Vatican City, the global headquarters of the Catholic Church and the world’s smallest independent state, is facing the threat of bankruptcy due to declining global donations and revenue streams.
According to the Daily Express, the latest financial reports for 2023 revealed that Vatican City ran an operating deficit of $87 million (£69 million), an increase from $82 million (£64 million) in 2022.
This situation has significantly strained the local pension fund, currently estimated to have a deficit of €631 million. As a result, concerns are growing that retired priests and Vatican staff may not receive their pensions, and several Catholic missions could be forced to shut down.
Reasons For Decline
The decline in donations is coming after many Catholics are said to have become disillusioned with Pope Francis’ reforms, the number of visitors to Vatican City has also failed to hit its pre-Covid levels which has greatly affected Vatican revenue from tourism.
The decline is also necessitated by a decrease in the global price of gold which happens to be one of the Vatican’s most valuable assets following the state’s massive investments in gold over the years.
There has also been the case of unnecessary spending by cardinals which the pope has tried to cut down. The pope has also warned that all Vatican institutions need to find external resources for their missions due to the growing decline in finances.
A significant factor that has contributed to the decline in the city’s finances is the fact Vatican’s financial investments are currently scattered over a myriad of institutions and this has made it difficult to track spending.
Disillusionment With Pope Francis
Pope Francis’ progressive stance on contemporary issues like climate change, immigration, transgender rights, and redefinition of family values has caused a rift with more conservative Catholics.
This group, viewing his views as a departure from traditional Church teachings, has distanced itself from the Church and stopped contributing financially.
Situation Not Beyond Remedy
Despite the threat of bankruptcy looming large, the Vatican hopes to generate enough revenue from the Great Jubilee of 2025 which marks the 1,700th anniversary of the Council of Nicaea which aligned the Catholic church with the Roman empire.
The Vatican hopes to attract to the 2025 Great Jubilee over 35 million pilgrims willing to spend money on cultural and tourist programs organized jointly by Rome City Hall and the Vatican.
Additionally, the Vatican has options to generate revenue by selling significant real estate assets, gold reserves, and priceless artworks when needed.
