German Economists Advocate for Gold Repatriation from US Vaults
Germany is facing mounting pressure to withdraw its substantial gold reserves from storage in the United States, driven by concerns over the shifting dynamics in transatlantic relations and the perceived unpredictability of former President Donald Trump. As the world's second-largest holder of national gold reserves after the US, Germany has approximately €164 billion worth, equivalent to 1,236 tonnes, stored in New York, sparking a heated debate among financial experts and policymakers.
Calls for Strategic Independence Amid Geopolitical Tensions
Emanuel Mönch, a prominent economist and former head of research at Germany's federal bank, the Bundesbank, has been vocal in advocating for the repatriation of these assets. In an interview with the financial newspaper Handelsblatt, Mönch emphasised that the current geopolitical climate makes it "risky" to keep such a significant portion of Germany's gold in the US. He argued that, to enhance strategic independence from the United States, the Bundesbank should seriously consider bringing the gold back to German soil.
This sentiment is echoed by Michael Jäger, head of the European Taxpayers Association and the Association of German Taxpayers. Jäger highlighted Trump's unpredictable nature and revenue-driven policies as reasons why German gold is no longer secure in the Federal Reserve's vaults. He pointed to the US's expressed interest in seizing Greenland as a provocative example, warning that such actions could jeopardise the Bundesbank's access to its reserves. Jäger has previously written to the Bundesbank and finance ministry, urging them to "bring our gold home" to mitigate these risks.
Mainstream Shift in the Gold Debate
Historically, the issue of gold repatriation was primarily championed by the far-right Alternative für Deutschland (AfD) party, which pushed for the return of gold on patriotic grounds. However, this topic has increasingly entered mainstream political discourse. Katharina Beck, finance spokesperson for the opposition Greens in the Bundestag, has supported relocating the gold bars, describing them as an "important anchor of stability and trust" that should not become entangled in geopolitical disputes.
Despite these calls, there is opposition within Germany's economic community. Clemens Fuest, president of the Institute for Economic Research (Ifo), cautioned against repatriation, suggesting it could exacerbate current tensions and "only pour oil on the fire of the current situation." Meanwhile, government officials have provided reassurances; Stefan Kornelius, spokesperson for Friedrich Merz's coalition government, stated that withdrawing gold reserves is not currently under consideration, and Bundesbank president Joachim Nagel previously assured at IMF meetings that there is "no cause for concern" over the gold held in the US.
Diversification and Financial Policy Considerations
Germany's total gold reserves are valued at nearly €450 billion, with just over half stored at the Bundesbank in Frankfurt am Main, 37% in the US Federal Reserve in New York, and 12% at the Bank of England in London. Frauke Heiligenstadt, parliamentary group spokesperson on financial policy for the Social Democrats, noted that this diversification ensures Germany's "ability to act is guaranteed." She added that keeping gold in New York aligns with the close financial policy links between Germany, Europe, and the US.
Nevertheless, as Trump's rhetoric towards Western partners intensifies, more voices within Merz's Christian Democrats are advocating for relocation. Ulrike Neyer, a professor of economics at the University of Düsseldorf, remarked that "due to the Trump administration, the US is no longer a reliable partner," reflecting growing unease. The Bundesbank continues to conduct regular audits of its gold supplies, but the debate underscores broader concerns about economic sovereignty and security in an era of geopolitical uncertainty.
