The Vatican’s push for debt relief for developing nations faces serious challenges following the death of Pope Francis and major cuts in international aid, particularly from the United States.
The Vatican’s “Jubilee Commission,” a group of financial and policy experts led by Nobel laureate Joseph Stiglitz, unveiled a draft of its plan for equitable debt solutions at last week’s IMF and World Bank spring meetings. But global focus has shifted, with development funding discussions sidelined amid rising defense budgets and protectionist economic policies.
U.S. Treasury Secretary Scott Bessent said Washington has not committed to fulfilling its $4-billion pledge to the International Development Association (IDA), the World Bank’s lending arm for the poorest nations. Aid cutbacks from the UK, Germany, and France are also expected to deepen.
Adding to the pressure, Pope Francis’ death delayed the formal submission of the Jubilee Commission’s proposals to the Vatican, originally scheduled for May 16. A new pope will be selected during a conclave beginning May 7.
Stiglitz warned that current economic conditions—including U.S. tariffs under President Trump and spiking bond yields—could spark a new wave of debt defaults. JPMorgan echoed the concern, saying a new default cycle is possible by next year.
Experts say developing nations now face impossible choices between repaying debt and supporting public services. The World Bank reports 59 countries are at or near debt distress, with some—including Colombia, Indonesia, and Senegal—already resorting to austerity to avoid collapse.
While the Jubilee Commission continues its work, the outlook is bleak. The last Jubilee effort in 2000 led to historic debt forgiveness, but today’s fragmented creditor landscape, including China’s shifting lending strategy, complicates the process.
Global economic slowing, coupled with falling aid and rising borrowing costs, threaten to derail development across much of the Global South. S&P Global Ratings forecasts more frequent defaults over the next decade as debt service eats into funds for health, education, and infrastructure.
“Sixty percent of growth is coming from the developing world,” said Vera Songwe, who co-chairs the Vatican-linked Liquidity and Sustainability Facility. “If that slows, the entire world feels it.”
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