Vatican Finances: �the Crisis Calls for More Transparency and Controls,␝ Bertone Says

Vatican Insider
December 19, 2012

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Tarcisio Bertone

The Vatican Secretary of State shares his thoughts at the presentation of the new Regulations governing the Prefecture for Economic Affairs of the Holy See

The Vatican’s financial transparency issue has more to do with the crisis than with the Vatican document leak scandal: the Holy See must proceed in "the gradual, but effective, reduction of costs in the face of a continuing inability to increase revenues,” the Vatican Secretary of State, Cardinal Tarcisio Bertone told employees of the Prefecture for Economic Affairs of the Holy See in a speech this morning.

The Regulations - which will be presented officially to the press next Thursday – were in fact promulgated last 22 February and were probably prepared long before that date. In the face of the global crisis, "the Holy See", must also proceed in "the gradual, but effective, reduction of costs in the face of a continuing inability to increase revenues at least in proportion to the deficits as recently recorded in the consolidated balances," Bertone said.

In actual fact, the Holy See’s balance sheets have seen fluctuations in recent years but it was only in 2011 that it came dangerously close to being in the red, with a deficit of almost 15 million Euros. It should be stressed, however, that after reaching a peak of 253 million Euros in 2009, the Holy See’s revenues have been gradually decreasing, while last year expenses went through the roof, increasing by 30 million Euros in 2011 alone. As a result, dioceses across the world were asked to make an extra big effort to gather an unlikely five million Euros more than the previous year. Even the Vatican bank, the IOR, had to reduce its contributions from a maximum of 55 million to 49 million Euros.

The other issue Bertone addressed in his speech was “the necessary transparency in the economic and financial activities of the Holy See and Vatican City State” to adapt itself “to the international standards of financial control," in light, partly, of the Holy See’s decision to adapt itself “to the international standards of financial control,” efforts which were gradually recognition on a European level.  The cardinal was referring of course to Moneyval’s supervision of the Vatican and the IOR’s financial activities. Moneyval is the Council of Europe’s committee of anti-money laundering and terrorism financing experts. The committee became involved in the Vatican’s finances after the Public Prosecutor’s Office in Rome started making inquiries into some shady financial activities going on in the Vatican and after a new piece of legislation was introduced by the Pope’s order, to get the Vatican in line with international money-laundering standards by establishing the Financial Information Authority (FIA).

In light of the scandals surrounding a number of Vatican bodies - such as the Congregation for the Evangelization of Peoples which manages its own finances independently – Bertone called for an increasingly incisive and unified commitment to correctness on the part of the individual Administrations in the management of their heritage and economic activities." The Prefecture for Economic Affairs must reflect “the necessary transparency in the economic and financial activities of the Holy See and Vatican City State and it must respect the "orientation and programming" agreed with the Vatican Secretariat of State.

Cardinal Bertone recalled how Paul VI had decided to create an office for the management of the Vatican’s economic affairs “to fulfil specific tasks: knowledge, control, supervision and coordination "of all the Holy See’s most important investments and business transactions.”  The aim of this was to achieve "self-sufficiency". However, in the last few years, the Prefecture’s role was reduced to "a sort of central accounting house of the Holy See." But with the new regulations, "it is returning to its original spirit," placing itself as a higher body over the single Vatican administrations, with a direct link to the Secretary of State.