Italy's financial crisis turns up heat on the Vatican

VATICAN CITY - With Italy facing the prospect of drastic cuts to balance its budget in the years to come, a growing number of ordinary Italians are criticising massive tax breaks given to the Roman Catholic Church.

A Facebook page set up by leftist campaigners in recent weeks asking the Vatican to help ease austerity in Italy has already collected 130,000 supporters. It asks for numerous exemptions given to the Church to be revised.

The Internet mobilisation is all the more striking since the subject is considered absolutely taboo for Italy's ruling class - both conservative and liberal - which is traditionally wary of criticising the Vatican directly.

One of the proposals being made by campaigners is that the thousands of properties owned by the Church - including vast tracts of prime real estate in the centre of Rome - should no longer be exempt from local housing tax.

Critics say that the properties covered by the exemption include highly profitable enterprises such as hotels and sports complexes.

Weekly news magazine L'Espresso reflected some of the bubbling anger with a headline in its latest issue reading: "Holy Tax Evasion".

"The law is not the same for everyone," the magazine said in its piece, accusing successive Italian governments of bowing to the bishops.

The Church also benefits from a yearly share of income tax that Italians can pay to it instead of to the state - the result of an agreement between former prime minister Bettino Craxi and the Vatican dating back to 1984.

Supporters say that the tax breaks are not as extensive as sometimes reported and are justified because the Catholic Church plays an important role in social welfare, complementing the role of the state.

Italian bishops have struck out against the criticism, with the religious daily Avvenire pointing to "an impressive political-mediatic campaign".

Avvenire said the scathing attacks were in fact a reaction against criticism from Catholic leaders about extensive tax evasion in Italy.

Angelino Alfano, the head of Berlusconi's ruling centre-right People of Freedom party, has also defended the Church saying "trying to penalise the Church is like harming the people who have the least defence."

The Vatican says the criticism is "disinformation" and has cautioned against confusing the assets of the Italian Catholic Church and the property of the Vatican, which is a sovereign state separate from Italy.

"Religious orders could claim that the exemptions allow them to carry out charity activities," commented Bruno Bartoloni, a Vatican expert.

But he added that eventually "the whole system has to be cleared up and the Church should show more solidarity with the tax contributors."