The Pope is still working on his encyclical regarding the evils of tax evasion (blogged here). Meanwhile, the European Commission has asked the Italian government to explain a tax break it provides the Catholic Church.

Since 2005, the Church has received a property tax exemption for buildings that house various operations. In Rome alone, the count is 18 hospitals, 55 clinics and 250 schools.

European Union officials say the tax relief may break EU rules on state subsidies by giving an unfair advantage over rivals.

The Church's estimated tax savings? £680 million British pounds. That's $1.37 trillion in U.S. dollars, according to OANDA.com currency conversion rates as of Sept. 4.

The European Commission revealed last week that it has been asking the Italian government for information on the tax advantages it provides the Catholic Church. There now are indications, according to various news reports, that the Church is willing to give up some of the breaks.

Details on the EU inquiry and subsequent debate it has generated in Italy can be found in articles in the International Herald Tribune, Christian Today and EUbusiness.com.