How the Vatican Became Its Own Country: The Lateran Treaty and the “Prisoner of the Vatican”

By Jason Scott – Vatican City is younger than many people realise. The world’s smallest country was established less than a century ago.

Today, February 11th, marks the anniversary of the Lateran Treaty, one of the strangest diplomatic partnerships in modern history: a pope and a Fascist dictator. Here’s how it happened.

The Papal States and The Roman Question

Up until 1870, the Papal States were an actual country, a kingdom ruled by the Pope as a temporal monarch. For over a millennium, the popes governed territory stretching across central Italy, at its height covering 44,000 square kilometres. They commanded armies, collected taxes, and conducted diplomacy like any other European sovereign.
Why? Independence. A pope subject to any earthly government cannot freely serve the universal Church. History proved this repeatedly: the Avignon Papacy under French control, Italian princes manipulating papal elections. Temporal sovereignty guaranteed that no prince could coerce the Vicar of Christ.
By the 19th century, however, the Papal States stood squarely in the path of Italian unification. On 20 September 1870, Italian troops breached Rome’s walls at Porta Pia. The old order ended.

The new Italian government proposed terms: the Law of Guarantees (1871). The Pope could keep the Vatican and Lateran palaces, receive 3,25 million lire annually, and maintain diplomatic immunities. Generous on paper. Fatal in practice. It was a unilateral Italian law, not an international treaty. Any future parliament could revoke or “amend” it at will. The Pope’s freedom would rest on Italian goodwill, the very dependency the Papal States had prevented.

Pius IX refused. In his encyclical Ubi Nos (15 May 1871), he declared “Non possumus”—”We cannot”—echoing the Apostles who told the Sanhedrin they must obey God rather than men. Earlier, in Respicientes (1 November 1870), he had protested the seizure and declared himself “the Prisoner of the Vatican.”

The standoff lasted 59 years. Pius IX and his successors refused to leave the Vatican walls or recognise Italian sovereignty over Rome. The impasse became known as the Roman Question.

Mussolini: An Unlikely Partner
Enter Benito Mussolini, who seized power in 1922. As a Vatican partner, it seemed absurd. A militant atheist, and even an avowed socialist in his youth, his first article was titled “God Does Not Exist.” He publicly challenged God to strike him dead within five minutes. He lived out of wedlock and authored anti-clerical novels.
But Mussolini was pragmatic. In deeply Catholic Italy, effective governance required accommodating the Church. Its moral authority and network of parishes couldn’t be dismissed.

Years later, in a private conversation with Pius XI in 1932, Mussolini revealed his cynical calculation: “Today, I no longer deny God by according Him five minutes in which to strike me dead as proof that He exists. I now know why I was not struck by lightning: the Church needed me.”
Pope Pius XI, elected in 1922, faced difficult choices. Liberal Italian governments since 1870 had pursued aggressive secularisation. More ominously, Bolshevism was spreading across Europe. Mussolini, despite his faults, appeared to offer a bulwark against atheistic Communism.
Cardinal Pietro Gasparri assessed Mussolini: “If this man came to power, one could do business with him.” Secret negotiations began in 1926.

The Church had precedent for negotiating from apparent weakness. Napoleon’s 1801 Concordat had seemed to favour France. Yet Napoleon ended in exile, and the Concordat revived French Catholicism and strengthened papal authority. The pattern would repeat.

The Treaty: What Was Agreed
On 11 February 1929, the feast of Our Lady of Lourdes, Cardinal Gasparri and Benito Mussolini signed the Lateran Pacts.

The settlement comprised three documents:
The Treaty of Conciliation created Vatican City State as fully sovereign territory: 44 hectares (approximately 109 acres) centred on St Peter’s Basilica. Additionally, certain properties outside Vatican City received extraterritorial status: the Lateran Palace, the major basilicas, and Castel Gandolfo.
The Financial Convention compensated the Holy See for losing the Papal States: 1.75 billion lire total (750 million in cash, 1 billion in bonds). In 1929 terms, that was about $92 million. Adjusted for inflation, it represents roughly £1.4 billion in today’s purchasing power, or R26 billion.

The Concordat regulated the Church’s position in Italian society. Catholicism became “the only State religion.” Catholic religious instruction became mandatory in state schools. Church marriages received full civil recognition. Catholic Action, the lay apostolate movement, received protection. All bishops were required to swear loyalty to the Italian state.

Pope Pius XI addressed the faithful: “With profound thankfulness We believe that through this We have given back God to Italy and Italy to God.” More controversially, he described Mussolini as “l’uomo della Provvidenza”, the man whom Providence had caused them to meet.

The Breakdown
The honeymoon lasted barely two years. By 1931, Mussolini moved against Catholic Action, which he viewed as political opposition. Fascist squads raided Catholic youth clubs and shut down meeting halls. Mussolini’s position was totalitarian: “The child, as soon as he is old enough to learn, belongs to the state alone. No sharing is possible.”
On 29 June 1931, Pius XI issued the encyclical Non Abbiamo Bisogno (“We Do Not Need”). Written in Italian rather than Latin, to ensure wider readership, it was smuggled out of Italy and read from pulpits worldwide.

The encyclical condemned Fascism in unsparing terms: “We find Ourselves confronted by… the resolve to monopolise completely the young… for the exclusive advantage of a party and of a regime based on an ideology which clearly resolves itself into a true, a real pagan worship of the State—the ‘Statolatry’…”
The Pope was identifying Fascist totalitarianism for what it was: an ideology that put the state in God’s place. Mussolini, unable to afford an open breach with the Church, backed down. But the relationship never recovered.

The Long Game
A pattern emerges when examining concordats negotiated from apparent weakness. Napoleon believed his concordat would subordinate the Church to state control; instead, it revived Catholicism. Mussolini believed the Lateran Treaty would “bury” papal pretensions by confining the Pope to 44 hectares; instead, it gave the papacy unprecedented international standing.
The Lateran Treaty gave Vatican City unquestioned sovereignty under international law. The Holy See could establish formal diplomatic relations worldwide, join international organisations, and address the United Nations. The small size of Vatican City actually freed the papacy from the distractions of governing a large territorial state. Today, Vatican City maintains diplomatic relations with 183 nations. It has 842 residents, operates its own postal system and mints euro coins.

To put it simply: history offers a simple lesson to those who set themselves against the Church: they all fail.