03/19/2013 04:40 pm ET Updated May 19, 2013

Spread: A Catholic Sin

The following is excerpted from the author's forthcoming book, 'The Crisis of The Vatican Empire: Why the Church Has Become the Global Accused.'

Martin Luther's Law

It might be hard to grasp if you live on the Mediterranean shores of Europe, but the Northern countries of the continent consider the southern countries' debts and high levels of spread Catholic sins. As a matter of fact, the German word Schuld means not just debt: it also means guilt. Semantic variations such as this reflect the deep cultural differences between Germany and other European countries. As tensions between Northern Europe and the Mediterranean region run high due to the economic crises of recent years, details can be helpful in understanding the underlying mistrust -- not to mention prejudice -- that the Cold Europe feels towards a seemingly happy and reckless Club Med (translator's note: a pun referring to Club Méditerranée, the French corporation of vacation resorts). The German word for debt regales the concept of it with different shades of meaning -- much more ethically discriminating than the simple diatribe on a single state's budget, or on the need for solidarity and financial support mechanisms.

The word Schuld harkens back, unwittingly and almost fearfully, to ethical values mixing culture and religion, injecting a tired and frightened European Union with ancient poisons. It touches a taboo, evoking the ghosts of religious wars, of the blood-stained decades of the Reformation and Counter Reformation, nationalist conflicts and schisms fought in the shadow of the European God.

This is a mostly un-discussed aspect of the recent debate. Still, it emerges now and then: a toxic, carsic river following -- if not guiding -- the fear for the future of the European single currency, and for the prosperous national economies that have gone into a solid decline over the span of a few months.

The new anti-Italian and anti-Mediterranean rhetoric -- not unlike the anti-German one -- tends to unconsciously feed on both cultural and religious stereotypes. These ancient truths are rooted deep in the memory of the Old Continent -- memories of secrets, recriminations and accusations -- and have lain dormant for decades. They are demons that should stay asleep, lest the hard-won understanding between nations -- that granted a long lasting era social and political peace -- be destroyed.

The current situation of uncertainty is waking them all up anyway, consequently aiding and abetting those who court isolationism, nationalism, and the shortsighted "do-it-yourself" approach born out of the pointless hope that survival is more readily accomplished alone. First among those in search for solitude is Lutheran Germany, then other countries with a Protestant majority, like Finland, the Netherlands and so forth. It has thus been theorized that, had Martin Luther -- the 16th century German theologian and reformer -- been there in Maastricht in 1992, when the basis of the European Monetary Union was set -- he would've opposed the entry of any Catholic country. Read my lips: No unreformed Catholic countries, he would have chanted.

The whole of Northern Europe now longs for Luther's Law, feeling its absence has led to all evil. Had the Protestant founder's lips been read like they should, the Euro would have been far more cohesive -- and the European economy in far less trouble. So wrote Stephan Richter, editor-in-chief of The Globalist, a widely read website from Washington, D.C. devoted to analyzing international trends in the age of globalization. Mr. Richter is a Catholic pundit, but he is above all German. He theorizes that "too much Catholicism is detrimental to a nation's fiscal health, even today in the 21st century."

It then follows that, to test the idoneity of a country entering the European currency community, one wouldn't need to look at its budget, but at its religious chromosomes. The whole selection process would've been easier and probably more definitive: irrevocable, having been based on more concrete, centuries-old data. If a European country turned from Catholicism to Lutheranism or, more broadly, to Protestantism five hundred years ago -- when Luther, Calvin and Zwingli rebelled against the Pope -- then that the nation would qualify to adopt the common European currency some five centuries later. Catholics and Orthodox Greeks would be left out.

Why PIGS Are Catholic

PIGS is an acronym that stands for Portugal, Ireland, Greece and Spain, and it becomes Piigs when you add Italy to the mix: all countries with a vast majority of Catholics and Orthodox. They are states whose high public debt marks them as "guilty" and "sinners," according to German etymology; i.e. basically irredeemable. What's new is that this branding is now acquiring a more definitive kind of meaning. Not short-term, like the U.S.-imported crisis of financial capitalism itself, but more and more akin to a life sentence for a whole culture, way of governance, and also, a religion.

The root of all evil for these sinner countries is supposed to be the inability to emancipate themselves from Catholicism: a culture more than a faith, gone from indulgences -- salvation from sin in return for money -- to too much tolerance for fiscal sins. According to this line of thinking -- as explained by The Globalist, but more and more common amid North European intelligentsia -- the general tendency toward tax evasion and widespread corruption are legitimate children of the non-Protestants. Italy and Greece, as well as Spain, suffer from some sort of "Catholic illness" -- that is, a guilty inclination to forgive sin, fiscal or otherwise.

