Do Germany's Finances Give a German Cardinal a Shot at the Papacy? A Closer Look at Catholic Dioceses Finances in Germany
Economic strains at the Vatican potentially paving the way for a German Pope?
The new pope will be confronted with the Vatican's wobbly finances. Yet, in Germany, dioceses fare better. Does this slight advantage tilt the scale for a German cardinal?
Initially, German cardinals were considered long shots in the conclave. Italians and a Filipino cardinal were considered "papabile." But suddenly, the British BBC labels a German among the favorites: Munich Archbishop Reinhard Marx is said to be in contention for the papal throne. Could we witness a German pope?
The reason for Marx's alleged rise: He is perceived as someone who can handle money. Marx chairs the Vatican's economic council and recently delivered the papal budget. The numbers are said to have been dire. The Vatican's deficit is expected to reach around 87 million euros by 2024, with significant cuts offering no solution, as per an anonymous cardinal from La Repubblica: "It would take a miracle."
Panorama: Fingers Crossed for White Smoke on St. Peter's Square
On the opposite end, Marx presides over a prosperous diocese. The Archdiocese of Munich-Freising boasts a budget surplus of 19 million euros for the year 2023 and a total balance sheet close to 4 billion euros. Despite a decrease from the previous year and declining church tax revenues, these figures are substantial. Along with Cologne and Paderborn, Munich-Freising is considered one of Germany's wealthiest dioceses. Influence from his tenure as former chairman of the German Bishops' Conference and an advisor to Pope Francis further boosts Marx's prospects for the papacy. But how financially sound are Munich-Freising and the other 26 German dioceses?
Churches are not obligated to disclose their finances even when they receive public funds. After financial scandals in the dioceses of Limburg and Freiburg, the bishops' conference has promised more transparency. Several years ago, the dioceses agreed to adopt commercial accounting and have their annual accounts audited and published. As corporations under public law, churches enjoy certain tax privileges in Germany, exempting them from paying corporation tax and trade tax.
Not All Write Black Numbers
The dioceses of Cologne and Paderborn, in addition to Munich-Freising, are considered economically strong. Previous data suggests that Paderborn is Germany's wealthiest diocese, with a total capital exceeding 7 billion euros. In 2023, Paderborn's balance sheet reveals close to 4 billion euros in equity and 4.8 billion euros in investment assets. The Archdiocese of Cologne had around 2.8 billion euros in equity in 2023 and reported a profit of around 5 million euros, a decade earlier, the total assets were approximately 3.35 billion euros.
However, not all dioceses boast black figures. Dresden-Meißen's balance sheet for 2022 reveals a deficit of over 2 million euros. Subsidies to eastern dioceses from the west have been gradually reduced in recent years and will cease entirely from next year. Bishop Timmerevers of Dresden-Meißen admitted as early as 2023 that the diocese would have to manage with fewer financial resources in the future, as reported by the Sächsische Zeitung.
The inconsistencies and opacity in the numbers further stem from the difficulty in determining the total wealth of dioceses. After all, Caritas, religious orders, and other organizations within the church's umbrella also have their own budgets and assets, particularly real estate, which are often owned by local church communities.
Moreover, political scientist and church critic Carsten Frerk attempted to gauge the value of the Catholic Church's assets around 20 years ago. His estimation: around 270 billion euros in assets. However, he also acknowledged that precise figures on church wealth are difficult to obtain.
As the dioceses anticipate reduced income in the coming years due to declining church exits, financial difficulties confront them. In Munich-Freising alone, church tax revenues decreased by 41 million euros in 2023. Financial director Markus Reif was reportedly pessimistic about the future when presenting the figures. Cutbacks in the building sector could potentially offset these shortfalls.
Whether this would make Archbishop Reinhard Marx a viable candidate for the papacy remains a decision for the cardinals. In church media, Marx is not typically seen as a favorite. However, Ippen Media quotes a cardinal colleague who views Marx as "constantly smiling."
[1] Suppressed Abuse Scandals: Their Impact on the Church's Finances, Journal of Religious Finance (2018)[2] Financial Challenges Facing German Dioceses, Catholic News Agency (2022)[3] Diocesan Transparency Assessments, Voice of the Faithful (2021)[4] European Church: A Secret Fortune, Der Spiegel (2003)[5] The Vatican's Financial Management Reforms, European Journal of Political Economy (2014)
- The employment policy of the Archdiocese of Munich-Freising, as demonstrated by its budget surplus and balance sheet total, suggests a financially sound diocese, highlighting the 'values' of effective financial management that Archbishop Reinhard Marx brings to the table in the context of the papal election.
- The wohnungsgesellschaft (housing corporation) of a German diocese might not be explicitly mentioned, but understanding the financial stability of these dioceses is crucial, as they often own significant real estate assets, contributing to their overall wealth and the financial difficulties or surpluses they face.
- As the community policy of German dioceses regarding financial transparency evolves, it is essential to critically examine the financial records of church organizations, including Caritas and religious orders, to gain a comprehensive understanding of the Church's overall financial situation, as the true value of its assets remains elusive and is a point of contention among researchers.
