THE Bundesbank plans to bring home some of its gold reserves stored in the United States' and French central banks, bowing to government pressure to unwind a Cold War-era ploy that secured the national treasure.
Germany amassed gold reserves in the post-war era thanks to rapid economic expansion that saw growing exports to the US, where its dollar claims were turned into gold under the Bretton Woods agreement that Germany joined in 1952.
As the Cold War set in, Germany kept its gold reserves put, keeping them out of reach of the Soviet empire. But government officials have grown uneasy about the storage set-up and have called for the bank to inspect the bars.
The Bundesbank now wants to change the arrangement too, even though it has said it does not see a need to count the bars or check their gold content itself, and considers written assurances from the other central banks as sufficient.
With the end of the Cold War, it was no longer necessary to keep Germany's gold reserves "as far to the west and as far from the Iron Curtain as possible", Bundesbank board member Carl-Ludwig Thiele said yesterday.
"To hold gold as a central bank creates confidence," Thiele said. "If I hold gold in my own vaults, I have to check it myself," he said, adding that "a complete shift is not appropriate".
By 2020, it wants to hold half of the nearly 3,400 tonnes of gold valued at almost €138bn – only the US holds more – in Frankfurt, where it stores about a third of its reserves. The rest is kept at the Federal Reserve, the Banque de France and the Bank of England.
The Bundesbank gained more space in its vaults after the transition to the euro from the mark.
Before German reunification in 1990, 98pc of Germany's gold was stored abroad. The Bundesbank then started to bring its gold home and in 2000 transferred 931 tonnes from the Bank of England to Germany. It will continue to hold about 13pc of its gold reserves in London, even after 2020. (Reuters)