Italian lawmakers from the Brothers of Italy party have introduced a budget amendment demanding that the Bank of Italy’s nearly $300 billion gold reserves — equivalent to 2,452 metric tons — be legally declared as state property. The proposal comes amid mounting debt concerns and political pressure to leverage the reserves for public finances. The challenge raises significant governance and constitutional questions.

Critics warn that such a move risks undermining the Bank of Italy’s independence and breaching European Union treaty protections for central banks. They argue that turning a central bank’s liability into a fiscal asset could set a dangerous precedent, triggering market anxiety and investor doubts about institutional safeguards. The debate highlights the tension between political short-termism and long-term monetary stability.

The proposal also includes a one-off levy on private, undeclared gold holdings, potentially raising over €2 billion according to lawmakers. This measure would require individuals to officially declare their private gold through a 12.5% tax, a move aimed at increasing fiscal transparency. The political push has ignited fierce debate within Italy’s financial establishment.

For global investors, the development raises questions about country-specific risk. If enacted, the change could transform Italy’s balance sheet, affect its creditworthiness, and potentially re-shape how sovereign gold assets are treated in financial modelling. Countries with large gold reserves may face similar scrutiny if this sets a precedent.

The broader message is that gold isn’t just a market or monetary asset — it’s deeply political. Any move to reclassify central bank gold could ripple into capital flows, sovereign debt markets, and institutional credibility across Europe.

Source: Reuters.