Germany’s central bank is bringing home gold reserves stored in places like New York and Paris faster than planned. The schedule was set for 2020. The move has the world puzzling as confidence in the euro ebbs even in the heart of the currency bloc after a decade of a sluggish economy.
According to a Bundesbank statement,
Germany’s central bank has completed an effort to bring home 300 tons of gold stashed in the United States, part of a plan to repatriate gold bars kept abroad during the Cold War.
The Bundesbank said 111 tons of gold were brought back from the Federal Reserve in New York in 2016, the last of 300 tons slated for return.
It also repatriated 105 tons from Paris.
The bank in 2013 launched the transfer to Frankfurt of 300 tons of gold from New York and 374 tons from Paris. It still has another 91 tons to return from Paris.
Once the transfers are completed this year, Frankfurt will hold half of Germany’s 3,378 tons of reserve gold, with the rest in New York and London.
Why does Germany do that? There are several scenarios:
- German public has grown uneasy about keeping the gold abroad
- The gold reserves may be needed to back a new Deutsche Mark, should the euro zone break up.
- Germany is afraid of Donald Trump (gold reserves in New York)
- Germany is afraid of Marie LePen (gold reserves in Paris)
IN a relevant article Reuters writes:
Stashed away at the height of the Cold War in safe havens well out of Moscow’s reach, the 3,378-tonne, 120 billion-euro (102 billion-pound) gold stockpile has become a symbol of Germany’s economic ascent and a guardian of its stability.
But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.
Having already moved 583 tonnes of gold out of New York and Paris, the Bundesbank plans to have half its gold in Frankfurt by the end of 2017, years ahead of its 2020 schedule, with the rest split between the Federal Reserve Bank of New York and the Bank of England.
“We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.,” Bundesbank board member Carl-Ludwig Thiele told a news conference.
“Trump has not triggered a discussion about the storage facility in New York,” he said.
With French Presidential candidate Marie Le Pen and Italy’s 5-Star Movement openly campaigning to pull their nations out of the euro, confidence in the common currency appears to be waning. (full article Reuters)
I wonder, whether these repatriated gold reserves include also the tons of gold Germany confiscated from Greece in the years of WWII occupation.
PS Schaeublee must be really concerned about the future of his beloved eurozone – he said something relevant yesterday on ARD.