Is it the right time for debt ridden euro nations to go for gold as a solution of crisis or not? The issue is trending on high nodes among the leaders and policy makers of euro countries sighting to ease the market fears and support debt costs.

The world gold council representing a part of gold industry opines, “It is time for euro zone governments to start using gold in a creative manner, particularly in places such as Italy, to cut those interest rates.” At the moment, the euro zone government altogether holds around 10K tons of gold and considering present bullish gold market (believed to be favorable time to cash gold) the countries facing the crisis ought to liquidate some of their proportions, opine some of the council members.

Some diplomats believe as the debt crisis and quandary of the affected nations are too hefty, selling-off gold reserves will not be adequate and only “scratch the surface of the problems.” Also as the gold reserves or holding of the debt ridden nations (Portugal, Spain, Greece, Ireland and Italy) only stands to 3.3 percent of the combined outstanding debts of their central governments, the option of selling gold seems unjustifiable and impractical from one end.

Some economists suggests, instead of cashing the gold reserves, euro would be better-off by securitizing gold in the form of government bond backed by the ‘Yellow Metal’, which shall not only serve the motive of selling gold but also would provide assurance to the euro zone investors who have lost hope over euro zone government’s balance sheet.