CONFERENCE OF EUROPEAN CHURCHES
CONFERENCE DES EGLISES EUROPEENNES
KONFERENZ EUROPAEISCHER KIRCHEN
European Social Market Economy -
an alternative model for globalisation?
A discussion paper
the North-South Working Group
of the Church and Society Commission
of the Conference of European
This paper is based on one originally prepared as a background paper for the Consultation
organised at Soesterberg in the Netherlands in June 2002 by the World Council of Churches
(WCC), the World Alliance of Reformed Churches (WARC), the Lutheran World Federation
(LWF), the Conference of European Churches (CEC) and the Council of Churches in the
Netherlands. It was part of a series of regional consultations being organised as part of
global processes on economic justice and globalisation by the WCC, WARC and LWF. Since
the Consultation the paper has been revised and restructured but its main content and
conclusions remain the same.
It has been the intention of the CEC North-South working group to contribute a view of
European Churches to the ongoing ecumenical discussion about globalisation. Globalisation
has many aspects and facets – political and cultural, relating to power and values. The paper
does not claim to cover all of them. Certainly it does not reflect adequately the anger and
frustration of many throughout the world, but especially in the global South, about their
inability to influence decisions deeply affecting their lives. They include those who believe
that one impact of globalisation is to devalues faith and to limit their ability to choose a
lifestyle based on faith.
The paper concentrates mainly on two questions: What effects does globalisation have on
Europe and what does the European experience bring to a world facing globalisation. Europe
is one area in the world where several economic systems operated side by side during a large
part of the 20th Century. Europeans saw how a centrally controlled economic system reduces
political freedom and democracy. They also saw that a free market system which operates
without effective and democratic mechanisms for ensuring social and environmental
objectives gives rise to immense injustices.
This paper does not represent the opinion of the European Churches or of all CEC member
churches on globalisation. But with respect to the history of economic models in Europe it
tries to highlight some specific European concerns about globalisation in the light of
Christian faith. It can serve as a basis for dialogue with ecumenical and church partners and
with the political institutions.
It is meant to stimulate the discussion about globalisation within the CEC member churches
and add a specific European point of view to the ongoing ecumenical debate. The authors felt
that the European models of social market economies are very often overlooked in the search
for alternatives for a neo-liberal globalisation and that this element should be added to the
This is the basis on which the Executive Committee of CEC’s Church and Society Commission
has asked that the paper should be made available for comment by the member churches,
partners and political institutions. Comments should be addressed to:
Church and Society Commission, Conference of European Churches, Rue Joseph II 174, B-
1000 Bruxelles (e-mail email@example.com)
Keith Jenkins, Director September 2002
Members of the North-South working group: Others who have contributed to the paper:
Eberhard Hitzler Rob van Drimmelen (APRODEV)
Lawfort Imunde Doris Peschke (CCME)
Pauliina Kainulainen Keith Jenkins (Director, CEC Church and
Steward Lamont (Secretary) Society Commission
Jennifer Potter (Moderator)
European Social Market Economy - an alternative model for globalisation?
1. Christian Values as a Basis for evaluating Globalisation *
2. Globalisation *
2.1 Definition of Globalisation *
2.2 Perceptions and Dynamics. *
2.3 Globalisation and its Effects on Europe *
2.4 Globalisation and Migration *
2.5 Globalisation and its Effects on Churches in Europe *
3. European Experiences and Visions *
3.1 Statements of the European Union *
3.2 Statement of European Churches *
3.3 European Social Market Systems *
4. Major Challenges for Europe and the Churches in Europe *
4.1 Ethical Orientation *
4.2 Preservation and Renewal of the Social Market System *
4.3 Reorientation and Regulation of the Capital Market *
4.4 Commitment for Sustainable Development *
4.5 Strengthen European Global Responsibility *
4.6 Review Immigration Policies *
5. Conclusion *
1. Christian Values as a Basis for evaluating Globalisation
A value judgement on globalisation from a Christian perspective requires a statement of
ethical foundations and values on which it is based. Globalisation is a secularised term for that
which encompasses the world, which in the Christian view of the world is expressed with the
Greek term "oikos" : the world as the common house, the House of God. "oikos" has three
• Economy as the responsible husbandry in production and the fair distribution of
• Ecology as the responsible use, maintenance and renewal of the natural
foundations of life;
• Oecumene as the responsible community of people and peoples with different
religions and cultures. This expresses a basically positive attitude of the
Christian faith towards the overall view of this planet as "One World".
Globalisation as living in One World is positive only on condition that the following basic
human values, intrinsic to Christianity, are respected:
• Dignity: A life in dignity for all is the Christian vision, based in God’s promise to care
for all, including the weakest.
• Justice: The just distribution of wealth and the just sharing of resources
• Freedom: Not as the right of the strongest but as the freedom of all to participate
in shaping their own life, community and society.
• Peace: The ability to solve conflicts without violence and to create international
communities on this basis.
• Sustainability: One world has to include not only humankind but all non-human
beings. The whole creation expresses the grace of God. Sustainability also
means keeping faith with future generations.
