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Vatican in the red

After making a profit for eight years, the Holy See ran deficits in the three years through 2003, the Vatican's financial statements show.

The separately run budget for Vatican City, the independent papal state in Rome, was also in the red in 2003, the latest year for which figures are available.

The papacy relies on earnings from roughly $A1.3 billion in stocks, bonds and real estate to top up donations from Catholics around the world. While the Holy See benefited in the 1990s from booming stock markets and a strong US dollar, losses on currencies plunged it to a 9.6 million loss on revenue of 204 million in 2003.

"Vatican administrators, like many people, got accustomed to balancing the budget with great market gains," says Joseph Harris, a Seattle-based accountant who has done financial studies for several US dioceses and writes a yearly analysis of the Vatican's finances. "Well, the market giveth, and the market taketh away."

A Bloomberg report in The Age today says the papacy will be increasingly strapped for cash unless it finds new sources of revenue, according to Francis Butler, president of Foundations and Donors Interested in Catholic Activities, a Washington-based association of lay Catholic charities. The Holy See forecasts it will break even this year.

Catholic churches around the world donate about $A134 million a year to the Vatican. Individual Catholics gave an additional amount in 2003 to be used by the Vatican for charities, according to the annual report.

Holy See in the red (The Age/Bloomberg 7/4/05)
His Holiness has a few holes to fix (Sydney Morning Herald/Bloomberg 7/4/05)

7 Apr 2005