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Fears as Italian government targets huge gold reserves

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Fears as Italian government targets huge gold reserves
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16:37 CET+01:00
League senators proposing a new bill say they want "clarity" on gold ownership, while critics fear the government intends to tap the reserves to plug budget holes.

Italy’s populists have opened a new front in their ongoing clash with the country’s central bank by calling on senators to pass legislation declaring that its gold reserves belong to the state.

The gold ownership bill, presented by Claudio Borghi, a euroskeptic senator for the far-right League, will add to existing tensions between the Bank of Italy and the country’s populist government.

It’s also attracted criticism from opposition politicians, and some Italian media argue that the two ruling parties hope to raid the gold reserves to fund spending promises made in the controversial 2019 budget.

La Stampa reported that the government was considering using part of the country’s gold reserves to avoid a budget correction for this year and a VAT increase in 2020.

Borghi rejected the accusation and said he simply wants clarity on the gold's ownership.

READ ALSO: Italians rush to put money into Swiss banks as budget fears grow

Following the reports, Deputy Premier and League leader Matteo Salvini told local media today that the Bank of Italy's gold reserves are "the property of the Italian people, not of anyone else".

“It’s not an issue that I am following, but it could be an interesting idea,” Salvini told reporters in Rome today when asked about the possibility of tapping gold reserves.

Meanwhile, Minister of Agricultural Policies Gian Marco Centinaio, also of the League, said an interview with Radio Capita today that he had never heard of the idea before, saying “I’ve never heard talk in cabinet meetings or any other political settings about getting our hands on the Bank of Italy’s gold,” 

The Italian central bank says its 90.8 billion euros in gold is the fourth-largest reserve in the world, reportedly consisting of ingots and coins held in Italy as well as in the UK, US and Switzerland.

There have been tensions between the bank and government following incendiary comments from both Five Star Movement Leader Luigi di Maio and Salvini, who yesterday said the central bank and Consob, the country’s stock market regulator, should be “reduced to zero."

Mario Draghi, president of the European Central Bank and a former governor of the Bank of Italy, last year warned that the independence of central banks was threatened by populist governments, but did not make a direct reference to Italy.

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