Giorgia Meloni’s Brothers of Italy party is picking a fight with the country’s influential central bank over gold reserves, stepping up a conflict between the government and the country’s technocratic elite.

Last month, Lucio Malan, who is chief whip for the Brothers of Italy in the Senate and a close ally of Meloni, introduced an amendment to the 2026 budget that would assert the Italian state’s ownership of close to €290 billion worth of gold reserves held by the Bank of Italy. 

At first glance, it seems clear enough why this amendment came into being. Italy has a staggering amount of debt on its books, around 140 percent of the national gross domestic product, and is under strict EU orders to rein in its deficit, resulting in a perennial budget squeeze. 

So it might seem logical to raid the world’s third-largest reserve of gold to pay down Europe’s second-largest debt pile. The temptation to do so has been getting stronger by the day: The value of the Bank’s hoard has risen 60 percent over the past year, thanks to a global rally driven largely by other central banks’ buying.

But as usual in Italy, it’s not so simple. For one, the amendment doesn’t imply putting the gold to any specific use, but merely claims that the gold is property of the Italian people.

“Nothing is going to be transferred,” Malan himself told POLITICO over the weekend. “That gold has always belonged to the Italian people, and that’s going to stay the same.” He pushed back at “even the most distant hypothesis that even the smallest part of the gold reserves are going to be sold off.” 

Just as well. Three previous prime ministers — Romano Prodi, Silvio Berlusconi and Giuseppe Conte — have all had a sniff at similar schemes to bring the gold under more direct government control. But those schemes — the last of which was only six years ago — all foundered on the objections of the European Central Bank.

The ECB published a withering opinion on the legality of the proposal on Wednesday, bluntly reminding Rome that the EU Treaty gives the Eurosystem exclusive rights over holding and managing the foreign reserves of those countries that use the euro (and pointing out that it said exactly the same thing six years ago).

“This proposal has no chance of materializing,” said Lucio Pench, a professor specializing in economic governance and a fellow at the think tank Bruegel, pointing to the “clear conflict” with the EU treaty.

But if the amendment is essentially just gesture politics, the question arises — what exactly is its purpose?

A shot across the bow

Some see in it a warning shot at the Bank of Italy, arguing that Malan, as Meloni’s chief Senate whip, is unlikely to have acted without the premier’s consent (Malan himself didn’t comment on whether Meloni approved the amendment). In the corridors of the Bank itself, behind its neoclassical facade on Via Nazionale in the heart of Rome, the move prompted consternation at the highest levels. 

“I can tell you that people at the bank are furious,” fumed one official, adding that the proposal is illegal under EU law. “Our government — even if made up of thieves — cannot steal from the central bank, even if it writes it into a law.”

The Bank of Italy declined to comment on that point, but several Bank officials admitted privately that the move is consistent with a growing sense of antagonism from Meloni’s government. The Bank has always drawn the ire of the populist right, which blames it variously for the erosion of real wages over three decades and for the fall of the late Silvio Berlusconi. 

But such antagonism is also consistent with a broader trend across the Western world, where deeply indebted governments are leaning on their central banks, as fiscal needs become more pressing and as dissatisfaction with the technocratic management of the economy grows. U.S. President Donald Trump’s attacks on the Federal Reserve this year have been the clearest example of that but, as one ECB official told POLITICO, the “independence of central banks is not only the problem of the U.S. — there is some encroachment globally happening.”

There have been signs that the once close relations between Meloni the Bank’s governor Fabio Panetta — whom she brought home expressly from ECB headquarters in Frankfurt — have cooled. Indeed, Panetta was initially derided by some within the Bank for his apparent deference to the premier.

However, some officials believe that relationship was strained when the Bank’s head of research, Fabrizio Balassone, criticized a government budget draft last month, suggesting that tax cuts aimed at the middle classes were more beneficial to wealthy Italians than poor ones. Bank officials maintained the analysis was purely technical and apolitical — “It was, like, two plus two,” one said in defense of Balassone — but it caused a storm in the right-wing, Meloni-supporting press.  The Bank’s leadership worried that the government was not respecting the 132 year-old institution’s “traditions of independence,” said another.

Others see the amendment as being of a piece with a broader struggle against Italian officialdom: Francesco Galietti, a former Treasury official and the founder of political risk consultancy Policy Sonar, noted that in recent months, Meloni has pushed through a bill to rein in what she sees as a politicized judiciary, and also clashed with the head of state, President Sergio Mattarella, over an article that suggested he was plotting to prevent her from being reelected.

Malan himself insisted that the gold initiative was not directed “against anybody at all.” He nevertheless described the move as emblematic of the Brothers of Italy’s “battle” — without elaborating.

Broader play 

Toothless though the bill is now, it still represents an interesting test case for how robustly the EU is willing to defend its laws against national governments who, across the continent, are becoming more and more erratic as they struggle with the constraints of economic stagnation and demographic decline.

Earlier this year, the European Commission stood by while Meloni’s government strong-armed UniCredit, one of Italy’s largest banks, into abandoning a takeover that didn’t suit it. EU antitrust authorities only launched an infringement procedure after UniCredit dropped its bid in frustration.

Reports also suggest that pressure from Rome is set to scupper a planned merger between the asset management arm of Generali, Italy’s largest insurer, with a French rival, out of fear that the new company would be a less reliable buyer of Italian government debt.

If unchallenged, the latest initiative could soon become an existential challenge for the Bank of Italy, said a former official who maintains close connections to Bank leadership. “If you take the gold from the Bank of Italy, it no longer has any reason to exist,”he said.

And while Governor Panetta collaborated happily with Meloni at first, “there’s always a limit,” the official said. “When it comes to independence, that’s where it ends — this is only the beginning of a war.”

This article has been updated to include the ECB’s legal opinion.