This sort of religious war fought over capitalist pedigree reaffirms the ambiguity and danger of this train of thought, which is leading toward the European breakup, not its reconciliation. It's as if each side were already formulating their own "objective," "indisputable," "divine" reasons for breaking up, echoing the nationalist instincts that are awakening in the public opinion of each respective country. So Italian Prime Minister Mario Monti's alert about "anti-German sentiment" being on the rise because of Chancellor Angela Merkel's harsh stance, somehow mirrors Germany's exasperation toward Mediterranean countries, Italy included. Their solidarity doesn't just seem undue, but it would signify yielding to an unacceptable "culture of sin," and admitting that Catholic Europe is undeserving of help (since they'd squander it anyway). Failing to consider these cultural and religious premises makes it hard to understand both the apparent lack of communication between European ruling classes, and many lobbies and political parties' attempts to exploit it.

Mr. Hans-Olaf Henkel -- the former head of the German industrialists' association, who accused the Euro currency of dividing Europe -- is but the vanguard of a wider movement highlighting the fear of a "Mediterranean" contagion, and respawning that ever-haunting inflation ghost: the very same one that gave birth to the Nazi horror. The hyperinflation that hit the country in the '20s is deep-rooted in German historical memory. So the idea of creating a "North European single currency" shared by Germany, Finland and the Netherlands -- and separated from a second-class "Mediterranean Euro" -- is also a way to reclaim the Protestant primacy over Catholicism; as well as to reaffirm the unlikelihood of an alliance between countries of the "Bible belt" and those of the "Gospel belt." "Eurozone's religious faultline," the BBC called it, evoking a new split along ancient lines. And noting how "the government in Berlin has begun to plan for what it sees as a hugely significant anniversary in 2017: 500 years since Luther began The Reformation."

"Catholics invented globalization!"

Such a debate has generated completely opposing analyses: for instance, an attempt by mostly Spanish economists to go back to the origin of capitalism, negating its Protestant origin and, on the other hand, highlighting the Catholic Spanish ones's vitality and expansive ability; specifically in the years between Reformation and Counter Reformation. Spanish diplomat Luis Francisco Martínez Montes recently ironized on those Protestant "economists-turned-theologians" who would argue that "other Christian denominations are culturally and morally unfit for capitalism and globalization". He portrays Luther, Calvin and Zwingli as unable to pay much attention to the world outside their provincial Central European confines. Pointing out that, by contrast "their Catholic counterparts -- immersed as they were in the early exploration, conquest and administration of distant lands -- had to devote plenty of material and intellectual resources to create the first networks for the mobilization of capital, ideas and souls on a global scale." He then pointedly reminds readers -- with unfettered Spanish pride -- that the first modern European thinking on how to organize a truly global commonwealth emanated not from Anglican Oxford, Calvinist Geneva or Zwinglian Zurich, but from Catholic centers of learning and decision-making like Salamanca, under the most Catholic European kingdom.

Martínez Montes' article is a counter-analysis opposing a counter-truth to the one currently prevailing. And it refutes one of the basic tenets of the supposed Protestant hegemony on capitalism. Even Max Weber's thesis -- on the secularization of power and knowledge being the premise of modernity -- gets reinterpreted. In his piece for The Globalist on "The Catholic Origins of Globalization," the author contentiously remarks that when Francis Bacon published The New Atlantis in 1627, "the idea of an institution devoted to the use of knowledge as a means to obtain power over and profit from nature had already been put into practice more than a century before in Iberia." He's referring to the Portuguese Casa da India founded in 1501, and to the House of Trade of Seville, established in 1503. Hence, his point: contrary to the "Protestant myth," even after Spain's relative decline in the second half of the 17th century, neither London nor Amsterdam dominated the world economy. These powerful cities could have access to Spanish-American silver and gold through trade, piracy, war, but the source of capitalism was in the hands of Spain. Over three centuries, this Catholic country, and its Armada, was the custodian and conveyor of massive quantities of gold and silver coins: "The lifeblood of the first global economy." Then came Britain, and in the 20th century the United States. As Martínez Montes likes to remember, the first secretary of the U.S. Treasury, Alexander Hamilton, ensured the adoption of the 1792 Coinage Act. And Hamilton set the value of the dollar, deciding that it would be "equal to the value of a Spanish milled dollar." The currency was a testimony to the Catholic origins of the first international monetary system. Therefore "the Protestant powers arrived later," he writes, rebuking the "economists-turned-theologians."

