(16 April 2013) - A recent ECB household-wealth survey was interpreted by the media as evidence that poor Germans should not have to pay for southern Europe. This is an inaccurate perception. An article published in the Social Europe Journal takes a look at the numbers.
Whilst it is true that median German households are poor compared to their southern European counterparts, Germany itself is wealthy. Importantly, this wealth is very unequally distributed, but the issue of unequal distribution does not feature much in the press. The debate in Germany creates an inaccurate perception among less wealthy Germans that transfers are unfair.
There does seem to be a problem of the distribution of wealth in Germany: first, wealth in Germany is highly concentrated in the upper part of the household-income distribution. Second, a large part of German wealth is not held by households and therefore must be held by the corporate sector or the government.
Thus while it may not be reasonable to ask the ‘poor’ median German household to transfer resources to southern European countries, it may be more reasonable to make such demands on the richer part of the German households and the corporate sector. (With the Social Europe Journal)