The Vatican announced today that its deficit in 1984 reached more than $29 million and is expected to grow even further this year.
The announcement came one day after the conclusion of a four-day meeting of a Vatican finance commission at which it was revealed that the Institute for Religious Works, the Vatican's bank, had paid off a controversial settlement in the Banco Ambrosiano scandal without touching other church resources or the bank's deposits.
Church and banking sources have said the Vatican paid off $241 million of debts incurred by the Milan bank for which the Vatican had offered letters of patronage.
The 12 cardinals attending the meeting said the budget for day-to-day administration of the Vatican city-state had shown a surplus last year, but they called for more support from Catholics around the world to help with expenses.
The cardinals announced that the 1984 deficit for the central administration of the worldwide church came to 58.4 billion lire, including the 14.4-billion-lire annual cost of running Vatican Radio, which has no independent source of revenue.
The cardinals said that the deficit had been covered primarily by "Peter's Pence" -- the Sunday collection-plate offerings of the worldwide church -- which last year brought in 55 billion lire, or about $26 million. The other 3 billion lire came from Vatican coffers, they said.
Today's statement projected a 1985 deficit of 63.3 billion lire, close to $32 million. It said "special attention" had been given to the possibility of reforms within the church's central government that could have "positive consequences in the economic field" but did not specify what they could be.
Church sources said that the substantial size of "Peter's Pence" indicated not only the extent of Pope John Paul II's personal popularity and the effect of his extensive travels, but showed that Catholics at large had paid little attention to the Vatican's reported involvement in the Ambrosiano scandal.
Banco Ambrosiano collapsed in June 1982 after inspectors turned up $1.2 billion in bad loans. Many of the loans -- to Panamanian and other Caribbean dummy companies -- had allegedly received the backing of the president of the Institute for Religious Works, Chicago-born Archbishop Paul Marcinkus. The Vatican was one of the Ambrosiano's largest stockholders. The Holy See denied any wrongdoing but agreed to pay for "moral" reasons.