The Papal Financial Crisis

The seat of the world’s largest Christian denomination, nestled in the smallest country in the world, is struggling to balance its budget as Pope Francis is calling for a balanced budget for the Holy See. In 2018, The Holy See spent 300 million euros, most of which went towards financing traditional jobs and the car fleet. Most of the Holy See’s income comes from real estate assets in Rome, and from their Museums. Before the pandemic, Vatican officials were questioning The Holy See’s finances. In 2012, for instance, half a million euros were spent on a nativity scene in St. Peter’s Square and many call the jobs performed by the Holy See’s 3000 employees “redundant”. In 2018, The Holy See reported a 70 million euro budget deficit. The Vatican Bank and The Vatican City State, which are separate entities from The Holy See have normally pitched in to reduce the surplus, but if spending continues, it is unclear whether that will be enough. The Pope has charged officials with finding innovative solutions to the problem that don’t involve a decrease in salaries or lay-offs. In his most recent encyclical, Fratelli Tutti, Francis says, “This way of discarding others can take a variety of forms, such as an obsession with reducing labour costs with no concern for its grave consequences, since the unemployment that it directly generates leads to the expansion of poverty.” The Holy See’s challenge then will be to cut unnecessary spending, increase worker productivity, and ultimately, balance the budget in a humane way.