Wednesday, 10 August 2011

German Politicians Want Spain And Italy To Sell Off Their Gold

 

By Simone Foxman

Members of Berlin’s coalition government are pressuring Italy and Spain to sell off their gold reserves in order to stem ECB bond buying.

According to Financial Times Deutsche land (via Finanzas.es), PM Angela Merkel’s own Christian Democratic Union (CDU) and the Liberal Democratic Party (FDP) are getting behind the measure.

“They should fix their own budgets, something they can accomplish through privatizations and selling their gold reserves,” argued CDU spokesman Michael Fuchs.

FDP economist Frank Schäffler added that both countries should employ their own assets before resorting to EU aid.

According to CNBC, Italy’s gold reserves are the fourth-largest in the world behind the IMF, Germany, and the U.S. and amount to 71.4% of the country’s foreign reserves. Spain’s reserves only account for 38.6% of foreign reserves.

Large-scale sales could stem the skyrocketing price of gold, but are small in comparison to the size of gross public debt.

The entirety of Italy’s gold reserves would only cover 7.57% of its public debt at current prices.

[Source]

http://philosophers-stone.co.uk/wordpress/2011/08/r/

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