The secret Catholic billions
Pope Benedict's pronouncement that the global financial crisis is proof that the pursuit of money and success is pointless will long rankle in the public mind as sounding a bit like Nero fiddling while Rome burned.
This lofty papal counsel was given by the scholarly leader of the Catholic Church in the course of an address to the world's bishops who are in Rome for a month-long discussion of the Bible.
But Benedict's otherworldly comment that wealth means "nothing" caused eyebrows to be raised by many prelates who are profoundly concerned about the freefall on Wall Street and the world money markets.
Many an episcopal mind focused less on the story of Genesis than on how the current credit crunch is affecting their investment portfolios that are needed to run their dioceses, parishes, church schools, hospitals and charities. It was little comfort for such mammon-minded rulers to hear Benedict admonish people to recognise that seeking success in career or money was like "building on sand".
As Benedict gazed in awe at Michelangelo's Pieta and Raphael's frescoes, and ambled back to the cloistered grandeur of his apartment in the renaissance Apostolic Palace, "God's bankers" in the nearby Vatican Bank and its money managers in the equivalent of the Department of Finance were tracking the money markets with the same unholy frenzy as our Central Bank and Merrion Street mandarins.
While it is the duty of a Pope to preach against the vanity of worldly possessions, the Vatican has not been built on Tiber sand but on the principle summed up by Bob Dylan in the lyric: "money doesn't talk, it swears".
Throughout history, the mystique and power of Rome has been built as much on the material as on the spiritual. For centuries the Borgia, Medici and Renaissance Popes transformed Christianity's origins from a humble stable in Bethlehem into the opulent vastness of St Peter's Basilica with its priceless art treasures.
It was the sale of indulgences to fund such grandeur that led Martin Luther to spark off the Reformation and divide Christendom. It was not until 1870 that the Popes lost their huge estates when Italy unified as a nation and they retreated as "Prisoners of the Vatican" into today's small independent City State of 108.7-acre enclave within the city of Rome.
Although Pope Pius IX lost his temporal power, he acquired greater moral authority with the declaration of papal infallibility.
With enhanced moral authority came even more wealth. A political settlement with the Mussolini government in 1929 recognised the Vatican's sovereignty and paid the Vatican $92m in compensation for the loss of the Papal States.
The windfall was used to buy gold and securities. The Vatican's art treasures were assigned the nominal value of one lira, and its gold hoard was deposited in the vaults of the Federal Reserve Bank of New York.
During the Second World War, Pope Pius XII was bankrolled by Cardinal Joseph Spellman of New York and donated massive amounts to relieve war-time suffering and natural disasters.
However, in the 1980s, the Vatican's involvement in shady financial deals came to light with the collapse of the Ambrosiano Bank and the discovery of the body of the banker Alberto Calvi hanging from a rope on London's Blackfriars Bridge. This prompted Pope John Paul II to take the first steps towards making Vatican finances more transparent and accountable.
It was not until 1994 that the first ever audit by an external body, Price Waterhouse took place. The Holy See's financial statement for the 2006 fiscal year showed a surplus of €2.4m, but this was chalked up as a loss compared with heftier surpluses of €9.7m in 2005 and €3.1m in 2004.
Its investments, however, "showed an increase of €13.7m compared to the €43.3m in 2005". In spite of this shift to more openness, Vatican finances remain complex and difficult to fathom. The Vatican comprises two separate administrations, the City-State and the Holy See.
The Vatican City-State is a money-spinner. It provides municipal services for the world's smallest sovereign nation, runs the Vatican Museum and supervises the 200-man security service of spear-carrying Swiss guards. Tourism is a bonanza, with millions of visitors annually flocking to the Vatican Museum and buying Vatican stamps, coins and pious pictures. It mints its own euro coins.
The Holy See is the body that spends the money. It is responsible for the funding of the papal civil service (the curia), whose 40 commissions, including councils and congregations, set church doctrine and policy; its 116 embassies across the world; Vatican Radio; and the weekly newspaper Osservatore Romano. In recent decades papal trips around the world have been a burden on the papal purse.
The Holy See owns more than 30 buildings in Rome and elsewhere in Italy, many in superb locations. But many of those buildings are rented at very low rates or are used for church housing.
Some properties produce no income at all, such as the Bambino Gesu children's hospital in Rome and the Accademia, a huge 17th- century building that serves as a school for Vatican diplomats.
The Vatican Bank is known as the Institute for Good Works (Instituto per le Opere di Religione). Founded in 1887 to help the Pope manage his finances after the loss of the Papal States, it operates in dollars, but its expenses are mostly in euro.
It lends money at special rates to dioceses and religious orders all over the world for the construction of schools and churches. It generates income by placing deposits in short-term government securities and in accounts at other banks.
The Administration of the Patrimony of the Holy See (APSA) is the Vatican's Department of Finance. From inside the Curia it handles the Vatican's investments that provide revenue for the Pope and the Vatican civil service to carry out the administration of the universal church.
APSA examines the budgets of the various branches of the Curia and advises on the Holy See's investments in stocks and real estate, as well the management of its personnel.
Although it is impossible to put a figure on just exactly what the Vatican is worth, the one sure thing in the present financial turmoil is that while Pope Benedict is reading his Bible, God's Bankers are praying that its wealth is not draining away into the Tiber.
