Pope Francis urges Vatican leaders to fix city's ballooning budget deficit
Former Reagan Economist Art Laffer looks at the Holy See’s ballooning deficit and overarching societal debt problem.
The Vatican doesn't need a miracle just yet, but it may soon if it can not get its financial house in order.
Pope Francis ordered officials to close a ballooning budget deficit in Vatican City and to put an end to mismanaged spending in the Catholic Church’s global headquarters.
“I ask you to study all measures deemed necessary to safeguard the economic future of the Holy See and to ensure that they are put into effect as soon as possible,” the Pontiff wrote in a letter to Cardinal Reinhard Marx, head of the Vatican’s financial oversight council.
“Inform the respective heads about the gravity of the situation, the Pope urged.
FBN's Tracy Byrnes breaks down afternoon market news.
Vatican City’s deficit stood at 70 million euros, or $76 million, in 2018, doubling since 2017.
Pope Francis was appointed in 2013 with a mandate to overhaul the Vatican’s finances. But the Italian city-state is currently without a finance chief, as former chief Cardinal George Pell left the post two years following sex-abuse charges in Australia. Late last month, an Australian appeals court upheld the conviction of Pell who was found guilty of molesting two 13-year-old choirboys in Melbourne more than two decades ago.
Critics of the Pope have pointed to the Vatican’s lax approach to controlling the budget, saying redundant jobs and a costly car fleet elevate costs, while real-estate holdings are sometimes not maintained and rents often aren’t collected. The Vatican also loaned 30 million euros, or $32 million, to a Catholic hospital restructuring due to financial hardship.
About 45% of Vatican City’s budget of 300 million euros, or $329 million, is devoted to salaries for 3,000 employees, according to the Wall Street Journal, many of whom are in non-essential roles, budget hawks argue. Officials say the Pope won’t approve layoffs.
Still, Joseph Zahra, a Maltese businessman who is the top layman on the Council for the Economy, which supervises Vatican finances believes that "What (the Pope) is saying is this can't go on forever. One can see incremental changes but there have to be radical steps," he told the Journal.
The Holy Father established several new bodies to control finances after inheriting alleged financial corruption at the Vatican, including a whopping 550,000 euros, or more than $600,000 spent on a Christmas manger scene in St. Peter’s Square.
Vatican officials fear that a prolonged budget crisis could put some of the city’s notable sites and historic buildings in jeopardy, as well as putting employee pensions at risk.
The Vatican plans to release financial figures this fall for the first time since 2015 and hold a Sept. 20 meeting that will address resuscitating the city’s productivity.