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Spain Cuts Funding For Catholic Church

In a move that took many by surprise, the Spanish government has announced that it will cease paying a subsidy to the Catholic Church, which it is supposedly obliged to do under a concordat with the Vatican.

Deputy Prime Minister Maria Teresa Fernandez de la Vega made the announcement last week, which the government claimed was agreed to by the Spanish church. The Church, though, says it has not seen the proposals.

Under the new arrangements, the state will scrap the direct annual subsidy it has previously provided to the Spanish bishops’ conference, which last year totalled about 30 million euros (about £20 million). In exchange, the government raised the maximum tax deductible donation to the Catholic Church to 0.7 percent of a taxpayer’s income from the current 0.52 percent.

In addition, the church will lose its exemption from value-added tax (VAT) on purchases of goods and property, as required by the European Union, and will have to supply the government with an annual report to justify the spending of monies granted to them through the voluntary income tax levy.

While some press reports said that the church officials expressed moderate support for the plan, Reuters noted that Spain’s bishops’ conference said it would study the new financial plan before making any public announcement. The new measures will not affect the hundreds of millions of euros in payment to religious school teachers and in subsidies paid to maintain Spanish cathedrals.

The Spanish government separated formally from the Church under the 1978 Constitution, but it has nevertheless continued to finance the institution since 1979 under an agreement with the Vatican that allows taxpayers to contribute 0.52 percent of their income taxes if they choose. Since 1989, however, these contributions have not matched church spending, and the government has made up the difference with an annual lump sum payment.

Since taking power in April 2004, the government of Prime Minister Jose Luis Rodriguez Zapatero has had a stormy relationship with the Catholic Church, introducing legislation making divorce much easier, legalising gay marriage and eliminating the requirement that religion be an obligatory subject in schools.

The pope attempted to chastise Zapatero during a recent papal visit to Spain, but the Prime Minister shrugged off the criticism and then compounded the “insult” by not attending the Pope’s mass.