Church given €1 million in new stocks in ongoing property negotiations

Aqra bil-Malti

The government has issued over €1 million in new stocks to the Church as part of ongoing negotiations on the revision of a 30-year-old agreement on the transfer of Church property to the State.

Through a legal notice issued without any publicity a few days ago, the Finance Ministry approved the issue of €1.1 million in government stocks in the name of the ecclesiastical authorities, with a privileged dividend of 7% per annum – a much higher rate than current market offerings.

At the same time, the government declared that the new stocks shall be redeemed at a premium of 10% over the nominal value in ten years. This means that for every €100 paid to the Curia through these stocks, the ecclesiastical authorities will be paid €110 in 2034, apart from the annual 7% interest.

A spokesman for the Finance Ministry told The Shift that this legal notice was issued as part of crucial and ongoing negotiations with the Church over the revision of the 1991 property agreement.

“The legal notice is in line with the provisions of the Ecclesiastical Entities (Properties) Act, whereby any difference that might result between the total nominal value of the bonds issued to the Church at the time of the agreement dated 28 November 1991 between Government and the Holy See and the value of the property actually transferred to the State (at several points since the agreement was signed and pari passu as the properties get valued and their value is compared to their original estimate) shall be made good by the Government through the issue of bonds of the same tenor (7% minimum), together with the interest due from the date of the agreement.”

So far, both the Curia, headed by Archbishop Charles Scicluna and the government have remained tight-lipped over the secret negotiations held since February 2023.

No details have been given on whether a final settlement has been reached and what the revision will mean to taxpayers. The lack of transparency in these negotiations is a cause for concern. It is not even clear whether the negotiations are still ongoing.

Questions sent to both the government and the Curia remained unanswered.

In 1991, under the Fenech Adami administration, an agreement was reached between the Maltese ecclesiastical authorities and the government to transfer all the Church’s property to the State, with a few exceptions.

The Church was the beneficiary of massive, accumulated property wealth, mainly through donations by followers, primarily through their wills.

In return, the Maltese government agreed to start covering all the costs related to the running of the Church schools (€108 million in 2023), a significant compensation in government stock to 99 ecclesiastical entities and a mechanism whereby the State passes part of the proceedings from the eventual sale of property back to the Church.

The latter mechanism, including the amount of compensation, ended in 2023 – after 30 years – and is now the subject of the ongoing negotiations for its revision.

The Curia has always refused to state its expectations for this revision.

A champion of social issues upon his appointment in 2015, Archbishop Charles Scicluna has lately been criticised for his silence on major issues, including corruption, exploitation of foreign workers and increasing poverty.

Many believe the Archbishop’s sudden change of attitude has to do with the millions of government funds awarded to the Church during the past years and the ongoing negotiations on revising the 1991 property deal.