ROME (AFP) – The Vatican warned on Friday that it had nearly exhausted its financial reserves from previous donations to cover the budget deficit over recent years, urging the continuation of donations from the faithful to keep the Holy See afloat and the service of Pope Francis.
The Vatican published its 2021 budget in its latest effort to increase financial transparency, amid an expected deficit of 50 million euros this year. The goal is to reassure donors that their money is being spent well, after years of mismanagement that are now the focus of a corruption investigation in the Vatican.
Francis’s Economy Minister, Reverend Juan Antonio Guerrero Alves, said the coronavirus pandemic, which has reduced donations as well as revenue from closed Vatican museums, will contribute to an expected 30% drop in revenue to € 213 million in 2021, from € 307 million. In 2019, the last year available.
He noted that the Vatican had made significant cost cuts during the shutdown last year, with significant drops in travel costs, consulting fees, conference and assembly costs, and postponing unnecessary property repairs and maintenance. In an interview with Vatican Media, Guerrero said he expects a further 8% expense cut in 2021, without resorting to layoffs, which Francis opposes.
But until then, the 50 million euros deficit projected for 2021 will once again require a drawdown in the reserves of previous donations to cover expenditures. Guerrero confirmed that in 2019, the Vatican used 27.2 million euros of Pence Peter’s reserves to cover operating costs, in addition to 53.8 million euros of revenue for the Peter Pence Fund that year.
In 2020, it is estimated that the Vatican has acquired 40 million euros from Peter Pence reserves and that a similar amount is expected in 2021.
Peter Pence’s money, usually given out during the annual gathering at Mass, is described as a tangible way to assist the Pope in his service and charitable work, but it is also used to manage the Holy See’s bureaucracy.
“This resort to Peter Pence’s reserves in recent years means that the fund is running out of liquidity, and with the current crisis, it is very likely that in 2022 we will have to resort to some degree to APSA assets,” he said. In reference to the Vatican Central Bank, which manages the Holy See’s estate and other financial investments.
Peter Pence’s money has come under scrutiny amid an investigation by Vatican Attorneys General into the Secretariat’s investment of 350 million euros in a real estate project in London, some of which was apparently funded by Peter Pence.
Several Italian brokers and merchants, as well as some Vatican officials, are under investigation on suspicion of robbing the Holy See millions of fees.