Does Slovakia also bring its gold home?

The Slovak Republic has stored 31.7 tons of gold at the Bank of England. The Social Democrats under former head of government Robert Fico want to take the gold home.

 

Gold abroad

A trend continues. After Poland and Hungary recently brought home large parts of the gold reserves stored abroad and Romania also wants its own gold, there is now also a corresponding initiative in Slovakia. According to its own figures, the country has placed 31.7 tonnes of gold with the Bank of England. That is the equivalent of 1,019,178.66 ounces. The current market value is 1.35 billion euros.

 

Political initiative

Robert Fico, the chairman and founder of the social democratic party Smer-SD and former prime minister of Slovakia, has presented a plan, according to the agency report (tasr), which is allegedly supported by 30 members of the Slovak parliament. It is to be presented to parliament. The plan asks the National Bank of Slovakia to prepare processes to bring gold back home. With this step, Fico wants to stabilise his country against a possible financial crisis and points in particular to the uncertainties caused by the Brexit. It is irrelevant that the Bank of England pays 0.2 to 0.4 percent interest.

 

Gold storage at the Bank of England

And what about the cost? According to the Bank of England (BoE), central banks pay 3.5 pence (currently 4.1 euro cents) per bar and day for the safekeeping of their gold. According to BoE calculations, 100 tonnes of gold is worth around 100,000 pounds per year (currently around 117,700 euros). According to official information, the Bank of England last held 162.52 million troy ounces of gold. This corresponds to 5,054 tons of the precious metal. However, the most recent reporting data (as at 28 November 2019) is from August 2019. Since the end of 2018, the BoE gold holdings have declined significantly.

 

Political power games

According to the media report, Fico stated that the Bank of England could no longer be trusted after the Munich Agreement of 1938. Slovakia is a member of the euro community. In the case of Romanians (no euro country, but a member of the European System of Central Banks), the most recent question raised was whether the approval of the European Central Bank was not required in the case of monetary gold (Romania’s gold reserves: does the ECB prevent the country from taking gold home?). In recent years, however, prominent euro members such as Germany, Austria and the Netherlands have relocated large parts of their gold reserves abroad to their home countries.