Published by Global Banking & Finance Review®
Posted on May 8, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GooglePope Leo XIV faces major challenges including financial woes, declining faith in Europe, and ongoing doctrinal debates.
VATICAN CITY (Reuters) -Pope Leo XIV, the 267th leader of the global Catholic Church and the first U.S. pontiff, will face a number of major challenges following his surprise election on Thursday. Here is a quick rundown.
BUDGET WOES
The Vatican, despite the late Pope Francis' cost-cutting efforts and financial management reforms, faces an 83-million-euro ($94.22 million) budget shortfall, two knowledgeable sources have told Reuters, and a much larger funding gap in its pension fund.
The pension shortfall was estimated to total some 631 million euros by the Vatican's finance czar in 2022. There has been no official update to this figure, but several insiders told Reuters they believe it has ballooned.
FAITH CRISIS IN EUROPE
While the total number of Catholics, as measured by the number of baptised, keeps increasing and has surpassed the 1.4 billion mark, mostly thanks to growth in Africa, Church attendance and priestly vocations are dwindling in Europe.
In Germany, the EU's most populous nation, the national bishops' conference reported earlier this year that only 29 new priests had been ordained in the country in 2024, an historic low.
They also said around 321,000 German Catholics had left the Church that year. The total number of Catholics in Germany, whose population of 83 million was once about half Catholic, is now under 20 million.
DIVORCEES, LGBT, WOMEN
Under Francis, tensions between traditionalists and modernisers erupted over whether the Church should be more welcoming towards the LGBT community and divorcees, and let women play a greater role in church affairs.
Francis did not formally change church doctrine, but opened the door to communion for divorcees and blessings for same-sex couples, although he did not allow a relaxation of priestly celibacy rules or the ordination of women deacons.
The debate over whether to consolidate, expand or roll back these reforms is likely to continue in the coming years, if not decades, forcing the new pope into some sort of balancing act between opposing demands.
CHILD ABUSE
The new pope is destined to continue grappling with the scandal of clerical sex abuse and its cover up, which has dogged the global Catholic Church for at least three decades, seriously undermining its standing.
Francis and his predecessor Benedict XVI committed themselves to a policy of zero tolerance, but their reforms have delivered at best partial results, with uneven implementation across different continents.
DIPLOMACY
Argentine Francis, the first pope from the so-called Global South, was not afraid to use his moral pulpit to ruffle Western feathers.
He spearheaded a controversial Vatican deal with China on the appointment of bishops, had fraught relations with Israel over the war in Gaza, and at times appeared to urge Ukraine to give up on its war of defence against Russia.
He was a vocal campaigner for action on climate change and a critic of tough European and U.S. immigration policies, putting himself at odds with U.S. President Donald Trump after he called Trump's plans to deport millions of migrants a disgrace.
Will the new pope be willing to continue in the same vein?
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(Reporting by Alvise Armellini and Joshua McElwee; Editing by Nia Williams)
The article discusses the challenges Pope Leo XIV faces, including financial issues and doctrinal debates.
The Vatican faces an 83-million-euro budget shortfall and a significant pension fund gap.
Debates over the Church's stance on LGBT, divorcees, and women's roles are ongoing.
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