary Fund created in 1969 the “embryo” of a new kind of currency, the Special Drawing Rights (SDR). SDRs are not credits the State have with the International Monetary Fund. The State, on the other hand, can sell SDRs, so sustaining their own currency. The world currency auspicated by president Sarkozy would be, in some way, and evolution of SDRs. Something similar to the “bubble that will save us” outlined a couple years ago by Ettore Gotti Tedeschi, president of the I.O.R. (Institute for Religious Works, the “bank” of the Vatican), in an article on the Holy See’s daily Osservatore Romano. Something similar to what the Trilateral Commission outlined in 1989 in a report titled: “International Financial Integration: the Policy Challenges”.

The Holy See looks beyond, conscious that nowadays international finance is made up of fictitious capital. The Holy See aims to re-anchor the international monetary system to the real economy. In fact – officials of the Roman Curia underline – it was not globalization to let multinational groups and private interests take the control of global economy. It was the States to abdicate part of their sovereignty in the name of profit, and now they are stuck in the system.

In the mean time, China downgraded the United States financial rating, and this caused the fall of Western stock exchanges. Until now, China has always been marginalized by the Western economic world. But now its economy has so flourished to let the China “fire” all European and American bonds without consequences in their internal balance. China is now claiming for more weight in the international issues. Somebody is wondering – it is just an attractive hypothesis – if it was the Chinese offence for having been marginalized in the international scenario at the origin of the exacerbation of the Chinese diplomatic relationship with the Holy See.

The Holy See have a great International prestige. Neverthless the See Change campaign, the Holy See is Un Permanent Observer with reinforced powers. Every time the permanent observer speaks during the general assembly, even the sleepiest among the delegates pay much attention to the Holy See Statements. Holy See is now one of the few – if not the only one – asking for a really multilateral international policy. And it was one of the first to preview the fall of the false gods.