EU conflict looms as Italy moves to declare gold reserves state property
Italian lawmakers are pushing ahead with a controversial claim that the central bank’s $300 billion in gold reserves should be declared state property, a move a senator confirmed on Thursday despite fears it could violate European Union regulations.
Lucio Malan, a Senator from Prime Minister Giorgia Meloni’s Brothers of Italy party, stated on Radio 24 that the purpose of the initiative was to ensure the gold reserves are not misused in the future, according to a Reuters report.
Malan said:
Not even the Bank of Italy can do whatever it wants with the gold.
Third-largest stockpile
The Bank of Italy holds one of the world’s most substantial national gold reserves, ranking as the third-largest stockpile globally, surpassed only by the US and Germany.
This impressive reserve amounts to 2,452 metric tons of gold.
To put this into perspective regarding its economic significance, this quantity of gold is equivalent to approximately 13% of Italy’s national output, underscoring its importance to the nation’s financial standing and perceived stability.
However, the legal ownership and control of this vast gold reserve have recently become a subject of political debate within the Italian government.
A significant legislative move is underway that seeks to formally clarify the proprietorship of the gold.
Specifically, Senator Guido Quintino Malan, along with a group of four other party members, has introduced an amendment to the proposed 2026 budget.
This amendment asserts a fundamental change in the legal status of the reserves, stating explicitly that “the gold reserves, managed and held by the Bank of Italy, belong to the state, on behalf of the Italian people.”
This proposed change aims to establish definitively that the gold is a national asset, held in trust by the central bank for the benefit of the nation.
Before proceeding with any legislation on this contentious matter, the Italian government has indicated a measured and cautious approach.
A government official, speaking to Reuters, confirmed that Italy intends to solicit formal opinions from two key financial institutions: the Bank of Italy itself, which currently holds and manages the gold, and the European Central Bank (ECB), given Italy’s position as a member of the Eurozone.
This consultation process is a critical step, ensuring that the government has considered the potential financial, legal, and operational ramifications of transferring formal ownership before enacting any new law.
Incompatibility
The ownership of Italy’s gold reserves has been a contentious political issue for two decades, with various parties suggesting a possible sale to reduce public debt or finance spending and tax cuts.
However, the European Central Bank (ECB) has previously cautioned that any move to restrict a central bank’s autonomy, particularly in managing its gold reserves, would violate EU treaties.
The statute of the European System of Central Banks (ESCB) explicitly forbids central bankers from taking instructions from EU institutions or member states.
Despite this, Malan denied that the current coalition plans to sell the gold.
Instead, he argued his party’s goal was simply to “defuse the risk” of the reserves being sold off, although he provided no further details.
It is one thing to establish that reserves cannot be used because they are held as collateral, but it is quite another thing to say they belong to someone else.
According to the Bank of Italy’s website, the gold reserve serves two potential purposes: it can be utilized as collateral to secure loans or, in a scenario of last resort, it can be sold on the market to acquire euros to bolster the currency’s value.
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