Germany’s central bank plans to bring home hundreds of tonnes of gold, part of reserves it kept in America and France during the Cold War to ensure it never fell into Soviet hands in the event of invasion.
The Bundesbank’s decision to move the bullion, announced yesterday, reflects a political will to repatriate it and the fact that the bank has space in its vaults. Both serve to underline the psychological importance of gold reserves as a symbol of German economic well-being.
Only a third of Germany’s nearly 3,400 tonnes of gold, valued at almost €138 billion (£115bn) are now stored in Frankfurt, with 45 per cent in New York. Germany’s reserves are second only to America’s.
“The political security situation has changed because the East-West conflict is over. Considerations to store the gold as far West and as far from the Iron Curtain as possible had to be reconsidered,” bank board member Carl-Ludwig Thiele said.
West Germany amassed gold reserves after the Second World War due to rapid economic expansion that saw growing exports to America, where its dollar earnings were turned into gold under the Bretton Woods agreement that Germany joined in 1952.
As the Cold War set in, the gold remained in bank vaults abroad, out of Moscow’s reach.
The German Federal Court of Auditors, which oversees government finances, called last October for an official inspection of the gold, which had never been fully checked.
The Bundesbank is ready to comply although it has said it saw no need to count the bars or check their gold content as written assurances from the other banks were sufficient.
This year, the Bundesbank will start transferring 300 tonnes of gold from the US Federal Reserve in New York and all its gold stored at the Bank of France in Paris – 374 tonnes – to Frankfurt, so that by 2020 half of its total will be in Germany.