How did Vatican City become the world's smallest country? The Papal States and the 1929 Lateran Treaty

Vatican City was created on 11 February 1929, when the Lateran Treaty was signed at the Lateran Palace. The treaty settled a long dispute between Italy, under King Victor Emmanuel III and Benito Mussolini, and the Holy See under Pope Pius XI. It recognised Vatican City as an independent state under the sovereignty of the Holy See. With 44 hectares and about 882 people in 2024, it is the smallest country in the world by area and by population.

To see why the pope needed it, start with the Papal States. For more than a thousand years, from 756 to 1870, a patchwork of territories in Italy was under the direct sovereign rule of the pope. The state began when Pepin the Short, king of the Franks, gave Pope Stephen II lands that had been held by the Lombards. At their height the Papal States covered most of today's Lazio, which includes Rome, as well as Marche, Umbria, Romagna and part of Emilia.

Then Italy unified. The new Kingdom of Italy occupied Romagna in 1860, leaving only Lazio in the pope's hands, and in 1870 Lazio, including Rome itself, was annexed. For the next sixty years relations between the papacy and the Italian government were hostile, and the pope's sovereign rights became known as the Roman question. In 1871 Italy offered the use of the Vatican and Lateran Palaces, but not sovereignty over them, plus a yearly income. The Holy See refused, arguing that the pope's spiritual jurisdiction required clear independence from any political power, and each pope thereafter considered himself a "prisoner in the Vatican".

The Lateran Treaty ended that impasse. The pope was pledged to perpetual neutrality in international relations, and Italy gave financial compensation for the loss of the Papal States. The treaty spoke of Vatican City as a creation, not as a remnant of the much larger Papal States.