Pope Francis’ final push to fix Vatican finances ends in crisis

The Vatican faces deepening debt and a looming pension shortfall as Pope Francis dies, leaving behind unresolved financial reforms.

The balcony of St. Peter's Basilica, where the new pope is expected to appear, is seen in Vatican City, Italy, on May 6, 2025. Photo by Beata Zawrzel/Nur

By Anna Fadiah and Hayu Andini

In the dim reception room of the Apostolic Palace, Pope Francis sat weak and breathless, facing a cherished image of Mary, Untier of Knots. The symbolism wasn’t lost on those around him: the leader of the Roman Catholic Church was trying to untangle the Vatican finances crisis before time ran out.

For over a decade, the first Jesuit and first Latin American pope had attempted to shed light on the Holy See’s notoriously opaque financial systems. But as he neared the end of his life, the numbers were worse than ever. The Vatican’s deficit had ballooned to three times its size since Francis took office in 2013. Meanwhile, its pension fund faced an estimated €2 billion shortfall—an existential threat for the smallest state in the world with global influence.

Reliance on tourists and prayers

Francis had long encouraged the Church’s leaders to embrace humility and fiscal discipline. Yet even his frugality-focused reforms could not cover the Vatican’s sprawling financial needs. A city-state with no taxes and a global mission now leaned heavily on ticket sales from its museums to fund everything from diplomatic missions to the famed Swiss Guard.

Seven million people visit the Vatican each year, but tourism alone was no longer enough. In February, just weeks before his death, the pope issued a chirografo, a papal directive, asking Catholics worldwide to increase their donations. Three days later, he was hospitalized with severe pneumonia. He died on April 21, leaving a financial time bomb for his successor.

Inheriting the Church’s earthly problems

Michael Czerny, a cardinal who led humanitarian work under Francis, admitted the sense of urgency now gripping the Curia. “Those of us who live and work here are all too aware,” he said, referencing the financial report presented to cardinals preparing to choose the next pope. “I am concerned because of the effects on our mission, our staff, our programs.”

Francis had once been that newly elected pope tasked with reform. In 2013, his mission was clear: root out corruption, bring transparency, and restore credibility to the Vatican's ledgers. But insiders say he quickly encountered a wall of resistance within the Curia. One of his early moves—appointing an independent auditor—triggered panic. Clergy reportedly moved funds to private accounts, stashed cash in bags, and resisted digitized bookkeeping. One nun still tracked expenses with pencil and paper. After suspicious break-ins and digital tampering, the Vatican’s police stepped in.

Scandal and sabotage

Pope Francis tried to modernize the Vatican’s financial system by inviting external auditors and financial experts. But many cardinals resisted reforms that would expose years of unchecked control. Workshops on expense oversight were met with derision, and some departments invoked national security to avoid scrutiny, especially regarding missionary work in authoritarian countries.

Despite his efforts, the Vatican’s financial problems only deepened. A €400 million real-estate deal turned scandal ended in 2023 with the conviction of a cardinal for fraud and embezzlement. Meanwhile, the Vatican’s pension fund continued to erode.

As the College of Cardinals convenes in the Sistine Chapel to elect a new pope, several delegates from major donor countries—including the U.S. and Germany—are pushing for urgent reform. But others argue that financial concerns should not outweigh spiritual leadership.

A system too sacred to sell

Despite its tremendous assets—Michelangelo’s Sistine Chapel, Caravaggio paintings, ancient Greek biblical manuscripts—the Vatican has refused to monetize its treasures. Most are listed at a symbolic value of one euro each, a gesture meant to preserve their religious significance. But the costs of upkeep, insurance, and preservation are immense, adding to the Vatican’s unsustainable budget.

The paradox is striking: a microstate rich in cultural and religious heritage but unable to meet its basic financial needs. Its population, composed mostly of clergy without families, would seem ideal for a pension system. Yet Francis warned last November that the fund would not be solvent in the medium term.

“The phrase I keep hearing is ‘five-alarm fire,’” said Ed Condon, editor of The Pillar, a Catholic news outlet. “Some very, very unpleasant decisions are going to have to be made.”

No taxes, no indulgences

Historically, the Church had plenty of revenue streams. In the Middle Ages, it sold indulgences, prompting Martin Luther’s Reformation. Until 1870, it taxed fertile lands across central Italy. But when Italy seized Rome, the Vatican was left with only its current 0.2-square-mile territory.

The Holy See then turned to its bank. The Vatican Bank became a powerful financial player, investing in European companies and enjoying tax-exempt status. However, secrecy and scandal soon followed. The 1982 death of Banco Ambrosiano’s chairman, Roberto Calvi—dubbed “God’s banker”—under London’s Blackfriars Bridge, remains one of Europe’s most mysterious financial scandals. The Vatican Bank eventually paid nearly $250 million to settle associated claims.

Crisis in the Benedict era

When Pope Benedict XVI assumed the papacy in 2005, the Vatican was already under scrutiny for its shady finances. He created an anti-money laundering unit and welcomed oversight from Moneyval, the EU’s financial crimes body. Despite progress, by 2012, Moneyval reported that the Vatican was still failing in nearly half of its compliance areas.

In early 2013, Italy’s central bank blocked all electronic payments to Vatican City. Tourists couldn’t use ATMs, and Church officials struggled to pay bills. Weeks later, Benedict became the first pope in six centuries to resign—citing health reasons, but also leaving amid mounting crises.

Francis’ early reforms

With his election in 2013, Francis began a bold financial reform campaign. He created a Secretariat for the Economy, led by Cardinal George Pell of Australia. The Vatican Bank brought in Jean-Baptiste de Franssu, a former Invesco executive, who purged thousands of suspicious accounts.

But as Pell pushed for tighter budgets and transparency, internal resistance intensified. His findings revealed that the pension fund was overexposed to real estate and underfunded. Without significant reform, liabilities would only grow.

Despite gains, the pushback persisted. Francis eventually shifted attention to social justice, climate change, and spiritual leadership. The financial problems, however, never went away.

A crisis deferred

Now, in the wake of Francis’ death, the Vatican finances crisis remains unresolved. One bank has cut ties with the Vatican Bank, citing weak anti-money-laundering compliance. Vatican officials interviewed by The Wall Street Journal expressed mistrust and fear of surveillance, some meeting in secret and demanding assurance against being recorded.

Their chief concern: a financial culture resistant to oversight. Their deeper worry: simple math. Without reform, the Vatican’s current economic model—based on voluntary donations, dwindling tourism revenue, and priceless but untouchable assets—is unsustainable.

The next pope will inherit more than spiritual responsibility. He will face an economic storm made worse by years of denial, secrecy, and the failure to prioritize the health of the Vatican’s finances.

Whether the Church will finally confront this long-festering crisis, or continue to pass the burden on to the next generation, now lies in the hands of the cardinals voting in the Sistine Chapel.