Italian gold and populist publicity

Italian Deputy Prime Minister Matteo Salvini
Deputy Prime Minister Salvini’s baffling proposal to finance Italy’s budget deficit through gold sales is more about his political ambitions than his country’s finances (source: dpa)
  • Matteo Salvini’s proposal to sell Italian gold to finance the deficit is unworkable
  • Pushing the idea does, however, further several of his political goals
  • Mr. Salvini is likely trying to take center stage in European politics

In early February, Matteo Salvini, Italy’s deputy prime minister and leader of the Lega party (formerly the Northern League), opened a debate on whether the country’s gold reserves could be used for fiscal policymaking. He floated the idea of selling the gold for euros to finance the budget deficit and cut – or slow down the rise in – public indebtedness.

As often happens in Italian politics, one has the impression that making headlines is more important than thinking twice: Mr. Salvini merely mentioned the need to avoid a rise in the value-added tax (VAT) to finance public expenditure and suggested that selling some of the country’s gold reserves could serve the purpose.

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