Wednesday

18th Oct 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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the euro, so that the main reason for storing gold abroad - quick access to a foreign currency in case of crisis - is no longer valid.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.

Analysis

Juncker's euro-push could risk unity, warns eastern flank

The EU Commission chief hopes that as Emmanuel Macron pushes for euro area countries to integrate further creating a multi-speed Europe, central European members will be more inclined to join the single currency. Are they?

News in Brief

  1. Spanish Court declares Catalan referendum law void
  2. EU to keep 'Dieselgate' letter secret
  3. No deal yet on Mediterranean alliance for EU agencies
  4. EU Commission condemns Maltese journalist's murder
  5. Poland denies wrongdoing over forest logging
  6. Risk to asylum kids in EU increasing, says charity
  7. Schroeder warns of Turkey and Russia drifting towards China
  8. EU parliament wants equal pay for posted workers

Stakeholders' Highlights

  1. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  2. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  3. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  4. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  5. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  6. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  7. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  8. CECEE-Privacy Regulation – Hands off M2M Communication!
  9. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  10. EU2017EEEHealth: A Tool for More Equal Health
  11. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  12. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year

Latest News

  1. EU rejects UK claim it's slowing Brexit talks
  2. Nepal troops arrive in Libya to guard UN refugee agency
  3. Is Banking Authority HQ the Brexit 'booby prize'?
  4. EU-Russia trade bouncing back - despite sanctions
  5. No sign of Brexit speed-up after May-Juncker dinner
  6. EU defence strategy 'outsourced' to arms industry
  7. EU privacy rules tilt to industry, NGO says
  8. Malta in shock after car bomb kills crusading journalist