On October 30, 1976 he received episcopal ordination and on January 8, 1985 he was transferred to Ankara as Apostolic Nuncio in Turkey, where, in addition to the specific activity of supporting the local Churches of the Latin and Eastern rite, he promoted friendly relations with the local Orthodox Churches, in particular with the Patriarch of Constantinople.
He also began interreligious dialogue with the Jewish and Muslim communities. On November 16, 1994, he became the first Secretary General of the Presidency Council and the Central Committee for the Great Jubilee of the Year 2000. During his three years in that position, he especially dealt with the preparatory phase.
On November 3, 1997, Saint John Paul II appointed him President of the Prefecture for Economic Affairs of the Holy See, a position he held until April 12, 2008.
He participated in the conclave of April 2005 that elected Pope Benedict XVI and was created and cardinal in the Consistory of February 21, 2001, with the Title of Saint Eustace.