Italian Lawmakers Reignite Debate Over Gold Reserve Ownership

Lawmakers from Italy's ruling coalition have reignited a long-standing debate over the ownership and control of the nation's substantial gold reserves. A proposed amendment to the 2026 Budget Law seeks to formally declare these reserves as the property of the Italian people, a move that has raised concerns about the independence of the Bank of Italy and the potential for government sell-offs.

The Proposal and Its Proponents

The initiative is primarily spearheaded by members of Fratelli d'Italia (Brothers of Italy), the party of Prime Minister Giorgia Meloni. Senator Lucio Malan, chief whip for Brothers of Italy, introduced an amendment initially stating that 'the gold reserves managed and held by the Bank of Italy belong to the State, in the name of the Italian people.' This wording was later revised to assert that the gold 'belongs to the Italian people,' removing the explicit mention of 'the State.' Proponents argue that the gold represents the 'fruit of Italian labour' and has always been a national asset. The League (Lega), another party within the ruling coalition, has also historically supported similar measures aimed at asserting greater national control over the reserves.

Italy's Significant Gold Holdings

Italy possesses approximately 2,452 metric tonnes of gold, making it the third-largest national gold reserve globally, trailing only the United States and Germany. At current market prices, these reserves are valued at an estimated $300 billion or €285 billion, representing roughly 13% of Italy's national output. The gold is primarily stored in the Bank of Italy's vaults in Rome, with significant portions also held at Fort Knox in the United States, and smaller amounts in London and Bern, Switzerland. The Bank of Italy currently records these reserves on its balance sheet and maintains that it owns the gold as part of the country's official foreign exchange reserves, crucial for bolstering financial system confidence and the euro.

Concerns Over Central Bank Independence and Potential Sell-offs

The legislative push has generated considerable apprehension, particularly regarding the independence of the Bank of Italy. Critics contend that such a move could undermine the central bank's autonomy, a principle enshrined in European Union treaties. The European Central Bank (ECB) has previously issued warnings, stating that transferring reserves off the Bank of Italy's balance sheet would violate monetary financing prohibitions and EU treaties, which forbid central banks from taking instructions from national governments. Economists have also voiced concerns that declaring the gold as state property could pave the way for the government to sell portions of the reserves to alleviate Italy's substantial public debt, which exceeds €3 trillion, or to fund public services. Despite these concerns, Senator Malan has stated that the government has no intention of selling or relocating the reserves.

Historical Context and Future Implications

Debates surrounding the ownership of Italy's gold reserves have been a recurring theme in Italian politics for the past two decades, often driven by nationalist or far-right parties seeking to assert sovereignty. Similar legislative efforts were seen in 2019, involving the League and the Five Star Movement. The current softening of the amendment's language, from 'state' to 'people,' is perceived by some as a strategic maneuver to mitigate potential backlash from the ECB. The outcome of this legislative effort and its broader implications for Italy's financial stability and its relationship with European institutions remain under close observation.