‘Hands off’ Italy’s gold

– The Italian government has no intention of selling the Bank of Italy’s gold reserves to plug budget holes, a prominent lawmaker of the ruling League party said yesterday.

“We do not want to sell a gram of gold,” Claudio Borghi, chair of the lower-house budget committee and the League’s economics spokesman, said.

The League has drafted a law proposal which would eventually allow the government to sell the gold reserves if there were also a change to the constitution.

Borghi has already tabled a Bill intended to establish that the gold is the property of the state, rather than of the Bank of Italy.

The idea that Italy could sell part of its gold reserves to fill budget shortfalls has sparked outcry in Germany, Daniel Gros, a German economist, said.

In an exchange with Borghi, Gros said: “Some conservative financial circles believe Italy is on the edge of collapse and see its gold reserves as the only available collateral in case of a bailout.”

Italy is the world’s third-largest holder of gold reserves, behind the US and Germany, with 2 451.8 tons as of last year, according to the World Gold Council.

In 1976, 543 tons of gold bullion were used by the Bank of Italy as collateral for a loan from the German central bank. – Reuters

Rome