• Responsibility: The world cannot be divided into powerful and powerless
people. Sharing power among people, regions and nations and using power in a
responsible way is a condition for globalisation to bear good fruit.
• Solidarity : Recognising that all are all part of the same body – society - and
share the same human dignity, it is necessary to balance the resources of
creation and wealth derived from using them for the sake of healthy, peaceful
• Subsidiarity : Calls for society to facilitate and foster the ability of individuals
and small communities to have the freedom and self reliance to develop in their
Despite the brokenness of human existence a person called by God is - through creation and
redemption - enabled to influence positively the affairs of the world. This ability precedes any
duty. The ethical demand stems from the God- given ability to act reasonably and responsibly.
Such a gift and such encouragement are particularly important in the present situation of
Christian love for neighbour is primarily directed to the poor, the weak and the
disadvantaged. The option for the poor becomes a benchmark for action. The experience of
liberation from bondage which testifies to God's preferential option for his poor, enslaved
people was a recurrent theme in the ethics of the people of Israel and a central argument
backing the demand for justice in dealings with the weakest members of society. The right of
the poor is grounded in the memory of the rescue from slavery. It is also a cornerstone of the
teaching of Jesus in the Gospels through parables and by example.
The unity of love for God and our neighbour takes concrete form when the preferential
option for the poor becomes a leitmotiv for social action. Thus from the standpoint of a
Christian ethic, all social, political and economic action and decision-making should be
judged by the extent to which it concerns, benefits and empowers the poor. The biblical
option for the poor is aimed at overcoming exclusion and involving everyone in the life of
The concept of justice is a key concept in biblical tradition and in church social ethics. In the
Bible it is connected with peace, freedom, redemption, grace and salvation. In older
philosophical and theological discussion the idea of justice has been interpreted as a
fundamental principle of social order. It states that everyone has their own right to be
recognised as a person and to lead a life worth living. This right of each individual is to be
respected by all others and by the whole of society; conversely, everyone has to respect the
rights of others and of the whole of society. Only such justice can safeguard peace in society
and the world.
Structures have therefore to be created which will allow individuals to participate responsibly
in social and economic life. Besides the right to political participation, these include access to
work and employment, enabling a life in dignity comparable with that of the majority of the
population, and an effective contribution to the common good. In order for people to
participate and to have the opportunity to be heard and understood in the formation of public
opinion, an educational system is needed that develops not only vocational skills but also
political discernment and a capacity for political involvement.
With respect to these values, globalisation therefore has two faces:
• Globalisation has a positive face if it involves an attempt to understand the world as
One Mankind and One Ecosystem and their interdependence, and to make it fertile
for a dignified life for everyone with reduction of poverty, increase of peace, more
sustainability and a fair share for everyone.
• Globalisation has a negative face if it involves an attempt to reduce the world's
multiplicity to one standardised economic, cultural and political model, which
is created by only a few agents, which increases poverty and conflicts,
destroys even more the environment and in which the economy has priority
over any other sphere of life.
2.1 Definition of Globalisation
The term globalisation became popular since the beginning of the 1990ies. We describe
globalisation as an ongoing global process with the following characteristics:
• global economic integration,
• liberalisation of markets,
• growth of global trade faster than production,
• fast-growing global capital markets,
• fast growth of telecommunication and transport technologies and facilities,
2.2 Perceptions and Dynamics.
Globalisation is a word associated with the hopes and fears of people in all continents. It is
noticeable that those who have an influence on global activities are typically positive, even
enthus iastic, while among those who feel powerless and dependent – probably the majority –
fears prevail. On a superficial level, globalisation means worldwide economic integration.
Due to political decisions and international agreements and to technical progress in transport
and communication, regions, states and continents have become ever more closely
There are historical reasons for the dramatic acceleration of political and economic integration
after 1990, leading to a qualitative leap in the process of internationalisation and consequently
to the globalisation of economic developments.
1. With the breakdown of the Eastern European political system, a change set in from a
politically defined contest of systems to an economically defined competition of
locations, involving nearly all existing states, including regions and cities. They must
now intensify their efforts to attract capital, as the market has become so much more
volatile after the lifting of restrictions on capital movement dur ing the eighties. As a
result, their negotiating position in relation to international capital owners was
considerably weakened. Since the end of the old bi-polar system we furthermore
observe the growth of new polarities between ideologies, religions and cultures.
2. Rapid advances in computer and information technology have enabled new,
globally interlinked production techniques and logistics to develop. With
financial transactions and price comparisons feasible within seconds, the
pressure to cut costs has dramatically increased.
What began as international economic policy has rapidly had profound political, social and
cultural repercussions. The liberalisation of trade, investments and the capital markets has led
to the emergence of international or trans-national relations and interdependencies of
unprecedented dimensions. For example, the Asian "tigers" have succeeded by their own
dynamism in fitting into the global market and in achieving unprecedented growth rates. On
the other hand, the serious financ ial crisis in East Asia in 1997 also spread to Russia and
Brazil, illustrating growing economic interdependence.
