Germnay wants its gold back
FRANKFURT — For the great many Germans who still rue the day they had to trade their deutsche marks for euros, there has been at least one consolation. If the common currency didn’t work out, Germany still had huge reserves of the hardest currency of all — gold.
Except, many people learned for the first time last year, it didn’t.
More than two-thirds of Germany’s gold reserves, valued at €137 billion, or $182 billion, is abroad, stored in vaults in Paris, London and above all New York. In fact, there is considerably more German gold in Manhattan than in Frankfurt.
On Wednesday, the German central bank said it would begin gradually repatriating some of the reserves, the second-largest stock in the world, after that of the United States. The Bundesbank was responding to a public outcry last year after a clash in Parliament about whether all the gold was properly accounted for.
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Germany didn't have very much gold even when it had more gold than it does today. The pre-euro mark wasn't a hard currency in the sense of being a gold-backed currency. Its hardness lay in German monetary policy. The little Belgian franc and Dutch guilder had more gold backing than the mark.
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