How the Catholic Church ended up with its own sovereign state

Australia Broadcast Center

18-05-2025

On Sunday May 18, world leaders and high-profile clergy attended the inaugural mass of Pope Leo XIV in Vatican City.
Catholics around the world watched the proceedings, which were televised live.
After a formal procession, the new pope was presented with the pallium — a special garment reserved for the highest clergy — and the papal ring to mark the beginning of his pontificate.
There has been much speculation about how Pope Leo will lead the church and address pressing issues like climate change, global conflict and social politics. He has already spoken out about "lasting peace" in Gaza and Ukraine, and warned of the dangers of AI.
But he isn't just the leader of the Catholic Church. He's also the head of the Holy See, the central governing body of Vatican City.
The territory is home to almost 900 people and covers 0.5 square kilometres. But the world's tiniest sovereign state may have a significant role to play in years to come.
According to Catholic belief, in the first century AD, the apostle Peter was martyred and buried at Vatican Hill, a small hill on the west bank of the Tiber river.
After Christianity was legalised in the Roman Empire in 313 AD, a shrine and a church were built to honour Saint Peter and it became a site of worship and pilgrimage for early Christians.
Following the fall of the Roman Empire in the fifth century, Christian clergy started to amass power and influence. This led to the formation of the Papal States, a group of territories on the Italian peninsula, which were governed by the pope of the day.
"That situation lasted more or less from about 800 AD until about 1870, which is when Italy became a united nation for the first time," explains Shaun Blanchard, a lecturer in theology at the University of Notre Dame.
In its quest for unification, the state of Italy wasn't too comfortable with an independent political nation in its midst.
War ensued until the Kingdom of Italy prevailed and named Rome as its capital.
"From about 1870 until 1929, the pope was known as 'the prisoner in the Vatican'," Dr Blanchard says.
"This was a bit melodramatic because he wasn't really a prisoner, but he was very, very upset about this new political reality."
In 1929, Pope Pius XI negotiated with the King of Italy, Victor Emmanuel III, and Prime Minister Benito Mussolini to recognise the Vatican's independent sovereignty.
The pope is the ruler of both the Vatican city state and the Holy See, the supreme body of government of the Catholic Church.
Beneath him is the Secretary of State, who holds an important political and administrative role. Since 2013, this role has been held by Italian cardinal and a reported papal frontrunner Pietro Parolin.
Day-to-day governance is handled by a central administrative body called the Roman Curia, divided into dicasteries, which are "kind of like the pope's cabinet".
"[Dicasteries] are various offices that oversee different elements of the church's spiritual, humanitarian and political mission," explains Dr Blanchard.
The pope's involvement in the Holy See has varied over the past century, depending on his interests and experience.
Pope Francis, for example, prioritised evangelisation — spreading the message of Jesus around the world — whereas his predecessor, Pope Benedict XVI was more interested in the traditional doctrines of the church.
Upon the death or resignation of a pope, all heads of dicasteries must resign, with the exception of those essential to regular operations of the Vatican.
It remains to be seen how Pope Leo will organise his cabinet and who he will appoint to key roles.
The Vatican has its own telephone system, post office, gardens, astronomical observatory, radio station, banking system and pharmacy.
Home to iconic architecture, museums and archives, it attracts pilgrims and tourists from around the world, especially during jubilee years. In 2023, the Vatican Museums welcomed 6.8 million visitors.
The state is defended by the world's smallest army: the Swiss Guard, an elite unit of Swiss soldiers responsible for the pope's safety.
Famous for their Renaissance-era ceremonial garb, the guards are employed by the Roman Catholic Church and serve as escorts to the pope, watchmen for the city and protectors of the College of Cardinals during conclaves.
Vatican City also has a police guard, charged with overall security of the state, and hosts Italian police to secure St Peter's Square.
A tax haven, the Vatican's economy relies upon investments, tourism, and the voluntary contributions of Catholics worldwide.
Almost all supplies, including food, water and electricity, must be imported into the tiny state.
The Vatican's complex history makes it unique among sovereign nations.
"[It's gone] from being a shrine to a church to a kingdom to a state to now a very small state," says Daniel Thompson, associate professor of religious studies at the University of Dayton, USA.
In the past two centuries, the separation of church and state has become a foundational principle of many nations – but not the Vatican.
"Even though we have this clear distinction between church and state, between spiritual and political, it is actually very messy [within the Holy See]", Dr Thompson says.
"Most of the people who serve in the Vatican's diplomatic service or who run the state are also officials, bishops, archbishops or cardinals in the Catholic Church, so there's an overlap of religious and political roles.
"There's this unique relationship where the Vatican has not just religious influence, but it also has diplomats."
Despite its diminutive size, the Holy See has a seat at the world's diplomatic tables.
Its own envoys to other countries — usually archbishops — are called nuncios. More than 180 countries have formal diplomatic relationships with the Holy See, and of those, 89 maintain embassies in Rome.
Australia first established diplomatic relations with the Holy See in 1973 and appointed its first resident ambassador in 2008.
"It's just this little tourist-sized nation, but yet it has the diplomatic apparatus of a modern state," Dr Thompson says.
"In some ways, it can actually function as a diplomatic and international broker, in ways that other states, which are larger and have different kinds of economic, political and military interests, cannot."
The Holy See has held permanent observer status in the United Nations since 1964, meaning it can attend most meetings but cannot vote, object or introduce proposals.
"The Vatican, because it has this sort of dual identity, can function as an intermediary — people recognise it as another diplomatic agent," Dr Thompson says.
Under Pope Francis, the Vatican was vocal in calling for peace in South Sudan, and has attempted to address ongoing wars in Gaza and Ukraine.
The late pontiff also made high-profile symbolic gestures to send political messages.
Given his early appeal for "no more war", Pope Leo has indicated he will continue to broker peace in his role as head of state.
Dr Blanchard says that for the Catholic faithful, the Vatican is "like the centre of the spoke of a wheel".
"In an increasingly fragmented world, where people can feel adrift … it does feel a bit like an anchor," he says.
"It feels like a tangible symbol that we all share, and that makes this massive, scary world feel a little bit safer and like we have a really powerful community."