While some developing countries have been able to attract investments, others have been
completely by-passed. This applies especially to African countries south of the Sahara.
Although many of them have long been integrated into the world market through their exports
of raw materials, they have witnessed continual falls in commodity prices. At the same time,
these countries were forced to liberalise and deregulate their markets in the context of
structural adjustment policies which were required in highly indebted countries by the
International Monetary Fund (IMF). As a consequence, their own local, non-competitive
producers have had to yield to cheaper imports. Often these imports consisted of goods which
were subsidised by Northern governments and "dumped" on Southern countries. Agricultural
exports from the European Union are a case in point. In countries able to profit more from
globalisation, progress has often been concentrated on certain areas and economic sectors of
the country, yet specific regions and sectors can participate in it without this leading to
country-wide prosperity. In this context we observe an increasing exclusion of countries and
of large parts of the population in developing countries as well as in industrialised countries
who are not regarded as "economically productive".
Compared to the production of goods and consequent trade, recent years have seen a greater
increase in international capital movements. Liberalism is most advanced on the international
finance markets. What was first intended to alleviate or enable international trade and foreign
direct investments has largely become autonomous. Every day on which the stock exchanges
are open for business, over 1.5 trillion US dollars are sent around the globe. This corresponds
to an annual turnover of 300 trillion US dollars. Real economy financial flows, i.e. trade and
investments not related to speculative movements amount, however, to just 2.5% of this
Increasing trade liberalisation has led to growth in international trade with a simultaneous
drop in transport and communication costs. The global exports of goods and services have
almost tripled since the 1970s. Global markets have arisen for services in banking, insurance
and transportation. However, developing countries object that in fields in which they have
comparative advantages, the industrialised countries have liberalised trade insufficiently.
Agriculture is a case in point. In OECD countries farming is state-subsidised with
contributions that together exceed the gross domestic product (GDP) of the whole of Africa.
Liberalisation has led to a steep rise in foreign direct investments. The deregulation of cartel
law has led to a flood of mergers and takeovers. Of the over 800 billion US dollars in foreign
investments in 1999 (400 billion in 1997), 636 billion went to industrialised countries. The
money invested in developing countries was concentrated basically on 20 countries.
Continuing economic globalisation has led to very different consequences, not least because
political globalisation is lagging behind. We observe that the economic globalisation has
weakened national governments and increased significance of multilateral institutions.
Many people have been able to benefit from the changes while for many others conditions of
life have deteriorated. This is the case also within Europe. Europe, as one of the strong
economic powers, is among the driving forces of economic globalisation and has gained
substantially from it. But at the same time, globalisation has had various negative effects on
2.3 Globalisation and its Effects on Europe
We observe that the global neoliberal economic system creates in Europe and elsewhere a
climate of decreasing solidarity. The traditional social market economies in Europe are based
on economic freedom balanced with solidarity and social responsibility. As the European
economy has to be competitive in an open world market, this system, and thereby its basic
principles, come under pressure. We consider this to be the major challenge of economic
globalisation since solidarity and justice are at the heart of any biblical and Christian ethic.
We watch this development with concern as solidarity and justice continue to be violated
Persistent mass unemployment in Europe mainly caused by technological progress, cheaper
means of transport and a global free market system is dangerously volatile. Without
overcoming mass unemployment there will be no reliable consolidation of the welfare state.
The high unemployment figures mean loss of social insurance revenue and high outlay in
unemployment and social welfare benefit. So it is unemployment that is too expensive, not the
Addressing the high unemployment rate in many European countries is a prerequisite for the
stability of social market economy. Despite the steady growth of the global economy
unemployment has not been reduced. This also applies to the OECD states. With an average
growth rate of 2.3% of GDP in the last 20 years unemployment in the OECD states has been
at an almost constant 7%. The concentration of income, and thereby social disparity and
poverty, has increased globally between countries and within countries, also within Europe.
Increases in goods and traffic flows are leading to growing strains on the environment. Since
the low transport costs only concern energy prices but externalise environmental costs short-
term gains are bought at the price of long-term environmental damage. A beneficiary of
globalisation is also international crime. Through the insufficient control mechanisms new
opportunities arise for drug and human trafficking, money laundering and illegal arms deals.
There are different views on the way in which cultures are growing closer. On the one hand,
influences from other ways of life are seen as enriching while, on the other, there is fear of
cultural dominance. The revolution in communication technology has created a new form of
illiteracy and exclusion because many people have access neither to the internet nor
computers. Equality of opportunity only exists on the globalised market for those who can
meet certain minimum requirements. This creates a gap also within Europe and within
Within European countries there are winners and losers of globalisation. It is clear that highly
qualified workers, when they are sufficiently mobile, are among the winners. They can choose
where they want to work. Likewise some trans-national companies (TNCs) can achieve
enormous profit rises. Through internationalising their production they can cut production
costs; and through trade deregulation, open up new outlet markets. This has put pressure not
just on southern companies. Pressure of competition has increased on seasoned northern
companies who were less lucky when going global.
