This paper is based on one originally prepared as a background paper for the consultation organized 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 organized as part of global processes on economic justice and globalization by the WCC, Warc and the 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 globalization. Globalization 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 globalization is to devalue faith and to limit their ability to choose a lifestyle based on faith.

The paper concentrates mainly on two questions: What effects does globalization have on Europe and what does the European experience bring to a world facing globalization. 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 globalization. But with respect to the history of economic models in Europe it tries to highlight some specific European concerns about globalization 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 globalization 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 neoliberal globalization and that this element should be added to the debate.

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

Keith Jenkins, director, September 2002

Members of the north-south working group

Pilar Agras, Eberhard Hitzler, Lawfort Imunde, Pauliina Kainulainen, Steward Lamont (secretary), Dragan Mikojewic, Antonious Papantoniou, Jennifer Potter (Moderator), Christoph Stückelberger, Greetje Witte-Rang

Others who have contributed to the paper:

Rob van Drimmelen (Aprodev), Doris Peschke (CCME), Keith Jenkins (Director, Cec Church and Society Commission

Christian values as a basis for evaluating globalization

A value judgement on globalization from a Christian perspective requires a statement of ethical foundations and values on which it is based. Globalization is a secularized 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 topical dimensions:

Economy as the responsible husbandry in production and the fair distribution of material goods;
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".

Globalization 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 globalization to bear good fruit.
Solidarity: Recognizing 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 coexistence.
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 own way.

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 radical change.

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 society.

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 recognized 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, globalization therefore has two faces:

Globalization 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.
Globalization has a negative face if it involves an attempt to reduce the world's multiplicity to one standardized 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.

Globalization

Definition of globalization

The term globalization became popular since the beginning of the 1990ies. We describe globalization as an ongoing global process with the following characteristics:

global economic integration,
liberalization of markets,
growth of global trade faster than production,
fast-growing global capital markets,
fast growth of telecommunication and transport technologies and facilities,

Perceptions and dynamics

Globalization 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 enthusiastic, while among those who feel powerless and dependent - probably the majority - fears prevail. On a superficial level, globalization 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 economically integrated.

There are historical reasons for the dramatic acceleration of political and economic integration after 1990, leading to a qualitative leap in the process of internationalization and consequently to the globalization of economic developments.

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 during the eighties. As a result, their negotiating position in relation to international capital owners was considerably weakened. Since the end of the old bipolar system we furthermore observe the growth of new polarities between ideologies, religions and cultures.
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 liberalization of trade, investments and the capital markets has led to the emergence of international or transnational 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 financial 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 bypassed. 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 liberalize 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 subsidized 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 globalization, 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 industrialized 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, ie trade and investments not related to speculative movements amount, however, to just 2.5% of this gigantic sum.

Increasing trade liberalization 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 industrialized countries have liberalized trade insufficiently. Agriculture is a case in point. In OECD countries farming is state-subsidized with contributions that together exceed the gross domestic product (GDP) of the whole of Africa.

Liberalization 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 industrialized countries. The money invested in developing countries was concentrated basically on 20 countries.

Continuing economic globalization has led to very different consequences, not least because political globalization is lagging behind. We observe that the economic globalization 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 globalization and has gained substantially from it. But at the same time, globalization has had various negative effects on European countries.

Globalization 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 globalization 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 today.

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 welfare state.

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 externalize environmental costs, short-term gains are bought at the price of long-term environmental damage. A beneficiary of globalization 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 globalized market for those who can meet certain minimum requirements. This creates a gap also within Europe and within European countries.

Within European countries there are winners and losers of globalization. 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 transnational companies (TNCs) can achieve enormous profit rises. Through internationalizing 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 globalization jeopardizes the ability of the welfare states to retain a high level of social security. Without doubt, globalization 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 individualizing 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.

Globalization and migration

Globalization and migration represent two of the most dynamic global sociopolitical trends of our present time. While both have their own driving dynamic, they are highly interrelated.

Globalization 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 globalization, 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 globalized 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 become an important element of the global competitiveness for a global economy.
In addition, the demographic developments in most northern industrialized 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 globalization constitutes a restraining force, counteracting migration:

Globalization prioritizes the importance of capital and downgrades significantly the role and relative power of the labour in the globalized economy. Particularly in the developed economies of the north since the early 70s 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 Organizations 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 globalizing 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 globalizing economy - both as those largely profiting from and setting the agenda of globalization as well as potential objects and victims of globalization 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 thousands of seasonal workers in the European agricultural sector.
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 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 globalization 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.

Globalization 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 globalization 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, globalization 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, individualized 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.

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 globalization. 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 globalization 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 multifaith environments in a way that can be enhancing for all.

European experiences and visions

The following quotations from documents of the EU and the European churches demonstrate the concern and importance assigned to globalization by these bodies from institutions which shape the political and moral discussion of the issue of globalization.

Statements of the European Union

"Now that the cold war is over and we are living in a globalized, yet also highly fragmented world, Europe needs to shoulder its responsibilities in the governance of globalization. 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 globalization 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 globalization 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 recognized that while globalization 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 industrialized countries. Public policies have an important role to play in tackling the difficulties faced by those that may lose from globalization, while ensuring that those countries that integrate into the global economy are able to reap the overall benefits.

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 globalization 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 globalization. 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 globalization, a study on the international monetary and financial system and on financing for development: Working document of the European Commission services - 2002

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 purpose
to counteract any form of nationalism which leads to the oppression of other peoples and national minorities and to engage ourselves for non-violent resolutions;
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

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 globalization will be examined. It is important first to draw in the experience of Europe. What does the European experience bring to a world facing globalization 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 globalization 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 organizations exist, for example, the North American Free Trade Area and Mercosur in South America. None has the same degree of political integration nor the same emphasis on social and environmental aspects. In other words, the social market 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 globalization 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.

Major vhallenges 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.

Ethical orientation

The challenges raised by globalization 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 globalization will have to be judged by whether it strengthens or weakens economic, social, environmental and political sustainability. Globalization 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.

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.

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 liberalization. In order to be able to distribute the burdens and advantages of globalization more fairly regions like the EU need a suitable regulatory framework and an institutional identity. Here are some concerns:

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 public;
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 globalization.

Reorientation and regulation of the capital market

The globalization of the financial markets under the leadership of the stock markets is one of the most powerful and most controversial aspects of globalization. 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 globalization 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 cooperation and regulation that have to be found, but also new ways of legitimizing them.

In this regard it is necessary to look at a recent working document of the European Commission services "Responses to the challenge of globalization" (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 - 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.

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 globalization an opportunity for all, published in September 2001. This makes the suggestion of strengthening the International Labour Organization, creating a World Environmental Organization and linking them together with the World Trade Organization 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 development.

Strengthen European global responsibility

Economic activity, market, growth and globalization 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 globalization 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 and, on the other, arms are supplied to war-torn countries like Angola, albeit unofficially. That applies to equally to the governments of the industrialized 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, eg in the agricultural sector.
Market openings must not be conducted on the basis of the law of the jungle. The industrialized 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 globalization 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.

Review immigration policies

The industrialized 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 industrialized countries this will, in the long term, slow down development in the poorer parts of the world. And in a truly globalized 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.

Conclusion

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 globalization 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 globalization, 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.

July 2002