Economy

Romania passes law to store gold reserves at home

4 weeks ago

The Romanian House of Representatives voted a draft bill initiated by PSD leader Liviu Dragnea and senator Șerban Nicolae that pushes to move home 95% of Romanian gold held abroad. The initiators of the bill argued that nothing about the country’s current economic landscape justifies keeping more than 5% of its gold reserves abroad.

The bill was approved with 160 votes for, 90 against and three abstention, news agency Agerpres reported.

The sponsors of the bill said the current situation generates quite significant costs, especially as this reserve can be properly stored and increased within the country’s borders. It is estimated that Romania holds 65% of its gold reserves abroad, most of it – 60% – at the Bank of England. According to the latest report published by the Central Bank, at the end of March Romania’s gold reserves amounted to 103.7 tonnes with a value of EUR 3.84 billion, or just over 10% of the country’s total foreign exchange reserves of EUR 35.87 billion.

According to former president Traian Băsescu, the draft bill is a “huge mistake” and it’s nothing more than a “nationalist–populist practice based on insecurity” that builds on the belief that simple citizens won’t understand the international consequences of the relocation.

With the bill Romania is riding a wave initiated by other countries such as Germany, Austria, and Hungary, who relocate gold home, although the percentage is much lower at 50%.

Attila Korodi, caucus leader of the Democratic Alliance of Hungarians in Romania (RMDSZ) said during the debate of the bill that his party will not vote for it while liberal Pavel Popescu said that if passed, his party (PNL) will contest the law at the constitutional court.