The European Central Bank (ECB) has officially called on Italy to reconsider the controversial proposal to own a $300 billion gold reserve by the Central Bank of this country - a move that appeared at a time when world gold prices were climbing and sensitive.
According to documents published on December 3, the ECB said that the proposal of the Italian National Assembly affirming that gold reserves belong to the "Italy people" could threaten the independence principle of the Bank of Italy (Bank of Italy). This is a public authority organization independent of the government and currently holds the world's third largest gold warehouse, after the US and Germany.
With the world gold price currently trading around 4,200 USD/ounce, the gold warehouse is 2,452 tons, equivalent to about 13% of Italy's national GDP worth over 300 billion USD.
The ECB stressed: Italys agencies are invited to reconsider the draft to ensure the central banks independent implementation, adding that the true purpose of the bill is still unclear.
The ECB's objection could force the Italian ruling coalition to withdraw its demand for "people's gold", which was included in the draft budget for next year.
For years, Italian politicians from many factions have sought to establish legal e ownership over this amount of gold sometimes with the ambition of selling a portion to reduce public debt or finance budget spending. However, all proposals have been met with strong opposition from the EU over concerns about interfering in the Central Bank's operations.
The ECB affirmed: When performing the task of holding and managing gold reserves, the ECB or any national central bank, including the Bank of Italy, is not allowed to receive instructions from any member government.
The ECB warned that moving gold or foreign exchange reserves out of the central bank of Italy's accounting balance will be considered an act of indirectly financing the public sector - something absolutely prohibited.
The Bank of Italy has said gold could be used as international loan collateral, or in the final case, could be sold to support domestic currency.
Meanwhile, Prime Minister Giorgia Meloni's party had to back down when the ECB reacted, forcing it to remove the words "gold belongs to the State" in the first draft. However, the proposal continues to cause controversy because it repeats the phrase "Italy people".
The ECB's warning comes at a time when many European countries are concerned about the policies of US President Donald Trump, especially regarding the independence of the US Federal Reserve (Fed).
Some European Central Bank officials even consider the scenario of "sending" gold and USD reserves outside the US, in case the Fed limits emergency liquidity lines for Europe if under political pressure.
