This is one of those trading ideas that float around that sounds plausible, but it's not. It's not possible for Greece to just go out and dump its gold supply.
First, selling gold to fund government borrowing is specifically prohibited by the Maastricht Treaty that created the European Union.
Second, Greece is a signatory to the Central Bank Gold Agreement (CBGA), which restricts how much gold can be sold at any one time by central banks.
Here's a list of the biggest central bank holders of gold, in metric tons (a metric ton is 2,204 pounds). Greece is the 32nd largest holder of gold, with about 111 tons.
Agreements aside, it's not a lot of money: at the current price of a little over $1,600 an ounce, 111 tons is about $6.4 billion. Not a lot for a country with $400 billion in sovereign debt.
Biggest central bank holders of gold, in metric tons:
1. U.S. 8,133
2. Germany 3,396
3. IMF 2,814
4. Italy 2,451
5. France 2,435
6. China 1,054
7. Switzerland 1,040
8. Russia 895
9. Japan 765
10. Netherlands 612
…32. Greece 111
Source: World Gold Council/IMF
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