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Germans Say Greeks, Cypriots Hide Riches

1D1C46D506590E6CBF94AB05BCC8598ADer Spiegel’s front-page of April 15 had the provocative title, The poverty lie. How the countries in crisis cover up their riches, showing on its cover a man on a donkey carrying big sacks of money under an EU umbrella.

The article is based on a controversial ECB report which implies that German households are poorer that those of Greeks and Cypriots, though Germans are called upon to “save” the two countries.

Germans were very upset when they found out  they are among the poorest in the EU, so they took the chance to uncover the big “fraud” concerning the countries in crisis.

The ECB submitted questionnaires on the citizens’ wealth in 15 central banks of the Eurozone countries. The survey was conducted in 62,000 households and was based on data of the period 2007-2011. The findings show that Cyprus is the second wealthiest country in the Eurozone with the average citizens’ property reaching 266,900 euros.

Der Spiegel’s editors and reporters wonder “Do the countries that face crisis hide their wealth?” The article goes on saying “How can the euro be saved when the countries in debt are richer that the lender countries?”

According to the survey’s data for the period 2008-2010, the average net wealth of households in Luxemburg stood at 397,800 euros, in Cyprus at 266,900 euros and in Malta at 215,900 euros. For the same period in Germany it was 51,000 euros, in the Netherlands 103,600 euros and in Finland 85,500 euros. Citizens in Spain and Italy appear significantly richer, with 182,700 and 173,300 euros, respectively. In the version of April 15 Der Spiegel’s article stated that the average net wealth in a list of southern Eurozone countries was much higher than in Germany. But on April 17 this information was amended, as in two of those countries, Greece and Portugal, the figure is actually lower than that of Germany’s.

In her interview on April 19 to the German newspaper Bild, Chancellor Angela Merkel criticized the ECB report as distorted and explained: “Statistically, countries like Spain, Cyprus or Greece appear to be per household richer that the German households. But, pay attention! This statistic is distorted. In these countries the owners of houses and apartments are many more, because people in the South want like this to ensure their old age. In Germany, there is a strong legal and pension system. However, the Germans high pensions are not included in the statistics, nor does the estates Germans have abroad. That is why, the Germans wealth appears in the report lower than it really is”.

In his article to the Guardian on Wednesday 17 April entitled “Germans are right to be upset over the ‘poverty lie, but wrong about the target,” Costas Lapavitsas, professor of economics at the School of Oriental and African Studies, University of London, stated: “The German public is right to be annoyed at how things have turned out in the Eurozone. But it should seek the real culprit, which is the German policy of keeping wages low, suppressing domestic demand and increasing exports. That is the cause of income tightness, and even poverty, in Germany. If Germans want an effective answer, they should not seek to punish the imaginary rich of the south even further but instead aim for higher wages, boosting domestic demand and reducing the weight of exports. Now, that is a fight worth fighting”.

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