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Portugal should sell its gold reserves, says German MP

Portugal, the third eurozone country to ask for a financial bailout, should first sell its gold reserves, a German member of parliament suggested on Thursday.

“Before risking other people’s money Portugal should first sell its family jewels, especially its gold reserves,” Frank Schaeffler, a member of the pro-business FDP liberal party, told Bild newspaper.

Schaeffler last year made himself hugely unpopular with Greece when, at the height of its financial crisis, he suggested they sell off some of their numerous islands to help pay for an international bailout.

IMF chief Dominique Strauss-Kahn and EU Economy Commissioner Olli Rehn warned on Thursday that the Portuguese people would have to deliver “truly national” and “major” reform efforts in exchange for a 78-billion-euro ($116 billion) bailout which has just been agreed.

Portugal held gold reserves worth some 17.5 billion dollars last month, accounting for some 80 percent of its overall reserves, according to IMF figures.

The country is already seeing something of a gold rush, but only because the country’s debt-strapped population is selling off jewellery to pay monthly bills.

“The sector is witnessing a real boom,” according to Rui Pinhao, director of Valores, which catapulted to leader in the used gold market over the last two years with 150 franchises across the country.