We observe that in Europe globalisation jeopardises the ability of the welfare states to retain a
high level of social security. Without doubt, globalisation based on an ideology of a free
market system is posing challenges for the welfare state, but it is not automatically leading to
cutbacks. How a society deals with poverty and unemployment, with disability and
disadvantage, with winners and losers, will continue to be decided in the national as well as in
the international context. The changes in the world of work, the further changing and
individualising of careers, the immigration of people from other cultures - all this make it
necessary to review available instruments and, if necessary, to restructure them.
As Europe and the United States both continue to protect their own markets and restrict
market access by various political means, the development opportunities of poor countries are
still being hampered by this protectionism.
The stock markets in Europe gain more importance, as more and more people buy stocks.
Priority for shareholders implies that those who want to earn from a company get priority
over those who work in a company. This represents a very important paradigm shift, with
major ramifications for society. Companies are no longer primarily valued for the
products/services they produce, but increasingly, if not exclusively, for the "value they create"
for shareholders. The future of companies, including the interests of the other stakeholders, is
increasingly determined by the erratic and unpredictable behaviour of the stock market. There
is increased emphasis by management on short term positive results. Long-term perspectives
which would include the work satisfaction, social benefit and work security of the companies
employees as important positive economic factors are rather neglected.
Growth, and the ability to compete internationally, have become the major yardsticks for
success. This may take the form of a company increasing its own turnover, but also by taking
over other companies. People are more seen as customers and consumers than as citizens.
New marketing strategies are increasingly based on the creation of needs. Penetrating deeply
in the minds of potential consumers, focusing on new markets such as the young (who are
made to believe that this is what they need). To a certain extent, this phenomenon is as old as
business. The difference is the much more systematic approach and far reaching effect on the
consumption pattern as the consumption level is increasingly rising.
2.4 Globalisation and Migration
Globalisation and migration represent two of the most dynamic global socio-political trends
of our present time. While both have their own driving dynamic, they are highly interrelated.
Globalisation has an ambivalent and somehow contradictory influence on the current
migratory flows. On the one hand it creates situations and conditions which increase the
pressure and intensify the desire to migrate:
• Growing economic inequalities, extreme poverty, the breakdown of national
economies, the decline of traditional industry, environmental degradation, revival of
tribal, ethnic, and religious fundamentalism, conflicts and wars, to name only a few of
the direct or indirect results of globalisation, contribute towards migration understood
as a «survival strategy». A considerable number of the estimated 150 million people
working outside their countries of origin have been forced into migration by the
economic consequences of the globalised economy.
• The revolution in communication; the easiness and low cost of information flow
and geographical movement of persons; the daily projection of prosperity and
affluence pictures at a global scale; the cultivation through the mass media of
the illusion of an increased familiarity with the North and accessibility of the
Western way and quality of life to everyone living in the Western countries
intensify the desire of participation – particularly among those who, for political
or economic reasons, lived up to now isolated and deprived - and constitute a
great temptation and an urge towards taking over the risk to migrate.
• The functioning of a national economy increasingly depends on the fast
availability of a (small) number of high-skilled migrants and a higher number of
migrants belonging to the pool of low-paid workers (often undocumented
workers constituting a cheap and flexible but also vulnerable labour force). The
capacity to manage and steer migration movements towards a country has thus
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become an important element of the global competitiveness for a global
• In addition, the demographic developments in most Northern industrialised
countries will pose enormous challenges to the societies. A far greater
percentage of the population will be part of the older generation with more
demands on the social and health services. At the same time, most of these
societies will decrease in numbers dramatically over the next years. While most
of the related problems require structural responses, they will also require active
migration policies. A number of countries, among them major European states,
have already started active recruiting policies.
On the other hand globalisation constitutes a restraining force, counteracting migration:
• Globalisation prioritises the importance of capital and downgrades significantly the
role and relative power of the labour in the globalised economy. Particularly in the
developed economies of the North since the early 70’s the value of the unskilled
labour force has dramatically decreased resulting in an official brake on immigration.
The EU countries decided to apply –even though unsuccessfully- a policy of «zero
migration», imposing continuously new and additional controls, restrictions and
barriers to the entry of migrants originating from the so called «third countries».
• The downgrading of the significance of the factor «labour» partially explains also
the fact that powerful governments and International Governmental
Organisations like WTO and IMF, while undertaking intensive efforts to
achieve freedom of movement of goods and capital, show a limited interest in
promoting the free movement of persons. Free movement is often restricted to
the "global elite".
• In parallel, TNCs transferring their economic activities where labour is cheap,
flexible and unregulated, environmental protection minimal and taxes very low,
contribute indirectly in counteracting migration. However recent surveys show
that this trend is far less important than originally anticipated.
In the context of the globalising markets, the global, fast and flexible movement of labour (a
small percentage of highly skilled workers as well as a big number of cheap often
undocumented workers) becomes an important key element of successful economic
development. Labour migrants could thus be key players in the process towards a globalising
economy – both as those largely profiting from and setting the agenda of globalisation as well
as potential objects and victims of globalisation processes.
