Conclusions of the Spanish Court of Auditors’ report on state aid for the Catholic Church

Conclusions of the Spanish Court of Auditors’ report on state aid for the Catholic Church

Spain’s Court of Auditors has approved the final version of its 2017 audit report on religious faiths. Sections 3.41, 3.42, 6.13 and 6.14 of the report show that the Catholic Church ran a surplus in fiscal years 2016 and 2017 and that, as we highlighted in question E-001091/2020, it used part of this surplus to fund a business entity: ‘In this respect, it should be noted that the 2016 and 2017 records pointed to the Church using its own resources from voluntary church tax contributions to provide EUR 20 million to a commercial entity that it controls, which could be subject […] to an analysis […] by the relevant authority.’

The Court of Auditors is open to the possibility of investigating the use of these funds, particularly to check whether the allocation ‘is in line with Article 107 of TFEU, taking into account the requirements laid down in the 27 June 2017 ruling (case C-74/16) and in Commission notice 2016/C262/01’.

On 08 October 2020, Spanish Members of the European Parliament (MEPs) Sira Rego and Manu Pineda of the Group of the European United Left – Nordic Green Left posed a written parliamentary question to the European Commission.

Spanish MEPs asked “does the Commission consider that the Catholic Church’s EUR 20 million contributions to a business entity could represent state aid?” and “will the Commission be launching an investigation into this matter?”

On 09 December, Executive Vice-President Vestager responded on behalf of the European Commission and reported that “there is currently no ongoing investigation by the Commission concerning the use of public funds in Spain to finance the Catholic Church”.

Executive Vice-President Vestager stated that “for a measure to be categorised as ‘State aid’ for the purposes of Article 107(1) of the Treaty on the Functioning of the European Union, all the conditions set out in that provision must be fulfilled”.

She further explained that “first, there must be an intervention by the State and through State resources”, “second, it must confer a selective advantage to undertakings” and “third, the measure must be liable to affect trade between Member States. Fourth, it must distort or threaten to distort competition”

In closing, Executive Vice-President Vestager underlined that “contributions or donations made by private organisations cannot in principle constitute state aid where these actions are not imputable to the State and do not imply the use of State resources” and “entities that receive support from the State in respect of religious and other non-economic activities need to ensure that this support only concerns their non-economic activities and that no advantage is transferred to other activities of an economic nature in which the entity may be also engaged”.

Source: https://www.europarl.europa.eu/doceo/document/E-9-2020-005531_EN.html

Photo Credit : https://pixabay.com/photos/church-pews-benches-altar-church-2401405/

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