The Economic Agreement between Israel and the Holy See concerning fiscal and property matters will clarify the legal and economic status of the Church and its institutions in Israel.

Communicated by Deputy Foreign Minister’s Bureau

Deputy Foreign Minister Daniel Ayalon left this afternoon for Rome, to take part in the Plenary meeting to continue the negotiations on the Fundamental Agreement between the Holy See and the State of Israel.  The Israeli delegation is comprised of experts from the Ministries of Foreign Affairs, Finance and Justice. The negotiations are the central issue on the agenda of Israel’s relations with the Vatican and the Catholic world, which numbers more than a billion followers, and are aimed at concluding an Economic Agreement concerning fiscal and property matters which will clarify the legal and economic status of the Church and its institutions in Israel.

The prolonged negotiations, which have been going on for more than a decade, are in the final stretch, following achievements that can be credited to the communication that the deputy foreign minister has been leading for the last few months. The goal is to try to reduce the remaining main differences of opinion, primarily regarding taxation and expropriation. The conclusion of the negotiations is expected to lead to an upgrade in relations and an improved standing for Israel in the international arena. 

Deputy FM Ayalon will take advantage of his visit in Rome to hold political and economic talks with his counterpart at the Vatican in which they will discuss important issues such as the Iranian threat, the fight against antisemitism and the delegitimization of Israel in the world, and the diplomatic process. If the subject of the Cenacle (Room of the Last Supper) is raised, he will reiterate Israel’s position on its sovereignty.

Among the topics in the Agreement that have been settled:
• An arrangement concerning taxation, after many years in which the Church refused to pay.
• An arrangement concerning the status of clergymen vis-à-vis the National Insurance Institute, their standing and access to the courts.
• Application of the right of expropriation to land belonging to the Church.

The core of the remaining disagreement relates to the six holy sites:
• They will enjoy certain exemptions from expropriation but not a sweeping exemption.
• Israel insists on its right to expropriation, for example, for the purpose of infrastructures.
• All elements of the Agreement will uphold the standing of Israeli law and Israeli sovereignty.