Pope Francis staged a surprise visit to admonish the International Monetary Fund chief and several finance ministers to help alleviate the debt burden of struggling countries, calling for “a new financial architecture” to ensure social justice.
Francis attended a Vatican conference on the global economy on Wednesday whose participants included IMF Managing Director Kristalina Georgieva and Finance Ministers Bruno Le Maire of France and Martin Guzman of Argentina.
“We have to help developing countries to achieve debt sustainability, through coordinated policies which should finance debt and reschedule debt, in order to find a solution for the very indebted countries and to alleviate the suffering of people,” Francis said.
“You have to remember your responsibility to aid the poorest countries.” The pope also urged the officials in the audience to tackle climate change “because we shouldn’t destroy the roots of our common house.“
Francis has made countering global inequality and climate change cornerstones of his papacy. He told a Vatican conference of business chiefs from leading oil and gas companies and global investors in June to tackle “a radical energy transition to save our common home.”
Speaking before the pope’s remarks, Argentina’s Guzman said that his country will seek more time to repay the record US$ 56 billion credit line it obtained from the IMF. Guzman said he was cooperating with Georgieva to resolve the country’s debt crisis.
In her speech at Wednesday’s conference, Georgieva called for countries to act on global warming, saying the “best way forward is to put a price on carbon.”
The IMF is pushing harder to address climate risk to the global economy by assisting with research efforts and offering policy advice. Georgieva’s comments echo the fund’s call in October that climate change demands government action, and that countries must immediately adopt carbon pricing to keep global warming under 2 degrees Celsius.
Georgieva said that Chile, Colombia, and South Africa recently implemented carbon taxes, and China is about to launch an emissions trading system.
“These initiatives will encourage households and firms to use less energy and shift to cleaner fuels,” she said.
Georgieva said while greater investment in coastal protection and more resilient infrastructure and agriculture are welcome, much more is needed to directly cut emissions.
“The good news is that green bonds, impact investing, and many other forms of sustainable finance are growing fast,” she said. “But this is not nearly enough. The private sector can do more, and I believe it will in the days ahead. Why? Because the price of inaction is too high.”