Germany is facing mounting pressure from prominent economists and financial experts to repatriate its substantial gold reserves from United States vaults, driven by concerns over the shifting dynamics of transatlantic relations and the perceived unpredictability of former President Donald Trump. This debate marks a significant move from fringe political discourse into mainstream economic discussion, reflecting broader anxieties about strategic autonomy.
The Scale of German Gold Held in the United States
Germany possesses the world's second-largest national gold reserves, valued at nearly €450 billion in total. A significant portion of this wealth, approximately €164 billion or 1,236 tonnes, is currently stored within the vaults of the US Federal Reserve in New York. This represents about 37% of Germany's total gold holdings, with just over half kept at the Bundesbank in Frankfurt and the remaining 12% at the Bank of England in London.
Expert Calls for Strategic Repatriation
Emanuel Mönch, a leading economist and former head of research at the Bundesbank, has publicly advocated for the gold's return to German soil. In an interview with the financial newspaper Handelsblatt, Mönch emphasised the geopolitical risks associated with the current storage arrangement. "Given the current geopolitical situation, it seems risky to store so much gold in the US," he stated. "In the interest of greater strategic independence from the US, the Bundesbank would therefore be well advised to consider repatriating the gold."
This sentiment is echoed by Michael Jäger, head of both the European Taxpayers Association and the Association of German Taxpayers. Jäger pointed to Trump's unpredictable policy decisions, including past discussions about acquiring Greenland, as a primary concern. "Trump is unpredictable and he does everything to generate revenue. That's why our gold is no longer safe in the Fed's vaults," Jäger told the Rheinische Post. "The risk is increasing that the German Bundesbank will no longer be able to access its gold. Therefore, it should repatriate its reserves."
Political and Economic Dimensions of the Debate
Until recently, calls for gold repatriation were largely championed by the far-right Alternative für Deutschland (AfD) party for patriotic reasons. However, the issue has now gained traction across the political spectrum. Katharina Beck, finance spokesperson for the opposition Greens in the Bundestag, supports relocating the gold bars, describing them as an "important anchor of stability and trust" that must not become "pawns in geopolitical disputes."
Even within the ruling coalition, voices are emerging. Ulrike Neyer, a professor of economics at the University of Düsseldorf, told the Rheinische Post that "due to the Trump administration, the US is no longer a reliable partner." This reflects a growing unease among some Christian Democrats about the stability of the transatlantic partnership.
Counterarguments and Official Reassurances
Not all experts agree with the repatriation push. Clemens Fuest, president of the Institute for Economic Research (Ifo), warned that such a move could have unintended consequences and would "only pour oil on the fire of the current situation." Meanwhile, the German government's official position, as stated by coalition spokesperson Stefan Kornelius, is that withdrawal of the gold reserves is not currently under consideration.
Frauke Heiligenstadt, parliamentary group spokesperson on financial policy for the Social Democrats, sought to allay public fears. "Germany's gold reserves are well diversified," she noted, adding that having gold in New York made sense because "Germany, Europe and the US are closely linked in terms of financial policy." Bundesbank president Joachim Nagel previously assured International Monetary Fund attendees that there was "no cause for concern" regarding the German gold held in the US.
The Broader Context of Strategic Independence
This debate occurs against a backdrop of Europe's largest economy seeking greater strategic independence from the United States. The calls for gold repatriation symbolise deeper concerns about economic sovereignty and risk management in an era of "great power politics," as recently referenced by the German chancellor. While the Bundesbank maintains regular audits of its overseas gold supplies, the fundamental question of physical location versus financial partnership remains a potent issue for policymakers and economists alike.
As geopolitical tensions evolve and political landscapes shift, the discussion over Germany's gold reserves is likely to persist, balancing practical financial logistics against profound strategic considerations for the nation's future economic security.
