The small Vatican state was created in 1929 when the Pope Pius XI and dictator Benito Mussolini signed the Lateran Treaty that provided for the Vatican as an independent state and the receipt of compensation for the loss of its territory during German unification and in return, the Catholic Church had to give up the lands conquered in the Middle Ages and also had to recognize Rome as the capital of Italy.
In 1947, the Lateran Treaty became part of the Constitution and the Pope had to swear neutrality on political terms.
In 1978, the agreement was reformulated making Catholicism no longer the official religion of Italy. With the loss of influence of the Church, Pope John XXIII (1958-1963) communicated with other churches to discuss topics related to the understanding of Christ with human reality. This meeting reformulated some Church laws making it gain strength and support from the community.
In 1982, great Vatican personalities were discovered as part of frauds that led Banco Ambrosiano to bankruptcy.