A scandal has caused upheaval in the Vatican. The Pope has made the big decision to strip the Vatican’s most powerful office of its financial assets. It came after questionable investments squandered millions of dollars in church donations.
The scandal and the pandemic have now caused a more serious crisis for the Pope – a budget deficit.
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Pope Francis has cut the purse strings of the Secretariat of State – the executive arm of the Holy See. All of his financial holdings and real estate assets are moved to another office after a rather embarrassing scandal.
More than a year ago, the Vatican carried out an unprecedented raid. The target was the offices of the banking regulator. The trigger was the mismanagement of donations.
Reports say some of it was used to buy an expensive property in London for over 300 million euros ($ 366 million) – a price well above market value. The bill was inflated by middlemen by more than 100 million euros, according to a report. A careful examination of the accounts revealed several questionable investments. Reports say they happened without the supervision of central economic institutions.
Now Pope Francis appears to be taking matters into his own hands as he considers bringing in a committee of outside experts. They are expected to establish new financial and ethical guidelines. The Vatican is also seeking to tighten its belt as its coffers could dry up.
This year the Vatican faces a large budget deficit. For most of the years it has hovered between 60 and 70 million euros. This year, it could go up to 100 million euros.
The pandemic has hit church revenues. The collections of the Vatican City Museums tend to bring in more than 40 million euros. However, this year all museums have been closed for long periods of time due to the coronavirus and the Vatican has lost millions in revenue.
Pope Francis now faces his biggest test, as he was elected mandated to reform Vatican finances. However, this task has proven to be a major challenge over the past seven years.
Thanks to the retreat of the Vatican bureaucrats, now scandals have tarnished the reputation of the Catholic Church and the budget deficit is causing more embarrassment.
Last year’s budget deficit was filled with donations to the poor, with the deficit now expected to reach € 100 million. The Pope is sure to face difficult times.