Vatican's Financial Statement Belies Reports About Its Wealth

Cardinal Sebastiani Discusses 2003 Deficit

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VATICAN CITY, JULY 8, 2004 ( The Holy See’s latest financial statement shows that the «Vatican’s riches» are a legend, says a Church official.

«If we had so much money, we wouldn’t need to put our hand out to ask for help,» Cardinal Sergio Sebastiani said with a smile today at a press conference.

The president of the Prefecture for the Economic Affairs of the Holy See was presenting the Vatican’s deficit numbers for the fiscal year 2003.

«And the Vatican’s riches?» a journalist asked him.

«A legend — the reality is far more prosaic,» the cardinal replied.

He explained that in the last year, in an adverse international economic situation, the Holy See applied an austerity plan to contain the deficit as much as possible.

The cardinal presented in the Vatican press office the Consolidated Financial Statement of the Holy See for the Fiscal Year 2003, which shows a deficit of some $11.8 million.

This marked the third consecutive year of figures in the red, though the 2003 deficit is less than that of the previous year, about $16.6 million.

In 2003, the Holy See recorded income of $251 million and expenses of $263 million, a financial statement comparable to that of several dioceses in some developed countries.

Between 1993 and 2000 the Holy See closed its financial statements in the black, after John Paul II convoked the presidents of the bishops’ conferences worldwide in 1991 to promote the implementation of Canon 1271 of the Code of Canon Law.

«By reason of the bond of unity and charity and according to the resources of their dioceses,» the canon explains, «bishops are to assist in procuring those means which the Apostolic See needs, according to the conditions of the times, so that it is able to offer service properly to the universal Church.»

With that meeting, 23 years of deficit ended. 1991 saw the highest deficit, $86 million.

Religious, Catholic foundations and faithful worldwide also contribute to the financing of the Roman Curia, whose services do not generate direct financial revenues.

Cardinal Sebastiani said these contributions in 2003 fell to 79.6 million euros, from 85.4 million euros a year earlier. This was due in part to the devaluation of the dollar against the euro.

Peter’s Pence — whose accounting is done in dollars not euros, unlike the Holy See’s financial statement — rose by 5.7% to $55.8 million. These funds do not cover the Vatican budget, but are allocated by the Pope to poor or persecuted churches, as well as peoples in need, or victims of war or natural disasters.

To address the decrease in income in the past year, the Holy See reduced its expenses, from about 106 million euros in 2002 to 99.4 million in the institutional sector, Cardinal Sebastiani said. In particular, over 1 million euros were saved on personnel, he said.

The cardinal added: «We have limited maintenance expenses to the urgent, in particular, as regards the 118 apostolic nunciatures in the world.»

The main reason for the deficit was the international economic situation.

«The world economy,» Cardinal Sebastiani said, «beginning with the last half of the year 2000, had already entered into a phase of crisis that then also amply reflected the effects of the turbulence provoked by different kinds of events, such as the attack on the twin towers, the last series of terrorist attacks, the war in Iraq, and the persisting Israeli-Palestinian conflict.»

«Only since the second half of 2003 was a certain recovery of stock activity evident,» he said. «But in Europe, investments are still lacking and above all demand is weak. The appreciation in value of the euro has continued, especially in relation to the U.S. dollar.»

Given that the Vatican belongs to the monetary zone of the euro, and that a good part of its contributions are in dollars, the devaluation of the dollar against the European currency has had a negative effect, the cardinal said.

To cover the deficit, help will come from the «net patrimony,» the cardinal said.

He specified that after the deficit of previous years, the Vatican has followed the recommendations of an ad hoc commission of cardinals, advised by the administrators of large dioceses such as New York or Munich, to keep expenses to a minimum.

The activity of Vatican media, including Vatican Radio and L’Osservatore Romano, closed with a deficit of 1.2 million euros, compared with a 1.7 million deficit in 2002.

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