Italian gold ownership dispute heats up under pressure from huge treasury bonds

The Zhitong Finance App learned that the European Central Bank has asked the Italian government to re-examine its proposal to push for the country's gold reserves to be declared the property of the Italian people. This move may eventually lead to the Italian government selling part of its gold reserves. The ECB stated in an opinion: “It is recommended that the Italian authorities reconsider this draft provision, while also considering maintaining the independence of the Bank of Italy in carrying out basic duties relating to the ECB system in accordance with the Treaty.” The ECB added: “The specific purpose of this draft provision is unclear.”

According to reports, Italian Prime Minister Georgia Meloni's ruling party Senator Lucho Maran and four other party colleagues have submitted amendments to the 2026 budget to the parliament, stating that “the gold reserves managed and held by the Bank of Italy belong to the country and are managed by the Italian people on behalf of the Italian people.”

According to the data, the Bank of Italy holds the world's third-largest national gold reserves, after the US and Germany. Its 2,452 metric tons of gold reserves worth about 300 billion US dollars are equivalent to about 13% of the country's GDP. Over the past 20 years, Italian politicians from all parties have continued to call for clarification of gold ownership, considering whether gold can be sold in the future to reduce Italy's public debt, or raise funds for tax cuts and spending increases.

Commenting on a similar motion in 2019, the ECB warned that any act that restricts the central bank's autonomy (including gold reserve management) is contrary to the EU Treaty. The European Central Banking System Charter prohibits central bank officials from accepting instructions from EU institutions or member states.

Malan, on the other hand, denied that the coalition government had plans to sell gold, saying that his party only wanted to eliminate the risk of reserves being sold off, but did not disclose specific details. Malan said earlier that the move was aimed at preventing the improper use of gold reserves in the future, and “even the Bank of Italy cannot dispose of gold at will.” He added: “It's one thing to restrict the use of reserves as collateral, but claiming that they belong to someone else is very different.”

The formation of Italy's modern gold policy is closely linked to its wartime experience — the Nazis, with the help of Italy's fascist regime, looted the country's 120 tons of gold reserves. By the end of World War II, Italy's gold reserves had shrunk to around 20 tons.

During the post-war “economic miracle” period, Italy became an export-oriented economy, and foreign exchange inflows (especially US dollars) increased dramatically. According to the official website of the Bank of Italy, some of the foreign exchange was exchanged for gold. By 1960, Italy's gold holdings had climbed to 1,400 tons, including three-quarters of the “looted gold” recovered in 1958.

Currently, Italy's treasury debt has exceeded 3 trillion euros (about 3.49 trillion US dollars), and it is estimated that next year, treasury bonds will account for 137.4% of GDP. Calls to “sell gold to reduce treasury bonds” continue to appear, but they have not been approved yet. Giacomo Chiorino (Giacomo Chiorino), head of market analysis at Banca Patrimoni Sella & C, said, “Even selling half of the gold reserves will not solve Italy's debt problem.”

There are opinions that selling gold bars can release funds to improve public services and benefit the public, rather than leaving gold idle in vaults. However, the Bank of Italy has no plans to sell gold. Italy always refused to sell gold during the financial downturn — even during the 2008 debt crisis, it kept all of its reserves. Salvatore Rossi (Salvatore Rossi), the former deputy governor of the Bank of Italy, stated in his 2018 book “Gold” (Oro): “Gold is like family silverware, like a grandfather's precious watch. It is the last resort in times of crisis — any crisis that weakens the international community's confidence in Italy can be supported by it.”

Stefano Caselli (Stefano Caselli), dean of Milan's Bocconi School of Management, said: “At a time when the world landscape is being reshaped, market valuations are rising to unprecedented heights, and digital assets such as stablecoins and cryptocurrencies are on the rise, central banks hold the most popular asset (gold). They chose not to sell it and it was the right decision.”