“It Belongs to The People, Not The Bankers” – Italy Moves to Seize Gold from Central Bank

The comments below are an edited and abridged synopsis of an article by Tyler Durden

European Central Bank President Mario Draghi recently issued a statement confirming that the ECB needs to approve any operation in the foreign reserves of Eurozone countries, including gold. Now it seems that Italy’s ruling populists are attempting to seize control of the central bank and its gold reserves.

“It Belongs to The People, Not The Bankers” - Italy Moves to Seize Gold from Central Bank | BullionBuzz
Flag of Italy in Rome

Complaining that hundreds of thousands of small individual investors lost billions of dollars after several Italian banks failed in recent years, the anti-establishment Five Star Movement and the nationalist League depict the central bank as a symbol of a technocratic elite aloof from the needs of ordinary Italians.

This week saw Italian lawmakers from Five Star asking parliament to pass two laws: One instructing the central bank’s owners, most of them private banks, to sell their shares to the Italian Treasury at prices from the 1930s, and the other declaring the Italian people to be the owners of the Bank of Italy’s reserve of 2,451.8 tonnes of gold, worth around $102 billion at current prices.

Such a move could widen the scope for selling the gold and reduce the bank’s reserves, which help underpin the financial system.

The establishment warns that this is an attempt to undermine the Bank of Italy’s independence, and to spend the nation’s gold reserves on populist policies.

But the Five Star Movement and the League support public ownership of the gold reserves, and with backing from parties comprising 60% of lawmakers, the draft law has enough support to pass. Lawmakers from Five Star also support nationalizing the central bank, while the League hasn’t decided yet, leaving the bill short of a majority with around 40% support.

Five Star and the League have forced the creation of a parliamentary commission to look into the failure of Italian banks, launching what could be months of scrutiny.

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