European bailout fund reported to want to grab Germany's gold Submitted by cpowell on Sun, 2011-11-06 16:32. Section: Daily Dispatches First they'd have to grab it back from the Americans.
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Bundesbank Says Central Bank Reserves Will Not Help Fund EFSF
By Harro ten Wolde Reuters Saturday, November 5, 2011
Germany on Saturday rejected media reports that Bundesbank reserves would be used to fund the euro zone's rescue facility after German newspapers said Group of 20 leaders had discussed the idea of tapping central banks.
The Frankfurter Allgemeine Sonntagszeitung reported that Bundesbank reserves -- including foreign currency and gold -- would be used to increase Germany's contribution to the crisis fund, the European Financial Stability Facility (EFSF) by more than 15 billion euros ($20 billion).
The European Central Bank (ECB) would own the reserves, according to the paper, citing sources at the G20 meeting held in Cannes this week.
The Welt am Sonntag newspaper, citing similar plans, said 15 billion euros would come from special drawing rights (SDR) that the Bundesbank holds. "Germany's gold and foreign exchange reserves, which the Bundesbank administers, were not at any point up for discussion at the G20 summit in Cannes," government spokesman Steffen Seibert said.
G20 leaders in Cannes discussed the idea that the European System of Central Banks could pawn their total foreign exchange reserves of 50-60 billion euros to a trust of the European crisis fund in the form of special drawing rights from the International Monetary Fund (IMF), the newspapers said.
"We know this plan and we reject it," a Bundesbank spokesman said.
Seibert said several partners had raised the question in Cannes whether SDRs could be used to strengthen the EFSF but Germany had rejected this plan and discussions at Monday's Eurogroup on Monday would not discuss this topic.
The newspapers had said the issue was taken off the agenda at the G20 following Bundesbank opposition but that it would be debated on Monday at a Eurogroup meeting of euro zone finance ministers.
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