ECB: Greeks Lost 40% of their Wealth During Economic Crisis

Friday, December 23rd, 2016
Last Update: 21:12

Greeks lost 40% of their wealth in the years of the economic crisis, says a European Central Bank survey.

The concentration of wealth among the richest households in the euro zone countries has increased since the debt crisis, although wealth levels dropped horizontally due to lower real estate prices, the survey that was made public on Fridays says.

Five percent of euro area households, which are the economically strongest, held 37.8% of net wealth in 2014, compared to 37.2% in 2010. At the same time, 5% of the financially weak households only had debt.

The protracted euro zone debt problem has exacerbated inequalities as states such as Italy, Spain, Portugal and Greece faced serious difficulties, while the core countries of the euro zone, including Germany, have recovered faster.

The average wealth of households in the euro area decreased by about 10% to 104,100 euro in the four years up to 2014, mainly due to the reduction in property prices, especially for 5% of the population who were economically disadvantaged, ECB says.

“The change was particularly important in Greece and Cyprus, where on the average Greek household wealth decreased by approximately 40%. … In Italy, Portugal and Spain, dropped more than 15%,” the ECB report says.

In contrast, average wealth in Germany increased by 10% over the same period. Increase in wealth was also recorded in Austria, Finland and Luxembourg.

“The decline in net wealth was mainly the result of the decline in value of assets, particularly real estate,” the ECB survey said. “The reduction in net wealth is greater for households with loans, especially for owners who have mortgaged their homes, compared with owners without a mortgage and renters.”

Families in Luxembourg were the most economically robust, having an average wealth of 437,500 euros. In contrast, the average wealth of households in Latvia was only 14,200 euros.

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