ECB urges Giorgia Meloni’s party to rethink declaring Italy’s gold ‘belongs to the people’
Any law affecting legal status of gold reserves would risk Bank of Italy’s independence, warns central bank
The European Central Bank has urged Italian Prime Minister Giorgia Meloni’s party to “reconsider” a plan to declare that gold reserves held by the country’s central bank belong to the Italian people.
In an opinion released on Wednesday, the ECB warned that any law that could affect the legal status of Italy’s gold reserves would require consultation with the Bank of Italy to ensure that it does not compromise central bank independence.
Italy has the third largest gold reserves of any country, after the US and Germany, with around 2,452 tonnes. Its current market value of about €285bn follows a blistering rise in global gold prices.
The gold — which is stored in Italy, the US, the UK and elsewhere — is currently on the balance sheet of the Bank of Italy, which manages the stock as part of Italy’s official foreign reserves.
But senior lawmakers from Meloni’s Brothers of Italy party are pushing for a provision in the upcoming budget law to declare that “the gold reserves managed and held by the Bank of Italy belong to the Italian people”, a move that critics fear could pave the way for a potential sell-off of some of Italy’s gold.
“It is not clear to the ECB what the concrete purpose of the draft provision is,” the ECB said in its opinion. “The Italian authorities are invited to reconsider.”
Italy’s finance ministry had sent the draft budget amendment last week to the ECB for official review.
In its response to Rome’s query, the ECB said the EU treaty governing management of the single currency — and the reserves behind it — does not use “the concept of ownership” but instead “only deals with the dimension of exclusive holding and management of the reserves”.
EU treaties give European central banks, including the Bank of Italy, full independence to manage their countries’ gold reserves, including the right to buy or sell gold outright, the ECB noted.
In turn, member state governments “undertake to respect this principle” and promise not to “seek to influence members of the decision-making bodies of the national central banks”, the ECB said.
It said any transfer of gold reserves from the Bank of Italy’s balance sheet to the public accounts would also be prohibited, echoing its ruling when a similar proposal came up in 2019.
“If the Italian authorities consider it necessary to clarify the legal ownership of the gold reserves, then the Bank of Italy must be consulted in order to ensure that treaty requirements — and in particular the independence of the Bank of Italy — will continue to be fully respected,” it said.
In a response to the ECB opinion on Wednesday, Brothers of Italy lawmakers — who insist they have no intention of touching the country’s gold reserves — slammed the “alarmism” surrounding their proposal to affirm public ownership of the reserves.
“It reaffirms a normal principle: namely that the gold reserves are the property of the Italian people,” parliament member Francesco Filini said on Wednesday. “The Brothers of Italy amendment is clear: it does not in any way call into question the autonomy of the Bank of Italy.”
Opposition parties, including the Democrat Party, say Brothers of Italy is raking up the issue to try to distract public attention from a worsening squeeze on the cost of living and the country’s sluggish economic growth.
The government is racing to pass a budget before the end of the year, but Senator Lucio Malan, one of the proposal’s backers, said Meloni’s cabinet might take up the issue and try to draft a law that would satisfy the ECB.