Vatican in the black for the first time since 2000

Alina Trabattoni

The Holy See posted a surplus of E3.08 million last year, compared with a deficit of E9.6m in 2003, the Vatican’s financial statement shows. Total revenue rose to E205.7m and spending fell 5% to E202.6m.

“After three years of negative results, the year 2004 closed in the black,’ said Cardinal Sergio Sebastiani, head of financial affairs for the Holy See.

The Catholic Church, which promotes the faith in hundreds of countries around the world, relies on earnings from roughly $1 billion in stocks, bonds and real estate to top up donations from the almost E1 billion Catholics around the world.

The Holy See posted a profit of E6.1m from its financial investments, compared with a loss of E11.6m in the year-earlier period. “This can be attributed to the improvement in the financial markets which occurred in 2004,’” Sebastiani said.

The Holy See earned E1.8m from securities trading last year and cut its losses related to currency fluctuations by more than half to E15 million.

Profit from real estate rose 5% to E24.9m in 2004 as the Holy See sold properties, including some buildings that house Vatican staff.

Losses from the church’s “institutional activities”, which include religious services and those “for the benefit of humanity”, widened to E23.2m, compared with E19.7m the year before as costs increased and donations fell. Costs related to the services and for the promotion of “peace in today’s world” rose to E101.6m from E99.4m the year-earlier. Expenses gained as a result of higher personnel costs, which grew 9% in the period.

Donations from individuals fell 7% to $51.7 million as the stronger euro eroded the value of revenue from the US, the biggest single donor country to the Vatican, contributing more than 40% of all donations. Total donations, including revenue from Episcopal conferences and other religious institutions reached E73.3 million, virtually unchanged from the E73.4 million in 2003.

The costs of using technology to speak to the masses also increased. Losses at the Vatican’s media operations, which include Vatican television and Vatican Radio and the L’Osservatore Romano newspaper more than tripled to E4.3m.

The Holy See includes the curia, whose 20 councils and congregations set church doctrine and policy; the pope’s 118-embassy diplomatic corps, the Vatican’s radio station and Rome real estate used to house clergy.

Vatican City, the independent papal state in Rome, has a separate budget. Vatican City is the world’s smallest state and occupies half a square kilometre in central Rome. It mints its own euro coins and issues its own postage stamps, also denominated in euro. Pope Benedict the 16th was elected on April 19 to succeed Pope John Paul II.

John Paul II, who died April 2 at the age of 84, sought to improve the Vatican’s finances and make its accounting practices more transparent. When he became pope in 1978, he inherited a church that didn’t publish any details on its finances.