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Late last month, the Vatican announced that the pandemic had forced Pope Francis to postpone an annual fundraising campaign by Catholics around the world, Reuters notes.
The campaign’s delay of more than three months came at a particularly bad time, as other revenue declined, especially from the Vatican museums.
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The pandemic severely affected the Vatican’s finances, forcing it to draw on reserve funds and implement some of the most difficult cost control measures.
Against this bleak backdrop, the Vatican’s top administrators held an emergency meeting in late March, when they ordered a freeze on promotions and employment and a ban on overtime, travel and major events.
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An internal note seen by Reuters said the decisions, effective for the rest of the year, were made “to mitigate, at least in the short term, the serious economic impact … and to avoid further drastic measures.”
However, an April letter told department heads that, in accordance with the pope’s policy, he could not fire employees.
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The Peter’s Pence Fund, which raises around $ 50-65 million a year, aims to help the Pope’s activities and support charity projects in the world’s neediest areas. But for more than 30 years, the Holy See has been forced to use the fund to continue operations and cover the Holy See’s budget deficit.
At the same time, the pandemic has dramatically reduced funding received from the Vatican Museums, which had around 7 million visitors last year and are the city’s only source of cash.
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The museums, which generate around $ 100 million a year, have been closed since March 8 and will likely not reopen until the end of the month, resulting in a three-month loss of revenue.
Even after the reopening, officials fear increased security measures, social distancing requirements, new health regulations, and the expected lack of international tourists will erode ticket and souvenir sales.
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“Certainly we have difficult years ahead,” Father Juan Antonio Guerrero, the new head of the Vatican’s economy ministry, said on the official website of the Vatican News on Wednesday.
He estimated that the income of the Holy See will be reduced by 25 to 45 percent due to the coronavirus, depending on cost reduction measures.
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Another problem is that there is no indication of when the pope can resume activities that attract tens of thousands of people at once, such as religious holidays. Many pilgrims and tourists come to Rome mainly to see the Pope and leave donations at St. Peter’s Basilica, where there is no entry fee. But tourists pay to visit the Vatican Museums, which feature some of the world’s greatest masterpieces.
The deficit was also accentuated by the reduction of rents in the approximately 600 shops and offices in Rome that belong to the Vatican, during the epidemic.
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The Vatican has two budgets. One is that of the Holy See, the government of the Catholic Church, which is recognized as a sovereign entity in international law. It includes the central administration and embassies that maintain diplomatic relations with more than 180 countries. Income comes from real estate funds, investments, and contributions, such as Peter’s Pence. It has been in deficit for many years.
The other budget is for Vatican City, the state in the heart of Rome. It includes income from the Vatican museums and traditionally has a surplus. The surplus, as well as the contributions of the faithful and the profits of the Vatican bank, have been used for years to correct the deficits of the Holy See.
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The last year for which the Vatican released full budget figures was 2015, when the Holy See had a deficit of $ 13.1 million.
Since then, the Holy See has had annual revenues of approximately $ 293 million and expenses of approximately 347 million euros, leading to an annual deficit of approximately $ 54 million.
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