- Italy has world's third-largest national bullion reserves
- Meloni's party wants to assert gold belongs to people
- Central banks hold gold as safety net against adverse scenarios
ROME, Dec 3 (Reuters) - The European Central Bank has urged Italy to reconsider a parliamentary amendment asserting that the national central bank's gold reserves belong to the Italian people, a document published on Wednesday showed.
The Bank of Italy, a public institution independent of the government, owns the world's third-largest national gold stockpile, behind the U.S. and Germany. Its 2,452 metric tons of gold are worth $300 billion, roughly 13% of Italy's national output.
"The Italian authorities are invited to reconsider the draft provision, also with a view to preserving the independent performance of the Bank of Italy," the ECB said, adding it was not clear what the concrete purpose of the draft provision was.
The remarks may prompt the ruling coalition to drop its claim on people's ownership of gold reserves, which was tabled as an amendment to next year's budget.
The ECB said it had issued its opinion after receiving two requests for comment from Italy's Treasury, on November 28 and December 1.
CENTRAL BANK INDEPENDENCE
Politicians of all parties have sought for years to clarify ownership of the gold, with some eyeing a possible sale to cut public debt or fund tax cuts and spending. All such proposals have met resistance from European Union authorities.
"When carrying out the task of holding and managing gold reserves, neither the ECB, nor a national central bank including Bank of Italy, nor any member of their decision-making bodies, shall seek or take instructions from any government of a member state," the ECB said on Wednesday.
It warned that a transfer of gold or foreign reserves off the Bank of Italy's balance sheet would circumvent the prohibition on central banks financing the public sector.
The Bank of Italy says on its website that gold could be used as collateral for loans or, as a last resort, sold to buy the national currency to support its value.
Meloni's party had already softened its proposal by removing a reference to the state to avoid ECB criticism. The initial amendment said: "The gold reserves, managed and held by the Bank of Italy, belong to the state, on behalf of the Italian people."
The ECB also said Italian authorities should consult with the Bank of Italy if they wanted to press ahead with plans to clarify the legal ownership of gold reserves.
The opinion comes amid growing concern in European capitals over policies pursued by U.S. President Donald Trump, which have raised questions about Federal Reserve independence.
Sources have told Reuters that some central bank officials have even considered pooling dollar and gold reserves outside the U.S. if the Fed, perhaps under Trump's influence, were to shut its emergency liquidity line to the ECB — a backstop banks have relied on since the financial crisis.
Editing by Giselda Vagnoni and Mark Potter
Source: Reuters