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New book claims Vatican debt out of control, could lead to bankruptcy

Pope Francis’ advisers are openly admitting that the Vatican could go bankrupt if urgent action isn’t taken, a journalist has claimed.

Driving the news

The shocking allegation about Vatican finances is contained in a new book out this Monday, Giudizio Universale (“Last Judgment”), by Italian journalist Gianluigi Nuzzi.

In an excerpt from the book published Monday in Italian paper La Repubblica, Nuzzi claims Vatican debt “has reached worrisome levels, at risk of leading to default”.

“It’s not an exaggeration. The Pope’s own advisors admit it”, the journalist told Spanish news agency EFE.

Nuzzi is no stranger to the inner workings of the Vatican.

In 2012, he published a book – His Holiness: The Secret Papers of Benedict XVI – that led to the conviction, in the famous ‘Vatileaks’ trial, of former papal butler Paolo Gabriele, on charges of the theft of confidential Vatican documents.

In 2015, Nuzzi published another book – Merchants in the Temple – based on leaked Vatican financial papers, for which he was charged with divulging confidential information in the ‘Vatileaks II’ trial but ultimately absolved, for lack of jurisdiction.

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Go deeper

In his new book, “Last Judgment”, Nuzzi reproduces part of a report written by the Vatican Council for the Economy in May 2018.

In that report, Vatican officials express their “concern over the debt affecting the Holy See” and recommend the Pope be informed that “the deficit is recurrent and structural, has reached worrying levels [and is at] risk of causing insolvency if urgent actions are not undertaken”.

Nuzzi told EFE that Vatican prelates formed “a small committee… that was given 5 or 6 years to resolve the situation and save the Vatican, but the data has worsened”.

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The journalist added that the Administration of the Patrimony of the Apostolic See (APSA), which manages Vatican properties and other assets, reported a negative balance for the first time in history in the May/June quarter this year, with an operating result of -27% and a net balance of -67%.

One of the reasons for the great losses, Nuzzi explained, is that of the 4,000 or so properties the Vatican owns just in Rome, 800 are empty and some 600 are rented out free of charge or at nominal prices.

Rent in arrears on Vatican properties just in the Italian capital is also at 2.7 million euros, the journalist said.

Another reason for the black hole in Vatican finances is the “parallel book-keeping” in the city state with secret accounts for cardinals and front men covering for businessmen and politicians, Italian news agency ANSA said.

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Why it matters

Another focus of Nuzzi’s in his new book is ‘Peter’s Pence’, the donations and payments made by faithful around the world directly to the Vatican.

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Those donations have also been in the spotlight recently for allegedly having been used in the questionable Vatican purchase of luxury London real estate.

But Nuzzi said the problem goes beyond the transactions for which Vatican offices were raided and Vatican employees suspended at the beginning of this month.

The journalist explained that Peter’s Pence donations have been going down for several years, for which reason, according to Nuzzi, the Vatican no longer publishes official Peter’s Pence balances.

“Before, two euros out of every ten [of Peter’s Pence donations] went to the poor, now it’s only one”, Nuzzi denounced, adding that 58% of Peter’s Pence money now goes to paying Vatican salaries.

Nuzzi said that Peter’s Pence contributions overall have decreased from 101 million euros in 2006 to 51 million euros in 2018.

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What’s next

Though Nuzzi said he considers that the Pope is “determined to reverse the download slope” of the Vatican financial situation, he also admitted Francis attempts to date to clean up the Holy See’s finance have been like “putting a band aid on an aorta that’s bleeding out”.

Pope Francis’ reforms “haven’t been enough”, the journalist said, explaining that the Pope’s crusades have also been thwarted by curial officials “throwing spanners in the works”.

Nuzzi’s book could hardly come at a more delicate time for the Vatican, as a confidential report leaked last week from the Vatican’s anti-corruption authority revealed secret, off-the-books transactions in the Secretariat of State of over $700 million, mostly from Peter’s Pence donations.

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