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Vatican denies book's allegations of impending default

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By Reuters
Vatican denies book's allegations of impending default

By Philip Pullella

VATICANCITY (Reuters) – The Vatican on Tuesday dismissed allegations in a new book that the Holy See risks default in the next few years because of falling donations, financial mismanagement and corruption.

The 350-page book, “Last Judgment,” is by Italian journalist Gianluigi Nuzzi, and is his latest on Vatican finances.

Nuzzi writes that years of deficits may leave the Vatican little choice but to declare default by 2023.

“There is no threat of default here. There is only the need for a spending review. And that is what we are doing,” said Archbishop Nunzio Galantino.

Galantino is head of the Administration of the Patrimony of the Holy See (APSA), a general accounting office that manages real estate holdings in Rome and elsewhere in Italy, pays salaries of Vatican employees and acts as a purchasing office and human resources department.

The archbishop told the Italian Catholic newspaper Avvenire that while there was “no need for alarmism,” the Vatican had to contain costs.

The world’s smallest state has no taxes. Its sources of income are from investments, real estate, collections taken around the world from faithful, contributions from dioceses and revenue from its highly popular museums.

Nuzzi said contributions from the faithful had fallen sharply in recent years, particularly in countries such as the United States hit by the sexual abuse scandal.

While Galantino challenged Nuzzi, saying parts of the book “sound a lot like the ‘Da Vinci Code,’” the Vatican is no stranger to financial scandals.

On Oct. 2, Vatican police raided two key departments, the Financial Information Authority (AIF) and the Secretariat of State, seizing documents and computers in an investigation into the purchase of a building in a posh neighbourhood of London for $200 million.

Five Vatican employees were immediately suspended and later the head of Vatican security resigned over the leak of a document related to the investigation.

The Vatican’s prosecutor is looking into possible crimes such as embezzlement, abuse of office, fraud and money laundering, according to people familiar with the search warrant.

The Vatican bank, known as the Institute for Works of Religion (IOR), was embroiled in several past scandals.

Only recently has it enacted sweeping reforms, such as closing accounts held by outsiders who had no right to hold them.

At a news conference presenting the book, Nuzzi said he was a great admirer of Pope Francis and wanted to highlight alleged mismanagement blocking him from enacting long-lasting reform.

(Reporting by Philip Pullella; Editing by Peter Cooney)