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Buba could consider selling gold-German lawmaker

Published 01/27/2009, 01:06 PM
Updated 01/27/2009, 01:09 PM
AUTN
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BERLIN, Jan 27 (Reuters) - Germany's Bundesbank central bank should consider selling its gold reserves to finance the government's stimulus measures, the budget spokesman for Chancellor Angela Merkel's Christian Democrats said on Tuesday.

Steffen Kampeter said the Bundesbank had been stocking up foreign currency and gold reserves for times of turmoil.

"(Now), everybody's talking about a big crisis," Kampeter said. "The Bundesbank has to consider, within its own autonomy, whether it will now use gold and currency reserves for refinancing or other areas."

Gold traded at $898.75 per ounce at 1615 GMT on Tuesday, having reached three-month highs on Monday.

The Bundesbank currently holds around 3,400 tons of gold, worth more than 70 billion euros ($92.43 billion) at current prices.

Germany, Europe's largest economy, holds around 11 percent of worldwide gold reserves.

Kampeter said the global financial crisis did not only require action by governments, but also by central banks. But he added that the Bundesbank had to be respected if it decided not to sell reserves.

Merkel's cabinet, including her conservatives and Social Democrats (SPD), on Tuesday agreed a 50 billion euro stimulus package and billions of euros in new borrowing to pay for it.

Several politicians in the ruling coalition have expressed concern that the package, which follows a first batch of stimulus measures the government says is worth 31 billion euros, will weigh on the budget and burden future generations.

Finance Minister Peer Steinbrueck, who has led a drive by Merkel's coalition to consolidate the German budget, said on Tuesday the time it took to pay off the new debts would depend partly on how much profit the Bundesbank made.

A spokesperson for the Bundesbank declined to comment on Kampeter's comments.

Under the terms of a five-year deal bewteen 15 European central banks, the Bundesbank has consistently passed on most of the quota it can sell each year to other institutions.

(Reporting by Andreas Moeser and Andreas Framke; Editing by Andy Bruce)

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