EU might try to audit Vatican for property taxes

The UK Times reports:

A row over alleged Vatican interference in Italian affairs has erupted after a demand by the European Commission for Italy to explain tax breaks for the Catholic Church on income from property.

A spokesman for Neelie Kroes, the Competition Commissioner, said Brussels had received complaints that the tax concessions amounted to illegal state aid. He said that the Commission was merely seeking information at this stage.

That was enough, however, to unleash a political storm in Italy over the role and status of the Church, with the Left accusing it of using its “privileged position” to impose a Catholic agenda on Italians with the connivance of the Right. The Right accused the Left – and the Commission – of “anticlericalism”. The Commission insisted yesterday that it had acted “not out of disrespect for religion but out of respect for EU law”.

... In a conciliatory gesture this week, Monsignor Karel Kasteel, a senior Vatican official, told La Stampa that “the Holy See is ready to sit down at a table with the Government to update the Concordat and revisit the tax issue”. But a Vatican spokesman played down the statement later, saying that Monsignor Kasteel had been speaking “in a personal capacity”.

The article concludes by noting that the Vatican's portfolio is worth an estimated $3bn.

Update: Coverage from ConcordatWatch (an entire website dedicated, it seems, to eliminating official treaties between the Catholic Church and sovereign countries) available here at National Secular Society, who gives the offensive title "At last – Vatican’s money-grubbing accords under scrutiny in EU" to what is, actually, a fairly objective article (at least from what I can tell).

I'm not quite sure where I fall on this issue, i.e., whether I agree with some folks that this EU audit is an example of anti-Catholics finding excuses to persecute the Church. ConcordatWatch certainly seems to be riddled with false facts and accusations. I certainly don't rule it out as likely.