Europe’s rich tighten grip on wealth
Print Edition
THE concentration of wealth among the eurozone’s richest has increased since the bloc’s debt crisis began, with poor families suffering the biggest drop in asset values, a survey released by the European Central Bank showed on yesterday.
The eurozone’s top 5 percent of households owned 37.8 percent of net wealth in 2014, up from 37.2 percent in 2010 while the bottom 5 percent owned only debt, the ECB said, based on a survey of 84,000 households.
Hit by waves of recession, the bloc’s protracted debt problem has worsened inequalities as states on the periphery such as Italy, Spain, Portugal and Greece struggled, while those in the core, such as Germany, were quicker to recover.
The median wealth of a eurozone household dropped around 10 percent to 104,100 euros (US$108,800) in the four years to 2014, mostly as property prices fell, especially for the poorest fifth of the population, the ECB said.
“The shift was particularly substantial in Greece and Cyprus, where the median fell by roughly 40 percent ... but it is also large in Italy, Portugal and Spain, where it declined by more than 15 percent,” the ECB said.
Bucking the trend, median wealth in Germany, the bloc’s economic powerhouse, increased 10 percent over the same period. It also edged up in Austria, Finland and Luxembourg.
To reach the top 10 percent, households needed to hold net wealth of 496,000 euros or more, while the lowest 10 percent had 1,000 euros or less.
“The fall in net wealth was mainly driven by a reduction in the value of assets, in particular real estate,” the ECB said. “The decline in net wealth was higher for leveraged households, especially homeowners with a mortgage, compared with outright homeowners and renters.”
The property price fall hurt the poorest most. Real estate wealth was down a fifth for the poorest 40 percent, twice the drop for the top 20 percent.
Families in Luxembourg, where the financial sector dominates the economy, were the richest, with a median net wealth of 437,500 euros. In Latvia, it was just 14,200 euros.
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