• In this area, restrictive policies operated within the EU prove ineffective from the
moment that there is a demand for cheap and flexible labour. The proof of this is the
formal and informal employment of tho usands of seasonal workers in the European
• It is noteworthy that a whole global industry has developed around migration.
This industry includes both those activities related to the trafficking of human
beings (creating alarming new structures of slavery through forced labour and
debt enslavement) as well as the provision of "services" of smuggling human
beings to those seeking to migrate. Revenues in this area are extremely high and
exploitation of those concerned fierce. Given the initiative of most government
in immigration countries to further limit the possibilities for legal entry into
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their countries, it is foreseeable that the migration industry will continue to
boom and the levels of exploitation connected with it become more fierce.
Some other considerations on the important link between globalisation and migration:
• The countries of the South of Europe, as well as the countries of Central and Eastern
Europe, candidates to join the EU, constituting the external borders of the EU have
turned into "control points" and "Waiting Rooms" for would be immigrants to the
"core" countries of the EU.
• The money sent home by migrants is an important economic contribution to the
national economy of many countries of the South. For such countries this is one
of the most important sources of foreign currency earnings. In many cases,
these transfers help to create an unofficial social security system: The World
Bank estimates that remittances by migrant workers amount to 65 billion USD
per year. The national economy of Turkey for example annually receives
around 3 billion USD from remittances of migrant workers, compared to 1.5
Billion in official development assistance.
2.5 Globalisation and its Effects on Churches in Europe
European churches have been deeply concerned in this topic in recent years. The declaration
of the consultation on the effects of Globalisation on Central and Eastern Europe in Budapest
in June 2001, is but one aspect of church voices on the topic with regard to the situation in
Central and Eastern Europe. However, Globalisation also has a profound effect on
communities and churches at the local level all over Europe. The colonial history of many
European countries has led not only to migration from many parts of the world especially to
large cities such as London but to a complex interweaving of relationships between home
countries and various countries of settlement.
This can lead to some vibrant and growing congregations but it can also throw up all sorts of
challenges to the traditional ways in which churches have ordered their worship and their
lives. People come with differing expectations around styles of worship, expectations of
pastoral ministry, the role of the local congregation and the ways of dealing with rites of
passage – birth/baptism, marriage and death. As most people retain links with their country
and region of origin there is often a reciprocal impact between developments in the home
country and the country of adoption.
For example, the links between Sierra Leone and Britain meant that the atrocities in that
country impacted on those of Sierra Leonian extraction living in the UK. Relationships
become more complex. Some individuals live a split life – for example, spending part of the
year in London, part in Nigeria and part with relatives in the USA or Australia. Their family
travels very often become the basis for an import/export business very. All of this has
implications for churches in all the areas because their expectations of what their members
can do need to change to fit this itinerant lifestyle.
For many people especially younger people or second and third generation in the host country
there can be lots of tensions between the liberal, individualised societies of Europe and the
still struggling to be traditional societies of home. It is not simply that one is good and the
other bad – both societies have potentially positive and potentially negative influences
unhelpfully entangled together – posing a real challenge of discernment to those who move
between the societies and those who would seek to minister to them.
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It is at the local and church level that it is far more challenging to discern who are the winners
and the losers from the process of globalisation. The hospitals, restaurants and offices of some
great cities in Europe would grind to a halt if it were not for people from other countries
working as nurses waitresses and cleaners.
Churches in Europe have still to research and analyse the micro implications of globalisation
on their congregations and mission. As a worldwide Christian Church, which claims its
universality as a positive virtue, the challenge is to express that not just in relations between
churches around the world but within congregations that represent that diversity of nationality
and culture. For the wider communities it means also working on how to live in multi- faith
environments in a way that can be enhancing for all.
3. European Experiences and Visions
The following quotations from documents of the EU and the European churches demonstrate
the concern and importance assigned to Globalisation by these bodies from Institutions which
shape the political and moral discussion of the issue of globalisation.
3.1 Statements of the European Union
"Now that the Cold war is over and we are living in a globalised, yet also highly fragmented
world, Europe needs to shoulder its responsibilities in the governance of globalisation. The
role it has to play is that of a power resolutely doing battle against all violence, all terror and
all fanaticism, but which also does not turn a blind eye to the world's heartrending injustices.
In short, a power wanting to change the course of world affairs in such a way as to benefit not
just the rich countries but also the poorest. A power seeking to set globalisation within a
moral framework, in other words to anchor it in solidarity and sustainable development."
Laeken Declaration of the EU – December 2001
"The process of globalisation over the past fifty years has been accompanied by … major
improvements in the income of a substantial part of the world’s citizens and … major
improvements in other indicators of human welfare and quality of life in a large number of
countries, including significant improvements in life expectancies at birth. Although
correlation does not imply causality, there is little doubt that the substantial increases in
global per capita income that have been achieved would not have been possible without
continued progress towards deeper economic integration. …
However, despite an overall increase in income and welfare, the gap between richer and
poorer countries, and between richer and poorer segments of the population within countries,
has probably widened. In particular, it should be recognised that while globalisation is likely
to benefit overall those countries that are able to participate in it, it does create problems for
certain categories of the population. An example of this is how a mixture of reduced relative
wages and employment opportunities have affected low-skilled workers in industrialised
countries. Public policies have an important role to play in tackling the difficulties faced by
those that may lose from globalisation, while ensuring that those countries that integrate into
the global economy are able to reap the overall benefits.