"They did not create early modern globalization, they just jumped into it and learned to profit from it".

Geo-religion in the Time of Spread

It's as if the financial markets crisis were designing not only a new geo-politics and geo-economics of spread, but also some sort of geo- religion based on the difference between interest rates on German and Catholic government bonds. Faith can influence European geography as much as economics and politics; it permeates mass movements and explains the deeper psychological reasons of events. So much so that some motivate the current inflexible and "egoistic" German approach with the decision to move the Capital from Bonn -- land of the compromise with the mostly Catholic region of Bavaria -- to the Eastern, Protestant Berlin. And also with the generational baton-passing from Helmut Kohl -- Catholic architect of the German unification, who came from the Rhine -- to Chancellor Angela Merkel, daughter of a Protestant pastor, hailing from the East. Just like Joachim Gauck, a former Lutheran pastor himself.

Konrad Adenauer, pioneer of the European economic community after the war, and Kohl, who theorized a European continent united by common and ancient spiritual roots. Now, new diverting roots seem to spawn, potentially conflicting, and artificially irreconcilable.

The geo-religion of the spread according to Luther requires some political and geographical readjustments. Like "Luther's law" allowing for countries where Catholics do count, a lot. Like Poland, Austria and France -- although Poland is not yet part of the Euro. For those who believe in the primacy of Protestant virtues, this can be easily explained with France, Austria and Poland all bordering with Germany; thus being positively influenced by its economic prowess. As if the "German sun" exercised some kind of "ptolemaic" attraction on other countries -- with them in turn realizing it's in their best interest to fit in a rigor-based economic and ethical environment. "Catholics perhaps, but with a healthy dose of fiscal Protestantism," as Stephan Richter puts it. What helps further, writes Richter, is the "Protestant character" of the Baltic and Scandinavian states.

In this new "strong axis of Europe" between Germany and Poland -- as Le Monde defined it -- Protestantism and Catholicism blend in the name of geopolitical interests. "Germans want the development of a new Nordic and Baltic Europe," said Polish finance minister Jacek Rostowski to the French newspaper. "It's a political, geographical and cultural circle that gives us an advantage."

Religious stereotypes are thrown around loosely, here, but later get rationalized. Whenever a doubt arises, it's all explained by the biological "principle of adaptation." Lutheranism did not take root in some European countries, but thanks to the positive German influence, it managed to assert itself anyway. In France, Austria, and even in the North of Italy, forging typically Protestant economic values, work ethic and integrity. So he somehow became a "fiscal prophet," both in the Lutheran regions and in vast parts of Catholic Europe. What's carefully left out by this line of reasoning, though, is a quite relevant detail that is instead well articulated by Sanjaya Baru of the International Institute for Strategic Studies: Germany is one of the "geo-political beneficiaries of the European debt crisis. Germany has deployed its economic and financial power in Europe to acquire political power of a kind that it has not enjoyed in a long time...."

In December 2012 a very interesting piece was published by The Economist. Comparing the current Euro crisis to the one faced by the Holy Roman Empire in the 16th century, and finding many clear similarities between the two. It all began -- according to the London weekly -- when Prussia became all too powerful: "Viewed through today's lens, one could see the origins of today's crisis, and the danger in the much longer term, in Germany's rapid growth after reunification with East Germany (which was largely the old Brandenburg-Prussia, as it happens)," they write. Reminding readers of how the Thirty Years War, ended in 1648 with the Peace of Westphalia, "began as an attempt to answer the unresolved question about sovereignty, then took on the guise of a faith war between Protestants and Catholics, before drawing in the other European powers in a general free-for-all, with kings, princes and enterprising generals slaughtering, raping and plundering as they could."

Benedict XVI's worry

How did a German Bavarian pope like Benedict XVI fit in all this? The former pope found himself unwillingly caught in the middle, under the double guise of citizen of a country hypercritical toward the Catholic economic culture, and as head of Catholicism. What's more: Benedict XVI knows full well the deepest instincts of the German people. And he ended up embodying the current European dilemma, stuck between the need to rechristianize Europe, and the need to prevent the rebirth of old religious divisions, facilitated by the impoverishment of a scared Western society. The discreet and mostly unknown diplomatic approach of the Vatican, aimed at closing the distance between wary European governments, highlights its worries for a split that is only apparently exclusively financial, and which actually threatens to transform into a social, political and ultimately religious divide. Something which, at least in part, has already happened.

