From January 1999, when European Economic and Monetary Union (EMU) and hence the euro came into being the Eurosystem has, in effect, been the world's largest holder of gold. The Eurosystem consists of the European Central Bank (ECB) in Frankfurt and the national central banks of EMU member countries. 11 countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) were initially members of EMU while Greece joined in January 2001. The other three current members of the EU - Denmark, Sweden and the UK - are not, at least for the moment, members. EMU was established according to the terms of the 1992 Maastricht treaty.

All central banks in the Eurosystem hold gold although the amounts held vary both in absolute terms and as a proportion of gold and foreign exchange reserves. The initial balance sheet for the system implied a holding of 12,574 tonnes, or 404.3 million troy ounces, of gold (€99.6bn with gold valued at $287.45 per ounce). This amounted to 30.5% of total gold and foreign currency reserves. At end 2002 the Eurosystem held 12,411 tonnes. This compares with 8135 tonnes held by the world's largest single holder, the United States and is more than a third of total official holdings.

While the gold and foreign exchange reserves of the national central banks remain in their possession, all gold and foreign exchange reserves are, under the terms of the Maastricht treaty, at the disposal of the ECB. Transactions above a certain limit (unspecified but thought to be fairly small) are subject to approval by the ECB's governing council consisting of the governors of the member central banks plus the six members of the ECB's executive board. Guidelines covering any gold and foreign exchange transactions carried out by the former national central banks have been adopted but have not, however, been published.

The ECB publishes a weekly financial statement (available from its website) of the Eurosystem, which enables any changes in its gold and foreign exchange holdings to be tracked. Eurosystem gold is revalued each quarter at the last London fix price of the preceding quarter converted to euros. The new valuation is reported in the following weekly financial statement.

All the original members of the Eurosystem signed the first Central Bank Gold Agreement (also known as the Washington Agreement on Gold) in September 1999. Four Eurosystem members - Austria, Germany, Netherlands and Portugal - sold gold under its auspices.

For recent details refer to the Latest statistics on sales under the Central Bank Gold Agreement file from our research and statistics website.

See EU Changes in Gold Reserves, 1st January 1999 for the World Gold Council’s estimates of the changes to EU gold holdings at the end of 1989 and the start of 1999.