Sunday, July 15, 2012

Concerns over Vatican Finances After Budget Deficit

Concerns have been voiced over Vatican finances as the Vatican registered one of its worst budget deficits in years, plunging back into the red with a €15 million deficit in 2011 after a brief respite of profit.

The Vatican blamed the poor outcome on high personnel and communications costs and adverse market conditions, particularly for its real estate holdings.  

Indeed not even a €50 million gift to the Pope from the Vatican bank, and increased donations from dioceses and religious orders, could offset the expenses and poor investment returns, the Vatican said in its annual financial report.

The report stated that the Vatican ran a €14.9million deficit in 2011 after posting a surplus of €9.85 million in 2010. 

The 2010 surplus however was something of an anomaly.  

In 2009 the Vatican ran a deficit of €4.01 million, in 2008 the deficit was €.9 million and in 2007 it was nearly €9.1 million.

Meanwhile the Vatican City State, which mainly manages the Vatican Museums and is a separate and autonomous administration, managed a budget surplus of €21.8 million. This is largely due to a spike in revenue from the museums.  

More than five million people visited the Sistine Chapel and other works of art in the Vatican museums last year, bringing in €91.3 million in 2011, compared to €82.4 million a year earlier.  
Donations from the Peter's Pence collection, which are donations from the faithful to support the Pope's charity works, rose from €53.7 million in 2010 to €55.3 million last year.  

That money, however, doesn't factor into the Vatican's operating budget, though contributions from dioceses, religious orders and the Vatican Bank do. 

The Vatican bank, known as the Institute for Religious Works, is able to make such a big contribution to the Vatican's budget each year based on investments.

Among the huge items of expenditure for the Vatican were, spreading the faith via Vatican media through mediums such as Vatican radio, the Vatican newspaper L'Osservatore Romano and Vatican television, as all of them have significant expenses and generate little or no revenue. 

Commenting on the figures Fr Fedrico Lombardi, who runs the Vatican radio and television departments and is also the Vatican media spokesman, stressed that layoffs among the 2,832 Holy See personnel are not envisaged but that savings must come from elsewhere. 

“During the meeting of cardinals who oversee the Vatican's finances this week there was a request for prudence and savings.  I'm not an expert.  Yes the deficit is bigger than last year.” 

However he added that the amounts were not alarming on a global scale.  

“Certainly they indicate a need to pay attention and see the criteria the Vatican's assets are administered.”