Vatican-Israeli negotiators report progress

On June 14, the Bilateral Permanent Working Commission between the Holy See and the state of Israel met for another one of their innumerable meetings since the signing of their 1993 Fundamental Agreement. According to that agreement, the two were to legally settle issues surrounding legal and fiscal matters of concern to both parties within a time frame of about two years. 

But over the past 18 years it sometimes has seemed that the commission took the “permanent” part of its name too seriously, and the negotiations have dragged on. 

The June meeting was headed by Msgr. Ettore Balestrero, Vatican undersecretary for relations with states, and by Daniel Ayalon, Israeli deputy minister of foreign affairs. As with the countless other meetings, a brief joint communiqué was released after the conclusion of the meeting, which took place in the Apostolic Palace at the Vatican. But unlike previous statements, this one seemed to indicate that some headway had been made in the discussions.

‘Very significant progress’ 

“The negotiations took place in an open, friendly and constructive atmosphere,” the statement said, using what has become the expected key words after the meetings. But then it added the promising: “and very significant progress was made.” 

Could this be a sign that negotiations are finally heading toward the homestretch? 

Rabbi David Rosen, director of interreligious affairs for the American Jewish Committee who was a member of the original team that negotiated the bilateral agreement between the Vatican and Israel, said there were two issues that the bilateral commission was meant to resolve: fiscal matters and legal issues. A legal agreement was concluded five years into the negotiations but has never been ratified by the Israeli parliament, he said. He also said he has been told by sources that it now appears that reaching a financial agreement is close at hand.

Spirit of understanding 

“We are trying to find acceptable compromises,” Archbishop Antonio Franco, who took part in the talks and is the papal nuncio to Israel and apostolic delegate in Jerusalem and Palestine, told Our Sunday Visitor this month. “There is a kind of understanding with the Israeli delegation that we will work in good faith to try to understand the best possible compromise. If we want a compromise, we also have to compromise.” 

He added, “We would like to conclude the agreement, because there is plenty of pressure on part of the Israeli administration that it can’t go on like this.” 

As way of explanation for the extended length of the talks, the nuncio noted that the issues at hand are “complex” and deal with “long-standing traditions of religious institutions,” and the state of Israel is also trying to define its own system of law in relation to those matters. 

On one hand, the agreements must be something that the nonprofit religious institutions can withstand financially, while at the same time respect the needs of the Israeli government, he said. 

“I can tell you that we are trying our best in the spirit of understanding to (reach a compromise),” Archbishop Franco told OSV. It was a sentiment he emphasized several times during the interview. The teams are working “seriously and with dedication,” he said, and “with accuracy and with the spirit of trying to find a solution” in order to find the middle way. 

Although following the June meeting there was talk of possibly reaching a conclusion to the negotiations in another 18-20 months, Archbishop Franco said he could not commit to such a statement.

 “I don’t know. I am not a prophet,” he said. “There are so many factors that can influence the negotiations.”  

Skirting the question of whether he was satisfied with the pace of the talks, he told OSV, “you can be satisfied 1 percent or 10 percent or 15 percent.” 

Ayalon declined a request for an interview, but the Religious Department of the Foreign Ministry sounded an optimistic note, saying they were “seeing a very significant progress” in the talks. The department added that an agreement on the taxation issue is “almost 99 percent finished,” while a few issues on properties such as the Cenacle and Mount Zion still need more work. 

Recognizing canon law 

Although it is not clear why the Vatican has allowed the negotiations to drag on for so long or hasn’t insisted that the legal agreement reached five years ago be brought into Israeli law, one source who has followed the negotiations — and asked that his name not be used — noted that Israel’s reluctance to follow through on passing a binding law is likely based on concerns that it would mean recognizing the status of canon law under Israeli law, which could be seen as creating a new precedence of recognizing another legal system. Some Israeli legal minds are afraid that would set off a domino effect, the source said. 

A weightier element might be that the governments have been reluctant to bring the law up for ratification out of fear that it might create tension with Shas, an ultra-Orthodox Jewish party, and other religious parties, the source said. 

‘The pressure is on’ 

The current talks are tackling the issue of how much taxation religious institutions should be held responsible for paying. 

In 2002, Israel passed a law on the fiscal system of religious organizations in general, not just involving the Catholic Church, which historically has not paid taxes, Archbishop Franco said. 

However, the 1993 agreement between Israel and the Vatican had precluded that no taxes would be levied against Catholic institutions until an agreement was reached. 

“Until 2002 we were not paying anything, and after 2002 we are not paying anything; but the pressure is on from the government, which says we can’t go on like this. They say they have the law and want to enforce it fully,” said Archbishop Franco, who declined to share with OSV the specifics of the negotiations. “On our part, we understand we have to reach an agreement.” 

In addition, other aspects of the life of the Church, including property issues and social aspects of the Church — such as the eligibility of Church employees for social security — must be negotiated, he said. 

Rosen noted that originally, Zvi Terlo, who was one of Israel’s most prominent legal minds and who had been entrusted by the Foreign Ministry to lead the negotiations, had envisioned linking the fiscal agreement with the legal agreement once it was reached. However, this view was overruled by others in the finance and justice ministries and, therefore, the fiscal negotiations have had to be broken down into scores of different categories, dragging the negotiations out over a long period of time. 

“[Once an agreement is finalized] it will give a certain degree of security to the Church institutions, which they haven’t had until now,” Rosen said. 

He said that Israel was originally concerned that if an agreement was reached with the Vatican, other churches would ask to follow suit. However, he said, Israel has been de facto giving the Catholic Church all these exemptions anyway. 

“Secondly … in terms of financial state budgets, this isn’t even peanuts, we are talking about a trifle. So what is the big deal to be able to acknowledge legally in fact what has been the practice,” he said. 

Again, it seems that certain forces in the Ministry of Finance fear this would create another precedence. As a magnanimous de facto practice they could get away with it, Rosen said, but if it becomes law there are concerns that Jewish and Muslim institutions would also request similar exemptions, although that has not yet happened.

A different situation 

“How can you justify giving a legal exemption to Christians in a Jewish state that you don’t give to Jews or Muslims? The only answer is that even if this may appear to be an unfair privilege, it is what Israel agreed to,” Rosen said. 

In addition, he said, the Catholic Church is in a different situation than the other churches in that the Vatican is not only a Church but also a state. 

“You have an agreement between two states. No other church has a state structure and therefore there is [a basis] to making an exception,” Rosen said. 

Commenting on the long duration of the negotiations, he said, “There is no question [the Vatican] has treated Israel with great generosity.”  

Maybe the next plenary session, which is scheduled to take place on Dec. 1 in Jerusalem, will bring the commission one step closer to the conclusion of its work. 

Judith Sudilovsky writes from Israel.