France, Germany and Italy have substantial gold reserves. Longstanding debates over national gold reserves in both countries have recently intensified, spurring calls to repatriate their gold stores. Germany has the second-largest gold reserves in the world with 3,352 tonnes. Italy isn’t far behind with 2,452 tonnes, so safeguarding gold security is a more critical concern, especially with shifting geopolitical landscapes.
The current surge in gold repatriation is not an unprecedented development. In 2013, Germany’s Bundesbank took a historic step. They made the decision to keep half of their gold reserves stored domestically, thus making possible the return of 674 tonnes from France back to German soil. This past 2017, the country reached an incredible historic first. Its tangible successes — including a noteworthy project that returned about half of its gold reserves back on-shore — is winning. At the same time, Poland, the Netherlands, Belgium, Hungary, Romania and Australia have all instituted their own repatriation programs in recent years. In 2019, Poland made headlines when it repatriated 100 tonnes of its gold. This move underscored the country’s growing desire to repatriate gold holdings.
The growing focus on national control over gold reserves has been largely driven by fears about geopolitical instability. Central banks all around the world are becoming more concerned with the possibility of sanctions and where their assets abroad would be safe. This worry grew after the U.S. and its allies seized or locked down almost half of Russia’s $650 billion in gold and forex reserves. In response to these concerns, Italy’s Prime Minister Giorgia Meloni has recently spoken in favour of gold repatriation.
Fabio De Masi, a former left-wing populist Member of the European Parliament (MEP), highlighted that there are “strong arguments” for returning gold to Germany during these “turbulent times.” Sentiments like these are often echoed by traders concerned about the risks involved with holding assets offshore as global instability rises.
“We need to address the question if storing the gold abroad has become more secure and stable over the past decade or not. The answer to this is self-evident, as geopolitical risk has made the world more insecure.” – Source Unknown
In Italy, calls for repatriation are gaining steam, too. Of those critics, many believe that keeping 43 percent of Italy’s gold reserves in America is too risky a gambit. Enrico Grazzini, an Italian political figure, stated, “Leaving 43 percent of Italy’s gold reserves in America under the unreliable Trump administration is very dangerous for the national interest.” Such views are symptomatic of a burgeoning concern that protecting dominion over domestic treasures is priority number one.
Here too, the worries go well beyond any individual political administration. They include deeper social and economic meanings. Critics have claimed that external oversight of gold reserves undermines national sovereignty. One anonymous source stated, “Trump wants to control the Fed, which would mean controlling the German gold reserves in the U.S. It’s our money; it should be brought back.” This is a compelling claim that embodies the sense of urgency felt by many advocates for repatriation.
As Peter Boehringer, the prominent German activist for gold repatriation, made clear, gold has a unique function. This is why he claims it serves as an “asset of last resort” for the central banks. In it, he makes the case for keeping the gold free from all third-party risk. He argues, “legal title doesn’t matter, what matters is control of the gold in physical space.” His comments indicate a welcome but long overdue recognition that national stewardship over these invaluable resources is critical to our nation’s fiscal health.
Some senior officials are still optimistic about their current setups. The Bundesbank is rock solid sure about the New York Federal Reserve’s integrity. They consider it a reliable partner in protecting Germany’s gold reserves. Third, a representative of the Bundesbank quipped with the utmost certainty, “We have full trust in the New York Fed. They are our gold reserves’ best partner in ensuring its security.”
Advocates and experts argue that increasing talk of geopolitical competition and national security are heavily influencing the narrative. They raise the specter of any serious short-term push to restore the gold standard being politically motivated. As one German environmental investment analyst wrote, that’s a key point. He explained that “returning the gold now with such pomp and ceremony would indicate that China’s relationship with the U.S. is going south.” This demonstrates the complicated role international relations and domestic policy can play in decisions about valuable national assets.
In both countries, calls for their repatriation have sounded increasingly louder. It remains to be seen how policymakers will balance these urgent priorities. The continued backdrop of geopolitical tensions and economic uncertainty is driving discourse around fiscal independence and national sovereignty.