Precious Metals Plunge As Poland Weighs Gold Sales To Fund Defense
Poland’s central bank chief laid out a proposal to generate as much as 48 billion zloty ($13 billion) from the sale of gold reserves to finance defense spending as part of a plan backed by the nation’s president, according to people familiar with the matter.
Bloomberg reports that Governor Adam Glapinski outlined the proposal in a meeting with President Karol Nawrocki on Wednesday as the head of state announced he’d seek an alternative to a European Union program that’s opposed by the US.
Nawrocki and his aides have criticized the EU’s €150 billion ($174 billion) loans-for-weapons project as a costly endeavor that would jeopardize ties with Washington.
Glapinski told the president that the National Bank of Poland could generate the profit by selling down some of its roughly 550 tons of gold reserves, which it could then buy back, the people said, on condition of anonymity as discussions take place behind closed doors.
But, as Bloomberg reports, the funding initiative would face legal and political hurdles in Warsaw.
The central bank is prohibited from funding the government — and Prime Minister Donald Tusk is firmly committed to tapping Warsaw’s €44 billion share of the Security Action for Europe program.