Should Romania bring its gold back from UK?

Should Romania bring its gold reserve back from UK? For some, it might seem like a out-of-the-question issue, but for Romania this is an important problem to be solved in the near future.

The issue of bringing back of the Romanian gold came out this year, along with a parliamentary initiative from a couple of MPs from the Governing party. The initiative says, quote, “Romania should bring back 91,5% of the gold deposited abroad”. Why 91,5 and not other figure, this is a not so important question, but the most important question is why this initiative appeared in the first place.

The initiators argued that some of the most developed European countries chose to bring back their gold, including Germany (from France and USA) and The Netherlands, but also Hungary (though Hungary has only 3 tons of gold in state deposits).

The funny thing is the country which started this fashion among the most developed states of the world is…Venezuela, who chose to repatriate its gold. Now there are allegations that part of this gold is stolen by its very political regime, but nothing has been proved yet.

In Romania there is a political and a social debate about this issue – should the gold be brought back to the country or not? On the one hand, the initiators of this law say “you don’t keep your jewelry with your neighbors, but in your own house”. On the other hand, the Opposition argue that Romania risks of losing international financial credibility by repatriating 91,5% of its gold, most of it from UK.

Now, the question remains – how should the Romanian Government proceed in this case? Maybe the best answer so far comes from the Governor of the Romanian National Bank, Mr. Mugur Isarescu, who said that the gold should be brought back, in order for everybody to see it exists, but after that it should be deposited back in UK. This solution will probably reconcile both camps. On the first hand, bringing the gold back to the country will cease speculations about its existence and will make the governing party not lose ground in this initiative. On the other hand, by depositing it back to UK or any other country, Romania will keep its financial credibility world wide and will make the Opposition content with this solution as well.

Only time will tell if Governor Isarescu was once again right on financial issues approaching strategies.