The Vatican’s recent financial reforms have the common good – not just efficiency – as their end, said an economist on the Holy See’s financial council.
“With a more efficient system, with the elimination of waste, we would be able to release more funds which can go for the poor and which can go for the marginalized to be able to build more hospitals, to build more educational facilities,” said Joseph Zahra, a Maltese economist who serves on the Holy See’s Council for the Economy, at a Feb. 4 presentation at The Catholic University of America in Washington, D.C.
“It’s not just we need to have a more efficient system,” he continued, “there is ultimately a return out of these reforms.”
Joseph F. X. Zahra, a top advisor for and architect of the Vatican’s recent financial reforms, formerly directed the Central Bank of Malta and headed the Bank of Valetta. He is currently vice coordinator of the Holy See’s Council for the Economy – their “finance cabinet” as he described it – and is the highest-ranking lay person on the council.
Zahra spoke on Pope Francis’ financial reforms at the Vatican and how they reflect his calls for a reform of the global economic system.
Pope Francis has insisted that the economy must be at the service of the common good, Zahra explained, but as a man of action, he wanted to put his words into action.
Ultimately, he introduced changes in the Vatican Curia to ensure that “a higher level of efficiency in administration, better allocation of resources in administration, a higher level of professionalism in the way things are done would ultimately give us a return which has a direct impact also for the common good,” Zahra explained.
In 2013, Pope Francis created an investigatory commission to examine the Holy See’s administrative structures, the “Commission for Reference on the Organization of the Economic-Administrative Structure of the Holy See.” On it were seven lay experts, one clerical secretary, and external consultants.
The members worked from August of 2013 until May of 2014 and made recommendations to ensure greater simplicity, transparency, integrity, and accounting standards within the Vatican.
Two members of the commission were later arrested in 2015 for stealing and leaking confidential information about Francis’ papacy. Pope Francis, however, was insistent that the financial reforms continue. “This sad fact certainly does not deter me from the reform efforts which we are pushing forward with my collaborators and with the support of all of you,” he told pilgrims in St. Peter’s Square Nov. 8, 2015.
In his Feb. 2014 apostolic letter “Fidelis Dispensator et Prudens,” the Pope announced structural changes in the Curia.
He created the Council for the Economy, a “finance cabinet” of eight cardinals and seven lay experts. He established the positon of Secretariat for the Economy which is akin to a country’s Minister of Finance, Zahra explained. The Pope also created the Office of Auditor General, an autonomous office with the power to conduct special investigations.
With these actions, he explained, the Pope wanted to emphasize the universal Church through universal representation within the Roman Curia, not just a heavily Roman or European representation.
He also wanted to incorporate technical expertise from lay financial experts, to update the Vatican’s accounting to modern international standards.
The ultimate goal, Zahra explained, is that greater efficiency and transparency with the Vatican’s finances will yield higher gains and ultimately benefit the common good. The Vatican Bank reported $75.5 million in net profits in 2014 after only $3.2 million in profits in 2013 largely due to the costs of the reforms.
Pope Francis could then, with approval of the bank’s commission of cardinals, dispense the majority of the profits to charities.
The Pope is so concerned about the global economy – and the Vatican’s finances in particular – because he has taught that the human person is at the heart of the economy, Zahra explained, and that behind the recent economic crisis was an even greater “human crisis.”
“What saddens the Pope,” Zahra said, “is really also the monstrosity of social decay, the monstrosity of poverty, the marginalization which is…most of the time the result of human abuse of the way we do economics.”
These economic abuses are reflected in decision-making of both business owners and consumers -- “greed, selfishness, dishonesty, lack of transparency,” he listed. When these abuses are rampant, the dignity of the human person is discarded or marginalized.
This leads to what the Pope has called “an economy of exclusion and inequality” where many persons are unable to put their God-given talents to use for the greater common good because they are either unemployed or exploited by their employers.
“We all have our own talents, and different talents. And if these talents are not being used or are not being given the opportunity to use them,” he explained, “then what you end up with is really a situation of misery.”
The solution to this is “solidarity,” he insisted, an economic system which is rooted in human dignity and that empowers everyone to become “artisans of their own destiny.”
In a free market that is ordered to the common good, people are able to put their talents and creativity to use for society through work and innovation, he said. The common good, he clarified, is not just the good of today’s society but the good of future generations.
This responsibility for the impact our decisions have on future generations was highlighted in Pope Francis’ recent encyclical Laudato Si, Zahra explained.