THE Vatican suffered a record budget deficit last year amounting to £48 million, it was announced this week.
The full extent of the Holy See's financial plight became clear in a statement issued by the Church authorities in Rome. Income fell by nearly one fifth, from £70.5 million to £60 million, while the money raised for Peter's Pence, a fund once used for papal charities, had to be used to plug the gap.
But despite the size of the financial haemorrhage, the figures were not as bad as some observers had feared. Vatican belttightening accounted for an eight per cent drop in expenditure, which stood at £108 million.
The deficit was further covered by £2 million from the Vatican City State's fiscal surplus, and from sizeable contributions from unidentified Catholic institutions.
Plans to establish a pension fund for the Vatican's 900 retired employees had been abandoned for the time being, and pensions will continue to be paid from the operating budget, the statement said.
For years the Vatican has warned that unless worldwide giving increases the Holy See will be forced to sell off part of its investments to pay its way.