When at the end of August 2012 Benedict XVI met Italian premier Mario Monti in the papal summer residence of Castel Gandolfo, "he manifested his concerns for the irritation against Europe" expressed by the CSU, Bavaria's Christian Social party. Some days later Gian Guido Vecchi commented on Corriere della Sera: "Such a mistrust would hit Italy harder than Spain and Greece."

"All frontiers fall before God," warned the pope -- quoting Giuseppe Labre "a truly European saint" -- while talking to the Bavarian governor Horst Seehofer. Cardinal Bertone also challenged the geo-religious approach: "It seems to me that the crisis has hit the whole of Europe, revealing the weak points of each country," he said to La Vanguardia, the leading Barcelona newspaper, on the 23rd of September 2012. He then remarked how: "The theory of those who see debt as a 'religious and cultural factor' might sound intriguing. But it doesn't simply appear historically founded, and it may just be an excuse not to look for more suitable solutions."

What's at stake here is not just the Euro itself, but European peace. The single currency was conceived as an instrument of economic cohesion, and above all as an antidote to nationalism, the catalyst of both European and world wars. "Its original rationale was largely political. It was necessary to prevent any future conflict in the heart of the continent," observed Jeffrey A. Frankel, professor at the John Kennedy School of Government of Harvard University. And only secondly, its objective was for the block -- now counting 17 European countries -- to act as a counterbalance to the power of the American dollar. Its crisis therefore threatens not just the internal stability of the Old Continent, but its peaceful coexistence.

Economy has long become the prosecution of war through other means. And States will not disappear but reorient themselves toward geo-economics "in order to compensate for their decaying geopolitical roles": this much was prophesized by American analyst Edward Luttwak in his 1990 essay. "Geo-economics is the best term I can think of to describe the admixture of the logic of conflict with the methods of commerce." If modern wars aren't fought with traditional weapons, but through economic and financial means, then evidently the risk is for religion to become the superstitious excuse needed to legitimate and justify them. The noble, hypocritical façade of values meant to divide, not to unite; and to affirm a diversity that looks a lot like superiority toward other nations and their people.

The ordeal of the German pope was born precisely because of all of this. He was aware of the hegemonic temptations historically reemerging in his own country. And he knew he had limited instruments to influence a mentality looking at Southern Europe through very old lenses. And while the Catholic Church loses followers and charisma, especially in the North of Europe -- partly because of the sex abuses scandals -- economics only makes matters worse. It was not enough for Benedict XVI to fight with courage, overpowering a strong opposition, against pedophilia in the Catholic Church -- although such a plague is certainly not limited to this particular religion.

Also working against him is the perception of Catholicism as a morally "weak faith," tainted by too-much-forgiveness, and by a tendency toward indulgence that had always been its strength; but that is now blamed as an intolerable fault. The real question is: why now? And the answer lies, at least in part, in the end of the Cold War. The whole child sex abuse scandal, for instance, began when the Western public opinion -- first in the United States, later in the Northern Europe -- faced the "secularization of sin." Refusing to allow these disgusting crimes to be simply dealt with as deviant behavior within the closed confines of parishes and cloisters: they had to be denounced to the authorities.

Ghosts of the old Europe

At the time when the Vatican was considered the "moral arm" of the Western democracy against the Soviet enemy, the Catholic hierarchies' "culture of silence" was partially tolerated. But that time is now over, and the Church had a hard time understanding the cultural paradigm shift, even before the religious one. As a result, tensions mounted between the Vatican and national governments like Belgium, Germany, the Netherlands; even with the once very Catholic Ireland. The closure of the Irish embassy to the Holy See in Fall 2011 was but a fallout of the Vatican inability to comprehend the new times.

The second reason for tensions rising even on the religious level, is the Northern and Eastern shift of the European power balance, due to the European enlargement. Such an equilibrium shift strengthened Lutheran and Protestant countries, weakening the very same liberal- Catholic culture and nomenclature that -- following the second world war -- forged Europe along its Central and Southern axis. The disappearance of Communism, along with a growing sense of uncertainty, reignited infighting and revived the myth of a German- Latin conflict. A suicide approach more and more common, as Europe gets marginalized by a globalized world.

