From MICHAEL WILSON in ROME
The Vatican budget is in the,red and Pope Paul has ordered a drastic revision of expenses. This was revealed here when a letter from the Secretary of State, Cardinal Jean Villot was sent to all heads of Curia congregations and offices.
Also revealed was the fact that Pope Paul, presiding over a top-ranking board of administrative cardinals, had refused to approve the projected 1975 budget and had ordered it to be reviewed and reviied by a specially-appointed small commission.
Nevertheless, the Vatican has approved cost of living increases for the some 3,000 Vatican employees which makes the'process of improving the current "serious deficit" even more imperative.
Cardinal Villot's letter said that the new commission would consult with officials of the various Curial offices "to determine the exact personnel situation in relation to real work requirements aimed at the eventual reduction of the number of jobs and effecting suitable transfers to other offices which may have shown a greater need."
Vatican spokesman Prof. Federico Alessandrini stated that there would be no lay-offs or short-day weeks — at least that none were being contemplated at the present time.
This was confirmed by one congregation cardinal prefect who said that there would undoubtedly be a transfer of personnel from Curia offices to diocesan, religious or parish work.
The cut in expenditures is expected to centre on travel, office administrative expenses and the transfer of personnel to other employment.
Although Vatican finances, the extent of the budget and surpluses or deficits have never been announced, Cardinal Villot's reference to the Papal committee of seven cardinals as rejecting the 1975 budget indicated that the deficit was not merely one for 1974 but inure in the line of a "national debt" which could need borrowing to fund.
All Vatican personnel, from telephone operators and typists to cardinals, will receive an across-the-hoard cost-of-living increase amounting to 24,000 lire or some £16 monthly. Present salaries range from approximately £80 monthly for the telephone operators to approximately £480 monthly for a cardinal.
All Vatican personnel benefit, too, from the Vatican City State's peculiar situation as an independent Customs-free enclave. Petrol is less than half the Italian price. Food, liquor and cigarettes, as well as imported clothing and medicines, are sold at only slightly above cost.
Referring to the budget cuts, Prof. Alessandrini denied that these were connected in any way with reported Vatican Stock Exchange losses except in so far as the "normal depreciation" of the Stock Market affected income.
There have been reports that the so-called Vatican Bank, the Institute for the Works of Religion, had lost money when banks controlled by a Sicilian financier had failed, However, a member of the institute's board said that the losses "were only minimal."
Prof. Alessandrini further pointed out that the institute did not handle only Vatican accounts hut also those of hundreds of religious ord6rs.