In Vatican City on February 27, Pope Francis was facing strong opposition from some cardinals regarding how to address a growing deficit in the Vatican's finances before he was hospitalized for double pneumonia.
Just before his hospitalization, the Pope established a new "Commission on Donations for the Holy See" to boost contributions to the Vatican, which has an estimated 1.4 billion members.
This commission was formed following resistance within the Vatican's bureaucracy, where there was pushback against the Pope's proposals for budget cuts and seeking external funding to address the deficit.
Despite the Pope's efforts to manage the budget by reducing cardinals' salaries and calling for financial restraint, the deficit persists, with the latest available accounts from mid-2024 showing an 83-million-euro shortfall.
The Vatican has been grappling with financial challenges for years, exacerbated by a growing deficit and mounting liabilities in its pension fund, estimated at 631 million euros in 2022.
To address these issues, Pope Francis has suggested that Vatican offices consider seeking external funding to balance expenses or prevent staff reductions, eliciting concerns about potential conflicts of interest within the Church.
One proposed solution involves tapping into wealthy Catholic foundations in the U.S. and Europe for financial support, as well as encouraging donations from lay Catholics and other benefactors through the recently established commission.
In response to the financial strains, the Vatican may need to make tough choices such as restricting charitable activities or downsizing its diplomatic presence globally.
While the Vatican relies on various income sources, including donations, investments, and revenue from the Vatican Museums, challenges persist in filling the budget gap, despite expecting a surge in tourism during the upcoming Catholic Holy Year.
The Pope, considering selling off part of the Vatican's investment portfolio to address the deficit, faces the ongoing challenge of balancing immediate financial needs with long-term sustainability.