11 February 1929 – Kingdom of Italy and the Vatican sign the Lateran Treaty: The treaty recognized Vatican City as an independent state under the sovereignty of the Holy See. The Italian government also agreed to give the Roman Catholic Church financial compensation for the loss of the Papal States.
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Yes, that’s Mussolini in the middle.
During the unification of Italy in the mid-19th century, the Papal States resisted incorporation into the new nation, even as all the other Italian countries, except for San Marino, joined it; Camillo Cavour’s dream of proclaiming the Kingdom of Italy from the steps of St. Peter’s Basilica did not come to pass.
The nascent Kingdom of Italy invaded and occupied Romagna (the eastern portion of the Papal States) in 1860, leaving only Latium in the pope’s domains. Latium, including Rome itself, was occupied and annexed in 1870.
For the following sixty years, relations between the Papacy and the Italian government were hostile, and the status of the pope became known as the “Roman Question”.
The pope at the time had fascist sympathy
Italy could nullify the Lateran Treaty on the basis that it was signed by an illegitimate fascist government. That would force the Vatican either to accept changes to the treaty’s contents or to defend a treaty with fascist Mussolini, which should considerably weaken its position. The same strategy could be applied by Germany with Hiter’s Concordat with the Vatican.
Just wanted to say that in 1984 the Italian government headed by the late Bettino Craxi, revised these agreements.