Subprime Hit Vatican

Vatican, Hit By Crisis, Leads Crackdown on `Slackers'

By Flavia Krause-Jackson

Nov. 4 (Bloomberg) -- For the first time in almost half a century, Vatican administration staff will clock in for work as part of a clampdown on slackers, a sign that the global financial crisis has also spread to the world's smallest state.

Timekeeping was scrapped in 1960 under Pope John XXIII. Starting Jan. 1, the practice returns. All Holy See employees will be given magnetic badges and forced to clock in and out in an effort to track their movements and ensure they're working a full day, said a Vatican spokesman who declined to be named.

``We can't afford any waste,'' Bishop Renato Boccardo, secretary of the Governatorate of Vatican City State, told La Stampa newspaper. ``There is a lot of work that needs doing, and the financial situation doesn't allow us to hire more staff.'' A spokesman confirmed the comments today.

The Vatican, located across Rome's Tiber River and home to Pope Benedict XVI, relies on earnings from $1 billion in stocks, bonds and real estate to top up donations from Catholics around the world. While the Holy See benefited in the 1990s from booming stock markets and a strong dollar, it plunged into the red in 2003 and again in 2007 because of the U.S. currency's tumble. The financial turmoil is now taking its toll as well.

`Worrying' Results

``The results from the first part of 2008 are worrying and don't inspire optimism,'' according to a Vatican document published on Sept. 26 by U.K. Catholic weekly ``The Tablet.'' Vincenzo Di Mauro, secretary of the Prefecture of Economic Affairs for the Holy See, declined to comment on the current state of the Vatican's finances.

The Holy See, the central administration for the Roman Catholic Church, swung into a deficit in 2007 because of ``brusque and accentuated inversion of the currency markets, above all the American dollar,'' according to a statement posted on the Vatican Web site on July 9. The combined surplus in the past three years was 15.2 million euros ($19.4 million).

The push for greater efficiency comes from the Administration of the Patrimony of the Apostolic See, which oversees the property owned by the Holy See. The source of the Vatican's wealth invested in the global markets dates to the 1929 Lateran Treaties, when Fascist dictator Benito Mussolini compensated the pope for the loss of the Papal States in 1870 with the reunification of Italy.

The Holy See, which according to its annual financial statement has 2,748 employees including priests and lay people, has also devised an evaluation system to reward hard workers and punish slackers, the spokesman said. According to the new measures, prolonged absences will result in pay cuts while virtuous employees can benefit from bonuses.

Vatican workers earn between 1,300 euros and 2,300 euros a month, according to La Stampa newspaper. In addition to their salaries, they also enjoy perks such as duty-free gas and subsidized housing.

(bloomberg.com)

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