The European Central Bank has published the results of a study based on an exhaustive survey of 62,000 houseolds in 15 out of the 17 euro countries that shows that the median net worth of German households is only half that of Greek households, less than a third of Spanish households and less one fifth of Cypriot households. Much of the gap stems from the rate of home ownership in Germany, which is relatively low. In the other countries, real estate is the source of wealth.
The bank’s report has triggered an angry debate. German tax payers have had to guarantee more than $65 billion in European bailout money earmarked for Athens. Why don’t Greek (and other southern governments) tax their citizens’ real-estate wealth, Germans ask, instead of begging for bailouts?
The cover of the April 29 issue of Der Spiegel portrays a man, presumably a Greek, astride a donkey carrying baskets bursting with euros. The headline reads “The Poverty Lie – How Europe’s Crisis Countries are Concealing Their Wealth.”
No one disputes that the average income of Germans is higher than that of the bailout countries, but the average income of the former East Germans is still 20% lower than that of West Germans, and there is a great deal of poverty in many parts of Germany.
This debate will no doubt intensify as elections approach in the fall.
Source: Jack Ewing in The New York Times, April 16