Spain risks crisis over vanishing reserves

Spain's foreign reserves have plummeted to wafer-thin levels, leaving the country exposed to a possible banking crisis if the property market swings from boom to bust - despite membership of the eurozone.

Ambrose Evans-Pritchard

Spain Selling Gold

Over the past two months the Banco de España has sold off 80 tonnes of gold, flooding the world market with enough bullion to dampen the usual spring rally. The bank has reduced its holdings of US Treasuries, British gilts, and other investments at a similar rate.

Total reserves have now fallen by two thirds from €41.5bn in early 2002. Greece and Portugal have seen a similar drop.

Germans Won't Bow To Zionist's Pressure

The Bundesbank has an option to sell 600 of its 3,427 tonnes of gold over a five-year period that began in 2004.By contrast, the overall reserves of the eurozone system have remained stable. France (€76bn), Germany (€86bn), Italy (€59.5bn) have all kept holdings at full strength since the launch of the euro.