Portugal holds 382.5 tons of gold, worth an estimated US$20.7 billion, one of the largest gold reserves in the European Union.
Managed by Banco de Portugal — the Portuguese central bank – the Portuguese gold reserves equal 9 percent of the country’s GDP, the highest of any European country.
Portugal’s gold reserves — the 13th highest gold reservse in the world — was built up from the time of former dictator António de Oliveira Salazar’s 40 year authoritarian rule.
Currently Portugal is under pressure from its European partners to sell its sovereign gold reserves, namely Germany who has demanded Thursday that Lisbon sell its gold.
“Before risking other people’s money, Portugal should first sell its family jewels, especially its gold reserves,” said Thursday German Member of Parliament Frank Schaffler.
Portugal has agreed Tuesday on a three-year, 78-billion-euro ($116 billion) bailout loan from the European Union and the IMF. Portugal needed to have the bailout package in place in order to repay about 5.0 billion euros (US$7.2 billion) in debt by June 15.
According to the latest projections from the International Monetary Fund (IMF) the Portuguese economy is expected to contract to about 1.5 percent in 2011 and 0.5 percent in 2012.
Acting Finance Minister Fernando Teixeira said Thursday that the current projections foresee a contraction of 2 percent in both 2011 and 2012.
The IMF also projected that unemployment in Portugal would reach 11.9 percent this year and 12.4 percent in 2012, as compared to 11 percent in 2010. The current unemployment rate in Portugal is 11.2 with an estimated 610,000 out of work.