The European Central Bank would have to approve the use of by euro zone members of their national foreign currency reserves to pay down debt, an ECB spokesman said today.
Earlier this week the Minister for Finance, Mr McCreevy, said he had not ruled out raiding the Central Bank's €6 billion foreign currency reserves in the forthcoming Budget.
Mr McCreevy attempted to access the reserves when drawing up last year's budget, but was thwarted by the interest of the European Central Bank (ECB) in deciding how the money should be treated.
An Italian parliamentary commission yesterday proposed an amendment to Italy's 2003 budget which would allow the use of some Bank of Italy reserves to help chip away at the country's debt mountain.
Slowing economic growth are pressuring Rome's budget deficit and the government has been exploring ways of keeping on the right side of budget rules laid out in the European Union's Stability and Growth Pact for prudent public finances.
The spokesman said that foreign exchange transactions by euro zone national central banks and the ECB, collectively known as the Eurosystem, are subject to approval by the ECB.
"Since it is a basic task of the Eurosystem to hold and manage official foreign reserves, such a disposal would have to be approved by the Governing Council of the ECB," he said.
Italy has some €24.5 billion in gold reserves and around €21 billion of forex reserves, compared with a national debt of €1.386 trillion at the end of July.
Earlier this year it was estimated that in the whole Eurosystem, foreign exchange and gold reserves totalled some €400 billion of which roughly €350 billion were still in the hands of the 12 euro zone national central banks.
Mr McCreevy declined to reveal this week whether he had initiated talks with the ECB on the use of the foreign reserves for this year's Budget.