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There also remains a group of, mostly very poor, countries that are less integrated into the
global economy and that continue to be largely excluded from the benefits of the globalisation
process. South Asia and Sub-Saharan Africa lag far behind regions such as East Asia and the
Pacific. Their share in world trade has fallen, their terms of trade have deteriorated and they
continue to be unable to attract foreign capital. Improving living standards and the economic
situation in these countries is one of the major challenges for the global economy.
A number of poor countries have been largely unable to participate in the benefits of
globalisation. They are trapped in a situation of low income and poverty, low levels of
education and investment and sometimes high indebtedness. For these countries, international
assistance is crucial."
Responses to the Challenges of Globalisation, A Study on the International Monetary and
Financial System and on Financing for Development Working document of the European
Commission services - 2002
3.2 Statement of European Churches
In a joint statement called "Charta Oecumenica" the Conference of European Churches and
the Council of Catholic Bishops’ Conferences of Europe have declared:
„The churches support an integration of the European continent. Without common values,
unity cannot endure. We are convinced that the spiritual heritage of Christianity constitutes an
empowering source of inspiration and enrichment for Europe. On the basis of our Christian
faith, we work towards a humane, socially conscious Europe, in which human rights and the
basic values of peace, justice, freedom, tolerance, participation and solidarity prevail. We
likewise insist on the reverence for life, the value of marriage and the family, the preferential
option for the poor, the readiness to forgive, and in all things compassion.
As churches and as international communities we have to counteract the danger of Europe
developing into an integrated West and a disintegrated East, and also take account of the
North-South divide within Europe. At the same time we must avoid Eurocentricity and
heighten Europe's sense of responsibility for the whole of humanity, particularly for the poor
all over the world.
We commit ourselves
• to seek agreement with one another on the substance and goals of our social
responsibility, and to represent in concert, as far as possible, the concerns and visions
of the churches vis-à-vis the secular European institutions;
• to defend basic values against infringements of every kind;
• to resist any attempt to misuse religion and the church for ethnic or nationalist
• to counteract any form of nationalism which leads to the oppression of other
peoples and national minorities and to engage ourselves for non-violent
• to strengthen the position and equal rights of women in all areas of life, and to
foster partnership in church and society between women and men."
Charta Oecumenica of the European Churches – April 2001
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3.3 European Social Market Systems
The Social Market Economy, which in various forms is the predominant economic system in
Western European countries, is founded on anthropological and ethical preconceptions. It
starts from a human image involving freedom and personal responsibility, solidarity and
social commitment. The Social Market Economy is based on preconditions that it cannot
create or guarantee itself, but without which it will not be viable in the long run.
A lasting improvement of the economic and social situation can only be based on the
recollection of the human image and fundamental values underlying the Social Market
Economy. In drawing public attention to them, the churches render a genuine service. The
Christian view of humankind is one of the basic spiritual forces of our common European
culture and the economic and social order deriving from it.
In the final section of this paper, the political consequences of taking this position in the
debate on globalisation will be examined. It is important first to draw in the experience of
Europe. What does the European experience bring to a world facing globalisation apart from
the values to which reference has already been made?
Two points can be made here.
• The first is that Europe is one area in the world where several economic systems have
operated side by side during a large part of the 20th Century. Europeans have seen how
a centrally controlled economic system reduces political freedom and democracy.
They have also seen that a free market system which operates without effective and
democratic mechanisms for ensuring social and environmental objectives gives rise to
immense injustices. This second point was well- illustrated in the 2001 Budapest
consultation on the effects of globalisation in Central and Eastern Europe as an
inadequately regulated free market system without legal supporting structures
replacing the previous centrally planned and controlled system. The two systems
which succeeded each other in Central and Eastern Europe can be contrasted with the
various systems which existed in Western Europe where a market system operated
with a series of social and political mechanisms which prevented the market from
arriving at extreme results. This required a balance of democratic political measures
with market-based economic activity in a framework of law and human rights. There
was a conscious attempt to balance freedom and equality, even if there was never
perfect freedom nor equality. There is little doubt that the inequalities and injustices
within those systems have grown greater in the past decade as growing corporations
cross national boundaries, escape political restraints and regulation and become
focused on the pursuit of shareholder value without adequate recognition of the
interests of other stakeholders. Nevertheless, despite the faults, it could be that the
principles on which such systems were broadly based come closer to the kind of
balance implicit in the values espoused by churches than do other systems.
• The second element which comes out of European experience is that of the
European integration process. What has been built up in the last 50 years is
unique in the world. Other regional economic and trade organisations exist, for
example, the North American Free Trade Area and Mercorsur in South
America. None has the s ame degree of political integration nor the same
emphasis on social and environmental aspects. In other words the social market
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model finds a political expression at the European Union level. As one of the
strong economic powers of the world, it is capable of playing a significant role
in the face of globalisation and being a potential model for other regions.
