Italy has received a warning from ECB President Christine Lagarde on a proposal to proclaim the nation’s gold to be the people’s property. The action is a reaction to a proposed budget amendment by the ruling Brothers of Italy party that aims to alter reserve management.
Lagarde stressed that, in accordance with European legislation, the national central bank of each member state is solely responsible for the keeping and administration of reserves when questioned by Italian MEP Pasquale Tridico of the Five Star Movement. Lagarde declared, “The Bank of Italy is no different from any other national central bank.” “Italy is the third-largest gold holder among the central banks, so this is not a trivial issue.
Declarations about the ownership of gold reserves impact on the core ideas guiding central bank independence in the eurozone rather than being merely regulatory adjustments.
“The Italian authorities are invited to consider the proposed provision, also with a view to maintaining the independent execution of the basic ESCB-related tasks of the Banca d’Italia under the Treaty,” the European Central Bank stated in a legal opinion on Tuesday.
European treaties state that national central banks are in charge of holding and managing reserves. Although legal ownership is not mentioned, it is extremely evident who would have practical and accounting control.
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