The Vatican has put into action in Switzerland its promise of “rigour, clarity and sobriety” in its finances.
– Centralisation of investments a key goal to weather post-COVID recession: Economy ‘Minister’
Rumours have been swirling for weeks that the coronavirus recession could put the Holy See at risk of default.
An internal memo of the Vatican Secretariat for the Economy revealed that officials were anticipating losses of up to 146 million euros in a worst-case COVID-19 scenario, but the Prefect of the Secretariat, Juan Antonio Guerrero, denied to Vatican News May 13 that the Holy See was heading for bankruptcy, even if he did admit there would be “difficult years” ahead in terms of finances.
“We must… understand what is and what is not essential”, Guerrero said last week, adding that in terms of spending and investments “our approach must be the maximum sobriety and the maximum clarity”.
“We had already decided, when approving this year’s budget, that expenses should be reduced in order to reduce the deficit”, Guerrero explained, affirming that “the post-Covid crisis forces us to do so more determinedly”.
Insisting that “we must be sober, rigorous… we must manage the finances with the passion and diligence of a good family man”, the Prefect for the Economy said that Vatican entities had been asked “to do everything possible to reduce expenses while safeguarding the essential services of [their] specific mission”, including centralising financial investments and improving personnel and procurement management.
In terms of those investments, Guerrero said the aim was “not only to centralise but to go about it professionally, without conflict of interest according to ethical criteria. It is not only that unethical investments are to be avoided, but that those investments linked to a different vision of the economy, to integral ecology, to sustainability are to be promoted”.
– Holy See merges nine Swiss companies into one
Proof that Holy See economic officials under Guerrero’s leadership are serious about centralising investments is the fact that the Vatican has now merged nine of the real estate and finance companies it owned in Switzerland into one single entity.
Those nine companies are the four of the Société Immobilière Florimont, which date from 1930, the three of the Société Immobilière Sur Collonges (1933) – all based in Lausanne – as well as companies SI Rieu-Soleil SA in Geneva (1973) and Diversa SA (1930) in Fribourg.
The nine are now united under the umbrella of Profima Société Immobilière et de Participacions in Geneva, which dating back to 1926 is the oldest Vatican holding in Switzerland.
According to an April 27 extract from the public Swiss commercial registry, the total value of the companies amounts to 46.6 million Swiss francs, or 44.2 million euros.
That figure, however, represents the companies’ historic worth, from the time Vatican officials invested in them money that in large part came from the compensations the Holy See received for the loss of the Papal States in the Lateran Pacts with Italy.
The significance of the Vatican company mergers in Switzerland is that now the Administration of the Patrimony of the Apostolic See, or APSA – the Vatican ‘central bank’ – has now concentrated its overseas investments in just three companies: Profima in Switzerland, Grolux Investments in the United Kingdom and Sopridex SA in France.
The mergers also mean fewer company directors and hence, lower costs.