Nationalist and religious ghosts stayed asleep for decades -- their dangers well known - and if they're now being awakened, it is a sign of decadence for an Old Continent lacking a sense of history. As Lucio Caracciolo cleverly wrote on the Italian magazine Limes: "After decades of meridian geostrategy, pitting Western and Eastern Europe one against the other in the name of the USA-USSR clash -- the so- called "lungs" of Wojtyla -- the continental limes (translator's note: latin word for dividing line) now seems to follow the North-South parallel, again pitting one against the other." With national character taking the place of the Iron Curtain. And the spread-infected Euro becoming the trigger of a new continental partition.

Europe is not just facing the double challenge of secularization and Muslim penetration, but is also threatened by the old Catholic-Protestant divide. So much so that historian Andrea Riccardi, current Italian Minister for the International Cooperation and Integration, and founder of the Comunità di Sant'Egidio, warns of "wars between poors, possibly of religious nature" right in the heart of Europe. And he's not exaggerating. That's the reason why in September 2012, the Sant'Egidio community held its annual meeting of world religious leaders in Sarajevo, in the former Yugoslavia -- a place symbol of the bloodiest ethnic and religious clashes of European recent history. And they did so to show the courage and strength needed to rationally analyze the implications of what's happening.

Democracy at risk

The fracture between "rich" and "poor" runs once more from North to South: this time, though, it sits right in the middle of Europe. And debates on Protestant "virtues" and Catholic "sins" in finance are laying the groundwork for this clash. Without anybody realizing the implications, now monsters return, enemies are looked for, scapegoats are pointed at. While the Church of Rome appears frightened, its vision too blurred to read the signs of the times. It ended up being part of the European West's crisis, not of its solution, for it couldn't offer a strong point of view on a clash of civilizations that -- as Lucio Caracciolo points out -- was once "fought for the true Faith. And is now engulfing the continent. All because of a sovereign-less currency that was given a religious meaning by those who did not want it in the first place."

What appears increasingly evident is that the precarious balance of the European currency extends to its peace and democratic basis. When parliamentary systems don't insure wealth, or can't protect it from financial speculation, and unemployment reaches over 10 percent -- over 20 percent in Greece and in Spain, doubling among young people -- democracy itself is at stake. And the irritation of Southern Europe, France included, against the Lutheran moralistic rigor stems from a clear notion: such rigor doesn't lay the foundations for a solution, instead employing borderline racist anthropological principles to legitimate a dissociation. A dissociation that forebodes recession.

To speak too lightly about an exit from Euro is at once demagogic and irresponsible. A September 2011 UBS (Union Bank of Switzerland) research note calculated the cost of a Euro break-up. Its three authors, Stephane Deo, Paul Donovan and Larry Hatheway offer a nightmarish vision, making it clear how the end of Euro would signify the destruction of Europe.12 Economic costs would be scary enough. And although precise calculations are missing -- for such scenarios would be incalculable -- conservative estimates show the gross domestic product of the weakest nations leaving the Eurozone as falling between 40% and 50%. The price would be steep for Germany, too: "The equivalent of 20% to 25% of GDP in the first year," according to UBS.

Returning to the heart of the matter, though, the real disaster would be political. The UBS research, aimed at investors looking for business opportunities, also explains that "the economic cost is, in many ways, the least of the concerns investors should have about a break-up. Europe's 'soft power' influence internationally would cease, as the concept of 'Europe' as an integrated polity becomes meaningless. It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war."

A civil-religious war between Christians would be the rotten cherry on top, finishing what started with the poisoning of the European identity born after the Second World War. Anti-German feelings against anti- Italian sentiments. A rich and virtuously less-indebted North, ironclad in its Lutheran intolerance, against a poor South, indebted and thus guilty of its own all-Catholic self-indulgence. People in the streets against their own governments, and later gathering outside embassies of countries all of a sudden perceived as "enemies." And finally, the appearance of the ghosts of nationalist hate. Hypothetical snapshots that need to be taken into account, so as to avoid their becoming real. Memories of the ethnic- religious cleansing in former Yugoslavia, right after the fall of the Berlin Wall, are still there to warn us of a clear, present and blood-soaked danger.

If the spread is to be considered a fault which has to be confessed, a sin to expiate, while its absolution shouldn't any longer be taken for granted, and rightly so, it also has to be said that excommunications and supposed geoeconomic and georeligious primacies might turn out to simply be shortcuts setting European history back. Not just by a couple of years, but decades: the darkest ones.