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.
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.