What do Pope Francis’ latest financial measures mean?

Pope Francis general audience Pope Francis speaks during his weekly general audience on Ash Wednesday Feb. 22, 2023. | Daniel Ibanez/CNA

A new rescript from Pope Francis will mean an increase in the cost of housing for senior Vatican officials, a belt-tightening measure that is part of a broader effort to centralize the assets of the Holy See.

Dated Feb. 13, the rescript was not published in the bulletin of the Press Office of the Holy See but was instead pinned up inside the Vatican, where it was photographed and published for the first time in the blog Messa in Latino, and soon after publicized by Vatican News.

The document explains that Pope Francis has decided to abolish “any arrangement for the use of free or advantageous lodgings for cardinals, heads of dicasteries, presidents, secretaries, sub-secretaries, managers, and equivalents.” The prices of flats intended for other employees would not be affected.

Relatedly, on Feb. 20, Pope Francis reiterated in a motu proprio titled “The Native Law” that the assets of the Holy See belong to the Holy See. Prior to this, various Vatican entities have had complete autonomy over how they allocate and manage buildings. Now the pope has established, by law, that the management belongs solely to the institution of the Holy See, further centralizing the control of finances.

On the one hand, Pope Francis continues his fight against ecclesiastical privileges. But, on the other hand, he strikes a Vatican system that, albeit with limitations, had the advantage of making work in the Holy See accessible to all.

The rescript of Feb. 13

The rescript of Feb. 13 came following a hearing granted to the prefect of the Secretariat for the Economy, Maximino Caballero Ledo.

The motivation for the decision, the document explains, is that of “meeting the growing commitments that the Holy See is facing for the fulfillment of the service of the universal Church and the needy” and, therefore, the need to “reserve to the Apostolic See more resources also by increasing the revenues of the real estate management.”

Apartments can no longer be for office use or outside the market price. It is also added that “the proprietary institutions will have to apply to the aforementioned subjects the same prices applicable to those who do not have an office in the Holy See or the Vatican City State.”

Exceptions can only be authorized by the pope, which makes every decision highly centralized.

Pope Francis’ choice affects a Vatican system that was born precisely to allow everyone — employees and department heads — to work in the most dignified way possible.

There are about 5,000 Vatican employees, split between the Vatican City State administration and the Holy See. They all receive a salary, which is generally modest. In the Vatican, there are 10 levels of remuneration, ranging from 1,300 euros per month for the first level to approximately 2,400 euros per month for the 10th level, which can be increased by 250 euros based on merit.

The cardinals of the Roman Curia currently have a remuneration of between 4,500 and 5,500 euros a month, which includes the 1,500 euros of the “cardinal dish” (“piatto cardinalizio”) due to every cardinal in the world. A bishop or archbishop head of a dicastery receives between 3,000 and 4,000 euros.

The reasoning is that these salaries could afford a market-priced rent. In reality, the Vatican apartments, especially those traditionally intended for dicastery heads or cardinals, are large in size, prestigious, and, in any case, in expensive areas. In many cases, it would take an official’s full salary to cover the full-market price.

For the Holy See, however, the important thing is that everyone could have the opportunity to work in the Vatican. Hence, the controlled price system is favored because the small Vatican City State has no taxes. Therefore, the employees have a net salary without taxes.

Responses to the economic crisis

The move is not the first tightening of Vatican finances under Pope Francis. In 2021, the pope established that, starting from April 1 of that year, the remuneration paid by the Holy See to the cardinals be reduced by 10%, while the income of the other superiors was trimmed by 8%. There was also a further 3% cut for salaries for clergy and religious in the 10 functional and non-management levels. Furthermore, seniority increases were also suspended until April of this year.

More in Vatican

The provisions did not apply only to the institutions of the Holy See but also to the Vicariate of Rome; to the Chapters of the Vatican, Lateran, and Liberian Papal Basilicas; to the Fabbrica di San Pietro; and to the Basilica of San Paolo Fuori Le Mura.

In August 2021, Pope Francis decided to abolish the “token” (a sort of refund/salary) intended for members of the Chapter of St. Peter’s if the members of the chapter already had a salary or an income.

The Holy See real estate

How many properties are owned by the Holy See? The Administration of the Patrimony of the Apostolic See (APSA), which now has the entire administration of the Holy See in its charge, administers 2,400 flats and about 600 offices and commercial premises. The overall value of the Holy See real estate is estimated to be between 2 billion and 3 billion euros.

Seventy percent of the APSA houses are assigned to employees of the Holy See at a rent generally 40% lower than the market value of rental housing in the same areas. The remaining 30% is instead rented to outsiders who request it at a monthly rent 15% lower than the apartment’s market value.

The other Vatican body that manages real estate assets is the Congregation for the Evangelization of Peoples, the ancient Propaganda Fide. According to estimates, the dicastery owns about 500 apartments in about 60 buildings, managed so far independently by the central administration of the Holy See. They are rented at market price, according to a 2015 dicastery release. It should, however, be noted that the renovation costs of the buildings, when there are any, are borne by those who live there and that the property then returns to the availability of the Holy See.

How heavy is the economic crisis?

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The lay employees of the Vatican are organized into an association with a dedicated and constantly updated website. One of the last posts said that the basic salary is being revised upward, with a maximum ceiling of 5%. However, the employees complained that the percentage did not consider the rent increase.

The APSA had notified several employees — with a registered letter dated Dec. 15, 2022 — that the rent would be adjusted to inflation, which varies from 8% to 10%. Therefore, the salary adjustment could not cope with the rent increase. Now, the tightening that concerns the heads of departments could have the same effect.

Will there be a future in which the Vatican secretary of state no longer lives in the Apostolic Palace? And how much should he pay in the lease? Or will some particular situations be part of the exceptions?

These are questions that remain open. However, the Vatican’s need, first of all, to accumulate capital should be noted. The annual budget has not yet been published — it usually happens at the end of July or the beginning of August — but there is already talk of a forecast of a liability that goes beyond 200 million euros.

Also adding to the expenses of the Curia was the crisis of the Institute for the Works of Religion (IOR), commonly known as the Vatican Bank.

Even the collection of Peter’s Pence was not optimistic. According to the numbers released on June 16, 2022, Peter’s Pence earmarked 55.5 million euros in 2021 to support the activities promoted by the Holy See in carrying out the apostolic mission of the Holy Father, and 9.8 million euros were instead allocated to projects of direct assistance to the needy. As a result, Peter’s Pence spent 65.3 million euros, only partially covered by funding, which settled at 46.9 million euros.

The measures, therefore, are designed to resolve a liability that promises to be very heavy. At the same time, however, they risk throwing the Vatican system into crisis. Who will ultimately be able to lead a dicastery? Who is supported by an excellent economic situation (personal or the result of donations), and who will have the pope’s approval to control expenses? Or, at the very least, this could be the case if there are no adjustments made to these latest decisions.

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