Presentation of Financial Statement of the Holy See for Fiscal Year 2002

Deficit a Reflection of Worldwide Economic Downturn

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VATICAN CITY, JULY 10, 2003 ( Here is the address delivered today by Cardinal Sergio Sebastiani, president of the Prefecture for the Economic Affairs of the Holy See, when presenting the Consolidated Financial Statement of the Holy See for fiscal year 2002.

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In this, our usual meeting, I have the honor of presenting the Consolidated Financial Statement of the Holy See for fiscal year 2002, the first expressed in euro.

As a consolidated financial statement, it represents as an integrated whole all the income and expense of the various Vatican administrations that are within the area of consolidation. Thus it includes the Administration of the Patrimony of the Holy See (APSA) — the most important in that it provides for al the administrative operations of almost the totality of the Offices and the Entities of the Curia Romana — the Congregation for the Evangelization of Peoples, the Apostolic Camera, Vatican Radio, the Osservatore Romano/Vatican Printing Press (merged with regard to administration), the Vatican Television Center, and the Vatican Publishing House.

As you know, in 2002 the world economy entered a phase in which the symptoms of a crisis that began in the last part of 2000 became accentuated, and the end is not yet in sight. The stock markets have fallen, and this has been accompanied in the euro area by a fall in gross national product, consumption, and investments. At the same time, the exchange markets, we have seen a gradual rise of the euro against the dollar, which by year end had lost 18% of its initial value. All of this could not but influence in a negative direction the financial statement for 2002 of the Holy See as well; it registered a deficit of 13,506,722 euro.

This is the second negative result that follows upon a period of surpluses right up to 2000. The loss is due primarily to the reversal of the result in the financial sector, as we shall soon see. If the negative result is held at a more reduced level, this is due to the constancy or improvement of other sectors, obtained notwithstanding the aforementioned difficulties.

With this introduction, I turn now to the analysis of the principal entries of the operating statement, which as usual are expressed in the following four categories:

1) Institutional Activity. This first sector encompasses all the Dicasteries of the Roman Curia (the Secretariat of State, the Congregations, Councils, and Tribunals, the Synod of Bishops and the various Offices); these assist the Holy Father more closely in his ministry as Universal Pastor at the service of the Particular Churches and also for the benefit of humanity as promoter of peace in today’s world. Entities such as those indicated above, called as they are to render services, do not produce income. This is the source of the significance of Canon 1271 C.J.C., which invites the Bishops to come freely, according to their ability, to the aid of the necessities of the Holy See to make it possible for him to offer his service to the Universal Church, in the same way that, under Canon 1263, C.J.C., the diocesan curiae are sustained by free offers coming from the parishes. The difficulties of the year just completed notwithstanding, the volume of donations that came to the Holy See in 2002 showed an un-hoped for increase, bringing the sum at the end of the year to 85,385,000 euro.

With regard to expenses, which amounted to 105.991 million euro, I would emphasize that during the year a strict control was maintained regarding costs; this was translated into, among other things, a reduction in expenditures for both the Apostolic Nunciatures and public services, as well as containment of increases among the other entries. This important sector closes, therefore, with a deficit equal to 20,206,000 euro, which is a significantly reduced deficit in comparison with that of the institutional sector for 2001, which stood at 32,787,000 euro.

2) Financial Activity. In this sector are included the financial activities of the consolidated administrations: I remind you that the most important financial portfolio is that of APSA Extraordinary Section. The net result of this sector is negative in the amount of 16.3 million, compared with a positive result in 2001 of 32.9 million. The cause can be attributed to the thoroughly unfavorable course of the world economy in the course of the year: within this sector, the loss on fluctuations in the rates of exchange, which closed in the amount roughly of negative 45 million euro, while sales of securities almost succeeded in maintaining the positive results of the preceding year. Taken as a whole, the sector realized the figures of 56,721,000 euro in losses against only 40,413,000 euro in income.

3) The Real Estate sector showed total expenses of 24,966,000 euro and income of 44,048,000 euro; the sector therefore closed with a gain of 19,082,000 euro, compared with 12,883,000 euro in 2001. In contrast to what took place in 2001, a year in which expenditures for maintenance increased, these expenses were reduced considerably in 2002, by more than 6 million euro.

4) The activity of the Media Institutions connected with the Holy See showed, for the first time in many years, an improvement in the bottom line, negative in the amount of only 1,659,000 euro compared with a negative result for 2001 of 21, 636,000 euro. In this sector, the total expenses fell from 44,859,000 euro in the previous fiscal year to 42,404,000 in 2002, while the total income reached 40,745,000 euro. In the latter is included a large contribution designated for Vatican Radio, from an entity that is external to the area of consolidation.

The last part of the operating statement pertains to other income and expense. This presents a positive result of 5,985,000 euro, slightly higher than the 5,145,000 euro of the preceding year. As in 2001, the positive result of 2002 can be attributed in large part to the recovery of prudential set-asides that by now have become unnecessary, as well as the cancellation of expired debts.

After having submitted the financial statement to the examination of the Council of International Auditors, I had the privilege of presenting the Consolidated Financial Statement for 2002 to the Holy Father in the course of an Audience granted to me on July 7, 2003 and of presenting to the Council of Cardinals for the Study of the Organizational and Economic Problems of the Holy See, which met on 8 July, 2003. The financial statement will now be translated into various languages and sent to the Bishops and the Superiors General of Religious Institutes.

We are now happy to respond to your questions.

[Text distributed by Vatican press office]

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