How the Vatican manages money and where Pope Leo XIV might find more

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FILE - A flag from the United States waves from the crowd as Pope Leo XIV appears at the central balcony of St. Peter's Basilica for his first Sunday blessing after his election, in St. Peter's Square at the Vatican, Sunday, May 11, 2025.(AP Photo/Bernat Armangue, File)

VATICAN CITY – The world's smallest country has a big budget problem.

The Vatican doesn’t tax its residents or issue bonds. It primarily finances the Catholic Church's central government through donations that have been plunging, ticket sales for the Vatican Museums, as well as income from investments and an underperforming real estate portfolio.

The last year the Holy See published a consolidated budget, in 2022, it projected 770 million euros ($878 milli