Economist Proposes Using Gold Reserves For Crisis Aid

Marcel Fadschapp, President of the German Institute for Economic Research, suggested using a portion of Germany's gold reserves to stabilize the economy. Fratscher stated the reserves could assist in difficult economic times. The gold reserves are managed by the Deutsche Bundesbank to maintain Euro stability as a currency reserve. The value of these gold reserves has increased by 160 billion euros over the last two to three years. The proposal involves taking 30 to 40 billion euros, which represents less than 10 percent of the total value. This measure aims to provide relief without the state issuing additional debt papers to increase national debt. The proposal includes implementing an energy cost flat rate similar to the 300 euro per adult payment seen in 2022 and 2023. The economist argued that such a measure should be part of a serious discussion rather than being treated as a taboo. German Chancellor Merz reportedly supports the idea, though implementation would require coordination between the Deutsche Bundesbank and the European Central Bank. The Deutsche Bundesbank maintains sovereign decision-making power regarding such sales, which have been discussed among European central banks for approximately 15 to 20 years. Currently, the Bundesbank sells a small amount of gold annually to transfer funds to the Federal Ministry of Finance for the minting of special gold coins. The economist noted that while this is not a completely new concept, a formal consideration of using reserves for aid would be economically logical.