It would, however, be an illusion to suggest that the present operation of the European Union
fulfils the principles which have been set out earlier. Some of the examples given in earlier
sections of this paper point to areas where there are problems in the policies of the Union and
its member states. The perceived pressures of global competition lead to pressure for
weakening of the social and environmental dimension. There is, however, still a strong
pressure to maintain the social market model and to develop and adapt it which suggests that
there is a possible alternative which can be pressed in this context.
4. Major Challenges for Europe and the Churches in Europe
Reference was made in the previous section to the experience of European integration and its
impact on the governance of Europe. It would be unrealistic and utopian to believe that an
equivalent of the European Union could be constructed globally, or a counterweight to an
international financial system which is dominated by strong economies and by enterprises
which are unresponsive to political regulation. Nevertheless, there are a number of pointers
which suggest that it could be possible to go beyond denunciation of the present system and
structures to reforms which could maintain the principles which have been enumerated earlier.
There is a need to advocate steps towards a viable and effective system of global governance.
4.1 Ethical Ori entation
The challenges raised by globalisation have to be met on the basis of ethical guidelines. The
suggestions we make here are not meant as a Christian-ethical blueprint for action. They will
have to be tried and tested in discussion. However, they are expressly intended to encourage
the consideration of the ethical dimensions of practical issues, and to influence the proposed
solutions. Not only on the political level of the European Union but also at the personal level
many people have to accept the fact that the system of coordinates in which they live their
lives has fundamentally changed and is continuing to do so - without their desiring these
changes or being involved in them. Migration and increasing worldwide communication and
information changes a largely uniform cultural identity into a pluricultural coexistence, at
least in the bigger cities. That heightens the concern for a common ethical orientation.
In the light of Christian values and the European experiences globalisation will have to be
judged by whether it strengthens or weakens economic, social, environmental and political
sustainability. Globalisation as a process to be shaped with responsibility may not be
controlled solely or primarily from corporate headquarters or from one political superpower.
It requires the participation of all stakeholders and its benefits must thus be constantly
checked in the context of a global civil society.
4.2 Preservation and Renewal of the Social Market System
In many European countries, different pillars of social security have been established as an
adaptable system of community insurance based on solidarity. The underlying idea and basic
elements of this system deserve to be preserved and defended. Europe is still one of the
wealthiest regions in the world. The Gross National Product has never been so high, nor
living standards for the majority of citizens.
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Social balance is an integral part of the concept of the Social Market Economy. Anyone who
questions the principle of a limited correction of income distribution, calls the welfare state
into question. Only a financially well-off state can function as a welfare state. That implies
acquiring the means to bring about social justice. Despite necessary steps to streamline the
state it must not be starved of resources and finally become so lean that it cannot adequately
fulfil its task as a welfare state.
The European Union is one of the driving forces of global economic liberalisation. In order to
be able to distribute the burdens and advantages of globalisation more fairly regions like the
EU need a suitable regulatory framework and an institutional identity. Here are some
• a better coordination of European monetary policy and national financial and
collective bargaining policies;
• a uniform European ecological tax reform;
• minimum standards in the field of social and ecological affairs and in labour law;
• greater powers for the European Parliament and a politically informed European
• the strengthening of European civil society vis-a-vis the EU administration;
• the adoption of a European constitution.
The Churches in Europe support unity of the European continent based on respect for human
rights and basic values of peace, justice, freedom, tolerance, participation and solidarity. We
believe that the rich heritage and experience of the various social market systems in European
countries can be an important contribution for a global political framework for economic
4.3 Reorientation and Regulation of the Capital Market
The globalisation of the financial markets under the leadership of the stock markets is one of
the most powerful and most controversial aspects of globalisation. It is a condition for global
trade of goods and services but it is also a source of volatility, global political instability,
criminal activities and of the growing gap between poor and rich. Financial markets have to
serve – according to the above mentioned values – to increase wealth for all, the freedom to
act responsibly, peace through economic stability and to strengthen international
communities. To reach these goals the financial markets as an important sector of
globalisation have to be reoriented and regulated in order to take this responsibility (eg, Tobin
tax, instruments against capital flight and tax evasion and for ethical investments, reform for
more democracy and transparency at the IMF).
In order to prevent a collapse of the global economy the setting up a new "political
architecture" for the world has become the prime political challenge. The uncurbed capital
market constitutes a particular risk, as the East Asian crisis showed. It has to be confined
within boundaries that enable the market to operate efficiently but reduce the risk of regional
or global financial crises. Here it is not just new patterns of co-operation and regulation that
have to be found, but also new ways of legitimising them.
In this regard it is necessary to look at a recent working document of the European
Commission services "Responses to the Challenge of Globalisation" (SEC(2002) 185 final).
While this document does not take a radical position on global governance - for example, it
has major reservations on a currency transaction ("Tobin") tax or an international carbon tax -
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it shows the issues are being taken seriously in the European Union context, together with a
search for solutions. The churches should be in clear and constructive dialogue with the
European Commission and with other European Union institutions in order to press for
developments of thinking towards global governance.
