The Italian government is considering selling the country’s gold holdings in an attempt to avoid an increase in value-added tax (VAT) next year, one of Italy’s oldest newspapers La Stampa reported.
The news comes amid a law proposal drafted by Italy’s ruling League party. The new amendment is set to allow the sale of the reserves if it were “authorized through a constitutional law,” according to Reuters.
The gold ownership bill, proposed by League’s Claudio Borghi, sparked harsh criticism from opposition leaders with local media warning that the governing party is planning to seize the nation’s gold reserves to fulfill their spending promises.
Italy’s Deputy Prime Minister Matteo Salvini appeared to give a positive assessment of the plan.
“It’s not an issue that I am following, but it could be an interesting idea,” Salvini, who heads the League party, told journalists.
Earlier, Salvini and his coalition partner, Luigi Di Maio, called for replacing the current administration of the Bank of Italy, which controls Italy’s gold and foreign currency reserves. The government accused the regulator’s current management of failing to maintain proper supervision of the country’s banking system.
The Bank of Italy enjoys a broad autonomy with its decision-making process absolutely independent from the Italian government. According to some government officials, the insufficient control has led to a collapse of a wide range of big financial institutions with thousands of ordinary depositors suffering from the impact.
Past efforts by Italian authorities to gain control over the country’s gold reserves were halted by Brussels as disruptive for Bank of Italy’s independence and public financing rules.
In December, the Italian government approved a controversial state budget plan for 2019, ditching plans to increase VAT. The parliament introduced unconditional basic income and added a new provision to amend the current legislation to ensure earlier retirement.
The move evoked a conflict between Italy and European authorities pushing Brussels to consider the potential launch of a debt-based excessive deficit procedure (EDP) against the country.