Germany to Sell Gold to Cut Deficit

German Finance Minister Hans Eichel has called on the German Central Bank to sell 120 tons of gold this year to plug the 2005 federal budget deficit, a media report said. The Bundesbank has “the right to sell 120 tons of gold, which would bring about €8 billion ($10.6 billion),” Eichel was quoted in the German Sunday newspaper Bild am Sonntag. “We should think about it. Gold does not earn interest, but the money obtained from its sale certainly does,” the minister said to critics that a sale would deplete the country’s reserves. Debate has been underway in Germany for the past several months about selling off part of the gold reserves in order to finance education and research projects. According to German law, the decision to sell off the gold rests with the Central Bank, but current legislation dictates that profits from the sale go to the federal budget. The Bundesbank said on Dec. 7 that a decision on any sale would be announced before the end of the year. After the US, Germany has the second largest gold reserves in the world – 3,400 tons. (AFP)