Italy will declare its gold reserves as "property of the Italian people"

RomeWith over 2,450 tons of gold, Italy holds the third-largest gold reserves in the world, behind only the United States and Germany. In the current uncertain international climate, where geopolitical crises increasingly influence markets, this metal remains a safe-haven asset par excellence; a wild card that would allow the country to weather a period of instability. But to whom does this treasure, held by its central bank, belong? This is the question that has divided Italian politicians and experts for weeks, after the government of Giorgia Meloni pushed through an amendment during negotiations on next year's budget law. This amendment explicitly states that the gold reserves deposited in Bankitalia—which have a market value of 5-0—are no longer valid. of the Italian people."

The initiative sparked concern at the European Central Bank (ECB), which urged the Italian government not to include the provision on the ownership of its gold reserves in the draft of its upcoming general budget because, according to the Frankfurt-based financial institution, this reform jeopardized its independence. The ECB also feared that this initiative could open the door for the gold reserves to be used in the future by the government in Rome to finance itself or even to reduce its ballooning public debt—which exceeds three trillion euros—violating European Treaties that prohibit public sector financing through banks. "The ECB remains unclear about the specific objective," the issuing institution warned in a note in early December, in which it invited "the Italian authorities to reconsider this project."

The negotiations

After weeks of negotiations, Economy Minister Giancarlo Giorgetti reached an agreement with the financial institution after meeting with ECB President Christine Lagarde on the sidelines of the Eurozone finance ministers' meeting in Brussels. During these talks, the Italian government committed to the institution not to transfer the gold reserves off the Bank of Italy's balance sheet, according to official sources.

In a letter sent to Lagarde before their meeting, Giorgetti detailed the terms of the new amendment and explained that he had revised it in agreement with Bank of Italy. "I am here to reassure you: the provision aims to clarify in national legislation that the custody and management of the Italian people's gold reserves are the responsibility of the Bank of Italy, in accordance with the rules of the European Union treaties," the Treasury Minister stated.

On the other hand, the main proponent of the initiative, Senator Lucio Malan, confirmed that the executive branch was working on a new wording for the amendment to eliminate any concerns from the ECB. "Reclaiming the ownership of the Italian people's gold is a historic battle for Brothers of Italy," stressed the leader in the Senate of the Prime Minister's party, Brothers of Italy. "We raised the issue in Parliament in 2014 with an initiative by Giorgia Meloni. If this battle, as it seems, becomes law, we can only be satisfied." Its approval as part of one of the budget amendments, in any case, is conditional on a new wording of the text that reaffirms the principle of full compliance with the EU Treaties.

Historic battle

The debate over gold ownership is not new in Italy and has been reopened just as the value of this metal has reached record levels again. In an interview in Corriere della SeraFormer IMF official Carlo Cottarelli asserted that this is a symbolic initiative with no practical effect that raises more questions than answers. "If they really wanted to plant that flag, I would propose that the amendment itself clarify that public debt is the debt of the Italian people," the economist added. However, beyond an ideological or propaganda issue, an internal report from the Prime Minister's party, published by local media, revealed the executive branch's concern that part of the Bank of Italy's capital, including its gold reserves, is in the hands of financial institutions, foundations, or controlling insurance companies. "Italy cannot risk private entities claiming rights to the gold reserves of Italians. That is why we need a law that clarifies ownership," the report states.