Wealth distribution in the Eurozone: How the super-rich are getting richer

Wealth distribution in the Eurozone: How the super-rich are getting richer

According to a report by www.sueddeutsche.de, wealth is distributed very unevenly in the monetary union. The wealthiest ten percent of households own 56 percent of total net wealth, while the wealthier half of households only own five percent. The total assets in the monetary union now amount to around 60 trillion euros, which corresponds to an increase of 29 percent or 13.7 trillion euros over the past five years. During this period, inequality in wealth distribution has fallen minimally, mainly due to the performance of real estate.

The European Central Bank's long-term zero interest rate policy triggered a strong construction boom, from which only households that could afford a mortgage loan benefited. As a result, homeowners have seen their wealth increase by around 27 percent over the past five years, while renters have only seen an increase of 17 percent. The median net worth rose by around 40 percent to 150,000 euros.

Overall, the European Central Bank's study shows that the distribution of wealth in the euro zone is different. In Spain and Portugal, significantly more people own their own homes than in Germany and Austria, which means that the growth in wealth in these countries was higher. The Bundesbank added in its 2023 study that the wealthiest ten percent of households in Germany own 56 percent of the total net assets, while the wealthier half of households only own three percent.

This inequality in wealth distribution can have far-reaching effects on the market and the financial industry. For example, unequal distribution could lead to lower demand because households with lower wealth have fewer financial resources. This could impact consumption, investment and ultimately economic growth. Furthermore, it could also have political implications, as social inequality often leads to discontent and political instability. It is therefore important to take measures to reduce wealth inequality in the euro zone and strengthen economic and social cohesion.