Sunday

5th Jul 2020

Germany to bring gold reserves back home

  • Thirteen percent of German gold is in London (Photo: bankofengland.co.uk)

Germany, the world's second largest holder of gold reserves after the US, on Wednesday (16 January) decided to repatriate part of its gold bars stored in New York and all of those kept in Paris by 2020.

"The German Bundesbank from 2020 on will store half of the German gold reserves in its own vaults inside the country. The other half will stay with partner central banks in New York and London," the Bundesbank said in a press release.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Currently, the Frankfurt-based central bank only holds 31 percent of the more than 3,391 tonnes of gold which Germany owns, worth €137.5 billion. The rest is stored in New York (45%), London (13%) and Paris (11%).

The Bundesbank made clear that the move from Paris is not some kind of snub, but is instead linked to the fact that both countries have the same currency, the euro, so that the main reason for storing gold abroad - quick access to a foreign currency in case of crisis - is no longer valid.

The transport of 300 tonnes of the precious metal from New York and 374 tonnes from Paris will be done "gradually," with the Bundesbank keeping the dates of the shipments secret.

Its strategy to acquire gold abroad and store it there was developed during the Cold War, when West Germany feared possible invasion by the Russians. Before German reunification, 98 percent of its gold was in foreign vaults.

In choosing the locations abroad, the Bundesbank considers three criteria: central banks with the best international reputation, stable democratic structures in the host country and very high security standards.

Last October, when hurricane Sandy was rampaging along the US west coast, the Federal reserve was quick to say that its vault in New York, where Germany's and other countries' gold reserves are stored, is safe. "The bank's security arrangements are so trusted by depositors that few have ever asked to examine their gold," it noted.

The same month, he German court of auditors complained that many of the gold bars have never been checked by independent experts to see if they are genuine and to check how much they really weigh.

A member of the Bundesbank board, Carl-Ludwig Thiele, who presented the decision on Wednesday, told reporters the move is "independent" of the auditors' report.

"In Germany, a lot of emotion is attached to the topic of gold reserves. To hold gold as a central bank creates confidence," he said.

EU plans tougher checks on foreign takeovers

The EU and its member countries are worried that foreign powers, such as China and its state-owned companies will take advantage of the economic downturn and buy up European firms

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.

News in Brief

  1. EU grants Remdesivir conditional authorisation
  2. French prime minister and government resign
  3. France lied on Nato naval clash, Turkey claims
  4. EU highlights abuses in recent Russia vote
  5. Belgium bids to host EU mask stockpile
  6. France shamed on refugees by European court
  7. French and Dutch police take down criminal phone network
  8. EU launches infringement case on Covid-19 cancelled trips

Coronavirus

EU leaders to reconvene in July on budget and recovery

Most EU leaders want an agreement before the summer break, but the Dutch PM, leading the 'Frugal Four', warned there might not even be a deal then. But the ECB's Christian Lagarde has warned of a "dramatic" economic fall.

Coronavirus

EU leaders seek to first narrow differences at summit

EU leaders on Friday will share their takes - online - on the €750bn recovery and €1.1 trillion budget plans, before they try to seal the deal at one or two likely head-to-head meetings in July.

Stakeholders' Highlights

  1. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  2. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  3. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  4. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  5. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis
  6. UNESDACircularity works, let’s all give it a chance

Join EUobserver

Support quality EU news

Join us