Israel seizes Church funds, then rescinds move

June 08, 2009

Israel's finance ministry announced-- and then quickly rescinded-- a decision to seize Church funds in an apparent effort to force payment of taxes by Catholic institutions. The unexpected move by the Israeli government appeared to be a serious setback in relations between Israel and the Holy See. The quick reversal may indicate a conflict within the Israeli political leadership on the handling of negotiations with the Vatican.

The tax status of Church-owned institutions is one of the key considerations in continued talks between the two parties, which are aimed at producing a long-overdue agreement on the economic and juridical status of Church institutions in Israel. Vatican officials had expected the negotiations to resolve disputes about outstanding tax payments. By acting unilaterally to seize Church funds, the Israeli government appeared to be taking a tougher stand in those negotiations. Now Israeli officials indicate that the situation is unchanged.

Both Vatican and Israeli officials had indicated earlier this year that they hoped to finalize an accord before Pope Benedict's visit to Israel in May. The juridical agreement was promised as part of the "fundamental accord" between Israel and the Holy See that was concluded in 1993 and paved the way for Vatican recognition of Israel.

 

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Further information:

• Israel rescinds order to freeze Church funds in the Holy Land (AsiaNews)
• Ministry for Finance seizes Church funds. Holy See-Israeli negotiations at stake (AsiaNews)
• Church funds seized in the Holy Land. Custody delegate speaks out (AsiaNews)