Pandemic, finances and red numbers in the Vatican

Covid-19 wreaked vast havoc across the planet. Leaders of all kinds of countries, rich and developing, were forced to take drastic measures to cope with the financial crisis resulting from this situation. And like much of these countries, Vatican City will also end 2020 with its public finances in a precarious condition.

The main difference with other countries is that, for example, the Vatican will not be able to receive a fiscal stimulus such as that of the European Union or it cannot issue bonds to settle its debts. Added to this, it is difficult to know exactly the economic situation since the latest publicly accessible data dates from 2015. In that year, the State of Vatican City reached a budget surplus of almost 60 million euros. However, these green numbers were achieved in large part by the income generated in the Vatican museums. Although the exact take remains confidential, it is estimated that annually ticket sales generate just over 80 millions of euros.

Due to the pandemic, museums have been closed for months. Even when they have been open, due to restrictions on the number of visitors and the scarcity of tourists in Rome, they have sold far fewer tickets than normal. All this means that the city-state could well end up with a deficit of €15 million or more by 2020. Such losses will have to be absorbed by the reserves they have accumulated. Vatican surpluses have so far been used to help finance the expenses of the other half of the Vatican: the Holy See - the central administration of the world's largest Christian church.

Unlike the museums in the Vatican, the Holy See closed 2019 with 11 million euros in the red. Even after contributions from the Vatican, a dividend from the City-State Bank and worldwide donations from all the faithful. Likewise, the management of Pope Francis, who seeks structural changes in the Holy See, has halved the rent of the properties that the Holy See owns and on which it depends for approximately a third of its income.

Added to the bad streak is the loss of income from commercial activities, such as the sale of publications and contributions from the dioceses of the Catholic Church, since fewer faithful have been able to attend religious services. Without forgetting that the population professing Catholicism has been in decline in the countries that account for most of the income of the Holy See. With this in mind, many analysts expect 2020 to be the most catastrophic year in the history of the Holy See and the Vatican.

But the pandemic is not the only culprit in the financial situation of the Vatican and the Holy See, among the causes is corruption. Moneyval, the European money laundering commission, has held an investigation into the finances of the city-state for the past two years. Aware of the general situation of the Catholic Church, Pope Francis, who was elected in 2013, has urged a reorganization of the Holy See.

One of his first moves was to delegate the work of the administrative "renewal" of the Vatican to a council of advisers who came mainly from outside Rome. After seven years of effort, the pontiff's advisers are currently working on the final draft that is expected to form the basis in 2021 for an Apostolic Constitution, the most solemn type of papal edict. However, with the severe blow that the coffers of the Vatican and the Holy See have received, it is impossible not to wonder if the changes will be enough and if they will arrive in time.