By NICOLE WINFIELD
VATICAN CITY (AP) -- The Vatican has registered one of its worst budget deficits in years, plunging back into the red with a (EURO)15 million ($19 million) deficit in 2011 after a brief respite of profit.
The Vatican on Thursday blamed the poor outcome on high personnel and communications costs and adverse market conditions, particularly for its real estate holdings.
Not even a (EURO)50 million gift to the pope from the Vatican bank and increased donations from dioceses and religious orders could offset the expenses and poor investment returns, the Vatican said in its annual financial report.
The Vatican said it ran a (EURO)14.9 million deficit in 2011 after posting a surplus of (EURO)9.85 million in 2010. The 2010 surplus, however, was something of an anomaly. In 2009 the Vatican ran a deficit of (EURO)4.01 million, in 2008 the deficit was (EURO)0.9 million and in 2007 it was nearly (EURO)9.1 million.
The Vatican city state, which mainly manages the Vatican Museums and is a separate and autonomous administration, managed a budget surplus of (EURO)21.8 million. That's largely due to a spike in revenue from the museums: More than five million people visited the Sistine Chapel and other works of art in the Vatican museums last year, bringing in (EURO)91.3 million in 2011 compared to (EURO)82.4 million a year earlier.
And the Vatican could also cheer that donations from the faithful were also up last year despite the global economic crisis: Donations from Peter's Pence, which are donations from the faithful to support the pope's charity works, rose from $67.7 million in 2010 to $69.7 million last year. That money, however, doesn't figure into the Vatican's operating budget, though contributions from dioceses, religious orders and the Vatican bank do.
The Vatican bank, known as the Institute for Religious Works, is able to make such a big contribution to the Vatican's budget each year based on investments.
Draining the Vatican's finances were the high costs for its main job of spreading the faith via Vatican media: Vatican Radio, the Vatican newspaper L'Osservatore Romano and Vatican television all have significant expenses and little or nothing in the way of revenue. Vatican Radio, however, is expected to save hundreds of thousands of euros a year in energy costs each year after it cut back short and medium-wave transmissions to Europe and the United States from its main transmission point in Rome.
The Rev. Federico Lombardi, who runs the Vatican radio and television departments and is also the Vatican spokesman, stressed that layoffs among the 2,832 Holy See personnel aren't in the offing, although he acknowledged that savings must come from elsewhere.
During the meeting of cardinals who oversee the Vatican's finances this week, he said, there was a "request for prudence and savings."
"I'm not an expert," he said of the deficit. "Yes, it's bigger than in past years, it's true." But he noted that the amounts on a global scale aren't alarming. "Certainly they indicate a need to pay attention and see the criteria the Vatican's assets are administered."