ROME (AP) – The Vatican warned on Friday that it has nearly depleted its financial reserves through past donations to cover budget deficits in recent years, as it pushed to keep giving the faithful to the Holy See and the to keep the ministry of Pope Francis going.
The Vatican released its 2021 budget in its latest effort to increase financial transparency amid a forecast budget deficit of € 50 million this year. The aim is to reassure donors that their money is being well spent, after years of mismanagement that is currently the focus of a corruption investigation in the Vatican.
Francis’ Minister of Economy, Reverend Juan Antonio Guerrero Alves, said the coronavirus pandemic, which reduced both donations and revenues from the closed Vatican Museums, would contribute to a projected 30% reduction in revenues to EUR 213 million by 2021, of 307 million euros in 2019, the last year available.
He noted that during last year’s lockdown, the Vatican had made significant cost savings, with drastically reduced travel, consulting, conference and assembly costs and postponement of unnecessary property repairs and maintenance. In an interview with Vatican Media, Guerrero said he expected to further cut spending by 8% by 2021, without resorting to layoffs, which Francis is against.
But even then, the projected deficit of 50 million euros for 2021 will have to be plunged again into reserves of past donations to cover expenditure. Guerrero confirmed that in 2019 the Vatican used EUR 27.2 million in Peter’s Pence reserves to cover its operating costs, in addition to EUR 53.8 million in revenues for the Peter’s Pence fund that year.
In 2020, he estimated that the Vatican had withdrawn € 40 million in Peter’s Pence reserves and a similar amount was expected in 2021.
The money from Peter’s Pence, usually offered at an annual mass collection, is billed as a concrete way to assist the Pope in his ministry and charity work, but is also used to run the Holy See’s bureaucracy.
“This recourse to Peter’s Pence reserves in recent years means that the fund’s liquidity is running out and with the current crisis it is very likely that we will have to rely on APSA’s assets to some extent in 2022,” said he, referring to the Vatican’s central bank, which manages the Holy See’s real estate and other financial investments.
The funds of Peter’s Pence have come under scrutiny during an investigation by Vatican prosecutors into the Secretariat of State’s investment of 350 million euros in a London real estate company, part of which was apparently funded by the Peter’s Pence.
Several Italian brokers and dealers, as well as some Vatican officials, are under investigation for suspicion of defrauding the Holy See millions in fees.