Vatican plans to cut spending for 2021 without hurting jobs and mission
ROME – Income deficits and a current budget deficit demand increased efficiency, transparency and creativity while working to continue to fully carry out the mission of the Universal Church, said the head of the Vatican’s economic office.
“A time of financial challenge is not the time to give up or throw in the towel, this is not the time to be ‘pragmatic’ and forget our values”, Jesuit Father Juan Antonio Guerrero Alves , Prefect of the Secretariat for the Economy, Recounted Vatican News 12th of March.
“Protecting jobs and wages has been a priority for us so far,” said the priest. “Pope Francis insists that saving money does not necessarily mean laying off employees; he is very sensitive to the fate of families. “
The prefect spoke to Vatican media as his office released a detailed report on the Holy See’s 2021 budget, which had already been approved by the Pope and made public on February 19.
The Vatican expects a deficit of 49.7 million euros ($ 60 million) in its budget for 2021, given the continued economic repercussions caused by the COVID-19 pandemic.
In an effort to give “more visibility and transparency to the economic transactions of the Holy See,” the Secretariat for the Economy had said that, for the first time, the budget would consolidate revenues and grants from the Peter’s Pence collection and funds.”
This means that the net proceeds of these funds were broken down when included in the calculation of the total projected income to approximately 260.4 million euros ($ 311 million), adding 47 million euros (56 million dollars) additional to other sources of income, which include real estate, investments and business activities. activities like the Vatican Museums and donations from dioceses and others.
Total spending is expected to rise to € 310.1 million ($ 370 million) for 2021, according to the report.
“The Holy See has an indispensable mission for which it provides a service that inevitably generates costs, which are mainly covered by donations,” said Guerrero.
When assets and other income are dwindling, the Vatican tries to save as much as possible, but then it has to turn to its reserves, he said.
There was a “series of years in which the donations received – including Peter’s Pence – did not cover the costs of this (Holy See) mission and, therefore, the reserves of funds accumulated over the years. previous ones have been exhausted, “he said.
“This reliance on Peter’s Pence reserves in recent years means that the fund’s liquidity is running out and with the current crisis it is very likely that in 2022 we will have to rely to some extent on APSA assets,” indicates the office that controls property and investments, he said.
Due to the economic crisis caused by the pandemic, Guerrero said, the Vatican has cut its budgeted spending by 8%, making it “the lowest in recent history for the Holy See.”
It is not possible, he said, to further reduce costs while fulfilling the mission of the Holy See, which depends heavily on human resources, especially in communications, which accounts for 22% of expenditure.
The apostolic nunciatures of the Holy See are the second highest expenditure with 20% of the budget, while 17% of the expenditure goes to the distribution of donations and contributions and 16% goes to support local churches in difficulty as well as projects. specific evangelism, according to the report. .
Father Guerrero said, “About 50 percent of the budget is staff costs,” which increases by 2 percent each year with cost-of-living adjustments, and protecting jobs and wages remains a priority.
Instead, he said, the Vatican was able to make substantial savings in 2020 and plans to continue doing so for 2021 by cutting spending elsewhere.
For example, last year the Vatican: Reduced consultation expenses by 1.5 million euros ($ 1.8 million); canceled all events, including ad limina tours, plenary assemblies, conferences, congresses and other events, saving approximately 1.3 million euros ($ 1.55 million); limited all travel, which saved 3 million euros ($ 3.6 million); stopped the purchase of furniture, saving 0.9 million euros (1.07 million dollars); and postponed non-urgent renovations, saving 4.8 million euros ($ 5.73 million), he said.
“At the same time, we anticipate that many of the revenue streams that have declined with the pandemic will be able to resume when the overall situation improves,” he added.
On the positive side, the Holy See has explored new opportunities that the new situation brings, he said, such as trying to be more creative and using video conferencing for meetings.
The Holy See will continue to try to save money and improve transparency “so that the faithful know what is done with their donations,” he said. “If this goes on for too long, we can only contain the deficit with the support of the faithful.”