Italian Populists Target Huge Gold Reserves and Some Cry Foul
(Bloomberg) -- Italy’s populists opened a new front in their clash with the country’s central bank, calling on lawmakers to pass legislation stating that its gold holdings worth almost $103 billion belong to the state.
The gold ownership bill presented by euroskeptic lawmaker Claudio Borghi of the League adds to an already tense relationship between the Bank of Italy and the coalition government. It’s also sparked criticism from opposition politicians, and some national media argue that it may allow the government to raid the gold reserves to fund spending promises.
Borghi has rejected the accusation and said he’ll ensure Parliament has ultimate power. His concern is that ambiguity of ownership means that a victorious legal action against the central bank -- for inadequate supervision, for example -- leaves open the possibility of a claimant getting compensation in gold.
“My bill only aims at making clear that the gold belongs to the state, not to the government,” he said in a telephone interview on Monday. “If there are doubts on our intentions, we can also pass another law saying none of the gold reserves can be sold unless there is a majority of two thirds or more of both houses of Parliament.”
The central bank says its 90.8 billion euros in gold is the fourth-largest reserve in the world. Borghi’s bill, being examined by the Lower House’s Finance Committee, calls for an explicit interpretation of legislation that the institute “holds and manages as deposits” the gold, while the state has ownership.
In Rome on Monday, Deputy Premier Matteo Salvini emphasized the point, saying it’s “important to state that that gold belongs to Italians.”
Borghi said his plan is supported by a broad majority in Parliament.
Tension between the government and the Bank of Italy hasn’t been in short supply recently. Over the weekend, coalition leaders Salvini of the League and Luigi Di Maio of Five Star Movement used a packed meeting of former stakeholders in two liquidated lenders to slam the Bank of Italy for lax supervision.
Last week, Five Star ministers forced the cabinet to postpone a decision on renewing the term of deputy general director Luigi Federico Signorini, newspapers including la Repubblica reported. On Sunday, Finance Minister Giovanni Tria was cited as saying that central bank independence must be protected.
The Borghi bill isn’t the first gold controversy in Italy. In 2009, former premier Silvio Berlusconi made a failed attempt to tax the central bank’s reserves.
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