Trichet, Bank of Italy & FreeGold – Update 2
Posted by Ivo Cerckel on August 8th, 2009
Update 1 added possibly related news
Update 2 adds the text of that news
At the Thursday 06 August 2009 European Central Bank press conference after the meeting of its governing council leaving interest rates unchanged at 1%, ECB president Jean-Claude Trichet said that Italy’s projected tax capital gain on the gold reserves of the Bank of Italy raises concerns as regards infringements of community law and that the ECB has a negative judgement of this piece of legislation.
I am waiting for the transcript of this question and answer to appear on
http://www.ecb.int/press/pressconf/2009/html/is090806.en.html
But in the meantime, I cannot but wonder what implications this has for FreeGold.
Is the following news item perhaps related?
Central banks to lower gold sales ceiling
By Javier Blas in London
Published: August 7 2009 12:10 | Last updated: August 7 2009 17:08
http://www.ft.com/cms/s/5f5fbefa-8338-11de-a24e-00144feabdc0,s01=1.html
SNIP
Gold bulls were given a psychological boost on Friday as European central banks announced a lower ceiling than expected for their bullion sales over the next five years, reducing their annual quota by 20 per cent to 400 tonnes. UNSNIP
European central banks will thus sell less gold than expected
Here’s the text
PRESS RELEASE
7 August 2009 – Joint Statement on Gold
http://www.ecb.int/press/pr/date/2009/html/pr090807.en.html
SNIP
In the interest of clarifying their intentions with respect to their gold holdings the undersigned institutions make the following statement:
1. Gold remains an important element of global monetary reserves.
2. The gold sales already decided and to be decided by the undersigned institutions will be achieved through a concerted programme of sales over a period of five years, starting on 27 September 2009, immediately after the end of the previous agreement. Annual sales will not exceed 400 tonnes and total sales over this period will not exceed 2,000 tonnes.
3. The signatories recognize the intention of the IMF to sell 403 tonnes of gold and noted that such sales can be accommodated within the above ceilings.
4. This agreement will be reviewed after five years. UNSNIP
Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/
BANK OF ITALY: TRICHET, CONCERNS ABOUT GOLD TAX
http://www.agi.it/business/news/200908061609-eco-ren0046-bank_of_italy_trichet_concerns_about_gold_tax
- Frankfurt, 6 Aug. – The measure taken by the Italian government to tax capital gain on the gold reserves of the Bank of Italy ”raises serious concerns”, said ECB president Jean Claude Trichet. The ECB, Trichet continued thinks that this law ”is very negative”. It raises ”serious concerns” on the possible encroachment of EU regulations. Regarding a possible appeal against the measure, Trichet said that the Italian government has promised to apply it only if the ECB and the Bank of Italy approve it. ”I don’t want to make predictions” he added. ”We’ll see what happens”
No related posts.
August 8th, 2009 at 11:32
AUGUST 6, 2009, 9:32 P.M. ET.
ECB Against Taxation Of Bank Of Italy’s Gold Reserves -Report
DOW JONES NEWSWIRES
http://online.wsj.com/article/BT-CO-20090806-727007.html
European Central Bank president Jean-Claude Trichet said Thursday the ECB is against Italy’s plan to tax its central bank’s gold reserves, reports La Repubblica in its Friday Internet edition.
The idea of taxing gold reserves of central banks is “totally negative,” he was quoted by the paper as saying. It “raises serious concerns.”
Last week, Italian senators approved a government decree aimed at stimulating the economy, which included a 6% tax on gold reserves of the Bank of Italy.
However, the government said the tax will be effective if the ECB and Italian central bank favor it.
Newspaper Web site: http://www.repubblica.it
-Dow Jones Newswires, enza.tedesco@dowjones.com
August 9th, 2009 at 07:14
Here’s the transcript
[I would spell “transscript” (trans-scriptum) with double s]:
Introductory statement with Q&A
Jean-Claude Trichet, President of the ECB,
Lucas Papademos, Vice President of the ECB
Frankfurt, 6 August 2009
Jump to the transcript of the questions and answers
Transcript of the questions asked and the answers given by Jean-Claude Trichet, President of the ECB, and Lucas Papademos, Vice-President of the ECB
http://www.ecb.int/press/pressconf/2009/html/is090806.en.html
SNIP
Question: There have been a lot of discussions about the possibility that the Italian Government will tax the non-realised profits of the gold reserves. You were against that twice in your Opinion. The law was passed with a clause that our Prime Minister guaranteed that the tax will be applied only if the ECB were to issue a favourable Opinion. So, my questions are: Is the law effective in your eyes, do you consider it a very dangerous precedent for Europe and for the European System of Central Banks and what are you going to do now?
Trichet: I confirm what you have said, that in view of the Governing Council this law’s provisions on the taxation of Banca d’Italia’s gold reserves raise very serious concerns as regards possible infringements of Community law. And, as you have mentioned yourself, we have a negative, an unambiguously negative opinion on this piece of legislation. This is the confirmation of what we have already published.
Question: You consider that it is not effective, then?
Trichet: Everybody has to draw appropriate conclusions, but our position is that we have a negative view of the proposed legislation. We judged it as negative.
Question: Are you going to appeal if the law is enforced?
Trichet: I am not going to embark into details. But, as you have said yourself, there is a commitment not to apply it if we consider it not to be appropriate. So, we will see what happens now. Again our views on this piece of legislation are unambiguously negative.
August 9th, 2009 at 07:34
Trichet does of course not imply that the Italian law taxing central banks’ gold reserves is not effective.
The joint statement on gold which was signed by inter alia the European Central Bank and the Banca d’Italia says that gold remains an important element of global monetary reserves.
Is Trichet calling for civil disobedience on the part of the Banca d’Italia?