4.4 Commitment for Sustainable Development
One criticism of the above- mentioned paper of the European Commission is that it does not,
however, tackle the social and environmental dimension. How could it be possible to give
priority to this dimension and incorporate it into a system of global governance? This is an
area which merits further exploration and dialogue with the institutions. A worthwhile starting
point for an exploration of the whole dimension is found in the report of the CEC Church and
Society Commission's Working Group on Economic, Environmental and Social Issues,
Sustainable Development and the European Union. This examines the extent that European
Union policies on climate change, transport, energy, agriculture and social policy live up to
the European Union's expressed commitment to sustainable development. A starting point for
the global governance aspect could be the report prepared for the Roman Catholic bishops of
the Commission of Bishops’ Conferences of the European Community (COMECE), Global
Governance - Our responsibility to make globalisation an opportunity for all, published in
September 2001. This makes the suggestion of strengthening the International Labour
Organisation, creating a World Environmental Organisation and linking them together with
the World Trade Organisation through a Global Governance Group.
The idea that companies exist only for the benefit of shareholders is not only a perversion of
commerce, but counter-productive in practice. This "heresy" removes management, workers,
clients and customers from the issue, as if they had no status morally or as agents of change. It
fails to appreciate their worth as human beings and to the long-term added value to companies
who appreciate that their human investments produce not only dividends for themselves, but
society as a whole. The experiences of European show clearly that economic growth has to be
balanced with social justice and ecological stability in order to achieve a sustainable
4.5 Strengthen European Global Responsibility
Economic activity, market, growth and globalisation are not ends in themselves. They have to
be measured by the extent to which they allow and guarantee all people a decent living. The
opportunity offered by globalisation lies less at the level of individual demands or proposals.
These tend to be old familiar themes dressed up as new arguments. The opportunity lies in the
fact that there is a project capable of firing the imagination of politicians and representatives
of civil society alike - and that there is a basis for cooperation instead of confrontation.
We therefore once again endorse the need for a workable political framework oriented to the
principle of social justice and ecological sustainability. In view of the untrammelled
dominance of private business interests at the global level and the resultant restriction of the
political room for manoeuvre of individual states, there is an urgent need for a global
framework for economic and social action. We consider the European Institutions to have a
major responsibility to contribute to and press for this framework. Their experience with
various social market systems gives them an asset in the international discussions.
In all their decisions governments have to do justice to their global responsibility. Coherence
will become increasingly important here: between words and deeds, and between the different
policy areas. It is unacceptable that, on the one hand, respect for human rights is called for
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and, on the other, arms are supplied to war-torn countries like Angola, albeit unofficially.
That applies to equally to the governments of the industrialised countries and to those of the
developing countries and the transition states of Eastern Europe. Restrictions placed on the
arms trade must not be weakened by economic interests. The central feature of relations
between the EU and developing countries must be coherence. That in turn leads to certain
consequences for action:
• In order for the efforts of the EU and its member states to support crisis prevention
and conflict resolution no weapons may be supplied to crisis areas.
• If the integration of developing countries into the world market is pursued as a
major objective of European Union development policies, it must not be
counteracted by protectionism in Europe, e.g. in the agricultural sector.
• Market openings must not be conducted on the basis of the law of the jungle. The
industrialised countries must also open up their markets at points where they are
vulnerable. The opening of the EU towards the east has particular importance in
this context. It is part of the globalisation process but is perceived as a
particular threat due to the geographic proximity of the central European
countries. Politically and economically speaking, there is no alternative to
enlargement. It is in the interest of all parties.
4.6 Review Immigration Policies
The industrialised countries need to review their immigration policies. The present practice of
welcoming computer specialists or football players and discouraging other job seekers must
be replaced by an immigration policy that does justice to the people in both the North and the
South. If the most competent women and men immigrate from the developing countries to the
industrialised countries this will, in the long term, slow down development in the poorer parts
of the world. And in a truly globalised world it will no longer be justifiable for some to enjoy
privileges through the good luck of their birthplace and others to remain excluded from these
forever due to restrictive immigration policies.
The universal calling of the Church and global fellowship with our sisters and brothers means
that we cannot content ourselves with finding solutions which work for a part of Europe. The
national reports to the Western European consultation in Soesterberg in 2002 show the
negative impacts of globalisation in this region. The proceedings of the Central and Eastern
European consultation in Budapest in 2001 show the negative effects in that part of Europe.
Other regional consultations show the impacts in the South. In Western Europe, churches
have an obligation to take these reports seriously and address the global dimension. Although
conditions have been identified in chapter 1 which could lead to endorsement or rejection of
globalisation, the reality is that neither is entirely appropriate. Europe’s social market model
can be offered as the basis for a response. If, however, the social market model is to offer
hope for the whole world, there is a need to develop a system of global governance which
ensures that the social and environmental dimensions are brought fully into consideration
globally. This is a task which entails further reflection and dialogue with the political
institutions both at national and European Union levels.