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“The Pope’s mission is underfunded”

VATICAN CITY (RNS) – The Catholic Church’s chief financial officer warned in an interview on Friday that the Vatican’s financial health is facing “a very uncertain period” despite reporting significant progress in reducing the church’s budget deficit.

Rev. Juan Antonio Guerrero, prefect of the Vatican Economic Secretariat, said that Pope Francis’ reforms of the Vatican’s fiscal and investment policies have helped reduce the deficit detailed in the 2021 financial statements released on Friday (5 August).

The statement includes financial data for 92 Holy See entities, but omits figures for the Institute for Religious Works, commonly known as the Vatican Bank, and the Vatican City State Governorate, which includes its museums, police and other administrative bodies.

Despite cuts at the church bureaucracy known as the Roman Curia, Guerrero said spending continues to rise while revenue dwindles.

“There is no doubt that we cannot just respond to costs by reducing them,” he said. “There will come a time when they can’t be reduced any further without jeopardizing the mission, so we’re also working on ways to increase revenue.”

In short, the finance czar said, “The Pope’s mission is underfunded.”

Rev. Juan Antonio Guerrero in 2019. Photo by Robert Ballecer, courtesy of the Society of Jesus

The Vatican’s deficit, originally estimated at 33 million euros, fell to just over 3 million euros last year. The assets grew from 2.2 billion to 3.9 billion euros.

“The path we have taken continues and deepens,” Guerrero said in an interview with Vatican media published on Friday. Guerrero was appointed by Pope Francis in January 2020 to lead his efforts to reform the Vatican’s historically troubled finances.

The decline in the deficit is mainly due to “favorable market developments” and a positive exchange rate between the dollar and the euro, the report said. “Low income due to lower donations and contributions was offset by cost savings and careful property management,” it said.

In recent years, the Vatican has faced shrinking donations and the COVID-19 pandemic has reduced its resources. Meanwhile, financial scandals, most notably one surrounding a controversial London property purchase that led to the trial of a top cardinal, have cost the institution millions and stymied donations from Catholics worldwide, a group whose numbers are already shrinking amid rising secularization.

The London estate at the heart of the Vatican financial scandal.  Image via Google Maps

The London estate at the heart of the Vatican financial scandal. Image via Google Maps

Despite positive progress, Guerrero pointed out that Vatican revenues are highly dependent on market forces and “if financial results are not as favorable as they are in 2020, an operating deficit will emerge.”

The communications department remains the most expensive unit in the Vatican, costing a total of 40 million euros, the report showed. “Message spreading” was the Holy See’s main expenditure (€44 million), followed by support to ailing local churches (€38 million).

Guerrero explained that the Holy See had to sell €20-24 million in assets every year to cover the Curia’s expenses.

While the Pope’s reforms helped reduce corruption and cut costs, they also strained the Vatican’s finances. As an example, he offered Francis’ order that the Vatican’s highest court of appeals, the Roman Rota, which allows cancellations, stop charging access and turn it from “self-funding to deficit-ridden.”

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Dilapidated Catholic hospitals and an ailing pension fund are also a burden on the church’s finances.

“Catholic healthcare is going through a difficult time in Italy itself,” Guerrero said. Many Catholic-owned or managed hospitals are struggling with debt. While the Bambino Gesù Children’s Hospital “is economically healthy,” Guerrero said, Casa Sollievo della Sofferenza is currently in an “economic crisis.”

Referring to the Vatican’s pension fund, Guerrero admitted that there is no doubt “that we promise more than we can actually afford.” He added that while there is still time to take corrective action, “we need to do it soon.”

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