Germany has announced that it will speed up efforts to bring back its gold reserves parked abroad. It has declared that by 2020, the country must repatriate at least half of the country’s total gold reserves.
Since 2013, Germany has been repatriating its gold bars and brought 366 tonnes of gold back to Frankfurt. That is almost half of the total gold reserves to be transferred.
Bundesbank President Jens Weidmann said 3gold worth $17 billion have been delivered to Frankfurt so far. He affirmed that the rest of the gold in New York and London is as safe as it is in Germany.
Germany’s gold holding has been valued at $130 billion and is the second biggest in the world, after the United States. According to the World Gold Council, the gold reserves of Germany are double the size of China.
Germany started scaling up its gold reserves in the 1950s, and converted trade surpluses into gold, reports Mining Weekly. This led to an escalation of its overseas gold reserves, mostly in New York and London.
During the Cold War, Germany was afraid to keep the gold reserves at home fearing invasion from the Soviet Union. The Bundesbank preferred keeping the gold reserves in the West.
According to the Bundesbank, 1,400 tons of gold, which is about 40 percent of Germany’s total gold reserves, are kept in the Frankfurt vaults. In October, Bundesbank released a detailed inventory of all gold bars it stored in Frankfurt, London, Paris and New York.
The move also coincides with the increasing criticism faced by Bundesbank for keeping a major portion of gold reserves abroad. Critics wanted the complete return of gold assets to Germany. They point out that gold is an essential insurance in any crisis and having the reserves at home is very important, reports RT. They also point to the challenges in keeping gold abroad, including the resistance faced by US authorities with demands for inspection while it was seeking to repatriate gold in 2014.